Polaris 2010 Annual Report Download - page 18

Snowmobiles. We produce a full line of snowmobiles, consisting of 26 models, ranging from youth models to
utility and economy models to performance and competition models. The 2011 model year suggested United States
retail prices range from approximately $2,500 to $12,000. Polaris snowmobiles are sold principally in the
United States, Canada and Europe. We believe our snowmobiles have a long-standing reputation for quality,
dependability and performance. We believe that we were the first to develop several features for wide commercial
use in snowmobiles, including independent front suspension, long travel rear suspension, hydraulic disc brakes,
liquid cooling for brakes and a three cylinder engine. In 2001, we introduced a new, more environmentally-friendly
snowmobile featuring a four-stroke engine designed specifically for snowmobiles. In 2009, we introduced the first
true progressive-rate rear suspension snowmobile, the Polaris RUSH».
On-road Vehicles. In 1998, we began manufacturing V-twin cruiser motorcycles under the Victory brand
name. In 2008, we introduced our first luxury touring models, the Victory Vision». In 2009, we expanded our
touring product line to include the Victory Cross Roads»and Cross Country»models. Our 2011 model year line of
motorcycles consists of 12 models with suggested U.S. retail prices ranging from approximately $12,500 to
$28,000. In 2009, we introduced our first electric neighborhood vehicle, the Polaris Breeze. We have three
2011 LEV models with a suggested United States retail price of approximately $8,000.
Parts, Garments and Accessories. We produce or supply a variety of replacement parts and accessories for
our ORVs, snowmobiles, motorcycles and LEVs. ORV accessories include winches, bumper/brushguards, plows,
racks, mowers, tires, pull-behinds, cabs, cargo box accessories, tracks and oil. Snowmobile accessories include
covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil and lubricants. Motorcycle
accessories include saddle bags, handlebars, backrests, exhaust, windshields, seats, oil and various chrome
accessories. We also market a full line of recreational apparel, including helmets, jackets, bibs and pants, leathers
and hats for our snowmobile, ORV and motorcycle lines. The apparel is designed to our specifications, purchased
from independent vendors and sold by us through our dealers and distributors, and online through our e-commerce
subsidiary under the Polaris brand name.
Discontinued Operations — Marine Products Division. We entered the personal watercraft market in 1992.
In September, 2004, we announced that we had decided to cease manufacturing marine products effective
immediately. As technology and the distribution channel evolved, the Marine Products Division’s lack of
commonality with other Polaris product lines created challenges for us and our dealer base. The Marine Products
Division continued to experience escalating costs and increasing competitive pressures and was never profitable.
See Note 11 of Notes to Consolidated Financial Statements for a discussion of the discontinuation of The Marine
Products Division.
Manufacturing and Distribution Operations
Our products are assembled at our original manufacturing facility in Roseau, Minnesota and at our facilities in
Spirit Lake, Iowa and Osceola, Wisconsin. Since snowmobiles, ORVs and motorcycles incorporate similar
technology, substantially the same equipment and personnel are employed in their production. We are vertically
integrated in several key components of our manufacturing process, including plastic injection molding, stamping,
welding, clutch assembly and balancing, painting, cutting and sewing, and the manufacture of foam seats. Fuel
tanks, tracks, tires and instruments, and certain other component parts are purchased from third-party vendors. Raw
materials or standard parts are readily available from multiple sources for the components manufactured by us. Our
work force is familiar with the use, operation and maintenance of the products since many employees own
snowmobiles, ORVs and motorcycles. In 1991, we acquired a manufacturing facility in Osceola, Wisconsin to
manufacture component parts previously produced by third-party suppliers. In 1994, we acquired a manufacturing
facility in Spirit Lake, Iowa in order to expand our assembly capacity. Certain operations, including engine
assembly and the bending of frame tubes, seat manufacturing, drivetrain and exhaust assembly and stamping, have
been conducted at the Osceola, Wisconsin facility. In 1998, Victory motorcycle production began at our Spirit Lake,
Iowa facility. The production process in Spirit Lake includes welding, finish painting, and final assembly. In 2002,
we completed an expansion and renovation of our Roseau manufacturing facility, which resulted in increased
capacity and enhanced production flexibility. In 2010, we announced plans to realign our manufacturing operations.
We are creating manufacturing centers of excellence for Polaris products by enhancing the existing Roseau and
Spirit Lake production facilities and establishing a new manufacturing facility in Monterrey, Mexico, which is
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