Polaris 2010 Annual Report Download - page 20

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We have the ability to mix production of the various products on the existing manufacturing lines as demand
dictates.
Sales and Marketing
Our products are sold through a network of approximately 1600 independent dealers in North America,
through 11 subsidiaries and 43 distributors in approximately 130 countries outside of North America.
We sell our snowmobiles directly to dealers in the snowbelt regions of the United States and Canada. Many
dealers and distributors of our snowmobiles also distribute our ORVs. At the end of 2010, approximately 700 Polaris
dealers were located in areas of the United States where snowmobiles are not regularly sold. Unlike our primary
competitors, which market their ORV products principally through their affiliated motorcycle dealers, we also sell
our ORVs through lawn and garden and farm implement dealers.
With the exception of France, the United Kingdom, Sweden, Norway, Australia, New Zealand, Germany,
Spain, China and Brazil, sales of our products in Europe and other offshore markets are handled through
independent distributors. In 1999, we acquired certain assets of our distributor in Australia and New Zealand
and now distribute our products to the dealer network in those countries through a wholly-owned subsidiary. During
2000, we acquired our distributor in France and now distribute our products to our dealer network in France through
a wholly-owned subsidiary. In 2002, we acquired certain assets of our distributors in the United Kingdom, Sweden
and Norway and now distribute our products to our dealer networks in the United Kingdom, Sweden and Norway
through wholly-owned subsidiaries. During 2007, we established a wholly-owned subsidiary in Germany and now
distribute our products directly to our dealer network in Germany. In 2008, we established a wholly-owned
subsidiary in Spain and now distribute our products directly to our dealer network in Spain. In 2010, we established
wholly-owned subsidiaries in China and Brazil and will distribute our products directly to the dealer network in
those countries. See Notes 1 and 12 of Notes to Consolidated Financial Statements for a discussion of international
operations.
Victory motorcycles are distributed directly through authorized Victory dealers. We have a high quality dealer
network for our other product lines from which many of the approximately 350 current North American Victory
dealers were selected. In 2005, we began selling Victory motorcycles in the United Kingdom. Since 2005 we have
been gradually expanding our international sales of Victory motorcycles, primarily in Europe. We expect to further
expand our Victory dealer network over the next few years in North America and internationally. The Polaris Breeze
electric vehicles are distributed through authorized LEVand golf vehicle dealers. At December 31, 2010, we had 37
dealers authorized to sell our Breeze product.
Dealers and distributors sell Polaris’ products under contractual arrangements pursuant to which the dealer or
distributor is authorized to market specified products and is required to carry certain replacement parts and perform
certain warranty and other services. Changes in dealers and distributors take place from time to time. We believe a
sufficient number of qualified dealers and distributors exist in all geographic areas to permit an orderly transition
whenever necessary. In addition, we sell military and other Polaris vehicles directly to military and government
agencies and other national accounts and we supply a highly differentiated side-by-side vehicle branded Bobcat, to
their dealerships in North America.
In 1996, a wholly-owned subsidiary of Polaris entered into a partnership agreement with a subsidiary of
Transamerica Distribution Finance (“TDF”) to form Polaris Acceptance. Polaris Acceptance provides floor plan
financing to our dealers in the United States. Under the partnership agreement, we have a 50 percent equity interest
in Polaris Acceptance. We do not guarantee the outstanding indebtedness of Polaris Acceptance. In 2004, TDF was
merged with a subsidiary of General Electric Company (“GE”) and, as a result of that merger, TDF’s name was
changed to GE Commercial Distribution Finance Corporation (“GECDF”). No significant change in the Polaris
Acceptance relationship resulted from the change of ownership from TDF. In November 2006, Polaris Acceptance
sold a majority of its receivable portfolio to a securitization facility arranged by General Electric Capital
Corporation, a GECDF affiliate (“Securitization Facility”), and the partnership agreement was amended to provide
that Polaris Acceptance would continue to sell portions of its receivable portfolio to the Securitization Facility from
time to time on an ongoing basis. See Notes 3 and 6 of Notes to Consolidated Financial Statements for a discussion
of this financial services arrangement.
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