Polaris 2015 Annual Report Download - page 32

where ORV orders are placed in approximately two-week intervals for the high volume dealers driven by retail
sales trends at the individual dealership. Smaller dealers utilize a similar MVP process, but on a less frequent
ordering cycle. Effective in 2010, the MVP process was being utilized by all North American ORV dealers.
For MVP dealers, ORV retail sales activity at the dealer level drives orders which are incorporated into each
product’s production scheduling. International distributor ORV orders are taken throughout the year. Orders
for each year’s production of snowmobiles are placed by the dealers and distributors in the spring.
Non-refundable deposits made by consumers to dealers in the spring for pre-ordered snowmobiles assist in
production planning. In 2012, we began utilizing our Retail Flow Management (RFM) ordering system for
Victory motorcycles, and now also use it as the ordering system for Indian motorcycles. In late 2014, we began
utilizing RFM for most ATV dealers. The RFM system allows dealers to order daily, create a segment
stocking order, and eventually reduce order fulfillment times to what we expect will be less than 18 days. For
non-MVP and non-RFM dealers and products, units are built to order each year, subject to fluctuations in
market conditions and supplier lead times. We anticipate that we will begin to evolve our side-by-side business
to utilize RFM in late 2016 and 2017.
For snowmobiles, we offer a pre-order SnowCheck program for our customers. This program allows our
customers to order a true factory-customized snowmobile by selecting various options, including chassis, track,
suspension, colors and accessories. Manufacture of snowmobiles commences in late winter of the previous
season and continues through late autumn or early winter of the current season. We manufacture ORVs,
motorcycles and Global Adjacent Markets vehicles year round. 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 1,800 independent dealers in North America, and
approximately 1,700 independent international dealers through 23 subsidiaries and approximately
75 distributors in over 100 countries outside of North America. With the exception of France, the United
Kingdom, Sweden, Norway, Australia, New Zealand, Germany, Spain, China, India, Mexico and Brazil, sales
of our non-Global Adjacent Markets vehicles in Europe and other offshore markets are handled through
independent distributors.
ORV/Snowmobiles. We sell our ORVs directly to a network of over 1,500 dealers. Many of our ORV dealers
and distributors are also authorized snowmobile dealers, and are located in the snowbelt regions of the United
States and Canada. At the end of 2015, approximately 860 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. In 2012 through 2015, we acquired Klim, Kolpin, Pro Armor, Timbersled,
Hammerhead and 509, which each have their own dealer/distributor relationships established.
Motorcycles. Victory and Indian motorcycles and Slingshot are distributed directly through independently
owned dealers and distributors, except in Australia where we have four Company-owned retail stores. We have
a high quality dealer network for our other product lines from which many of the approximately 450 current
North American Victory dealers were selected. Indian currently has approximately 225 North American
dealers signed up, of which approximately 180 are retailing Indian motorcycles as of the end of 2015. We
expect the number of Indian retailing dealerships to continue to increase over the coming years. Slingshot
currently has approximately 450 North American dealers retailing as of the end of 2015. In 2005, we began
selling Victory motorcycles in the United Kingdom. Since 2005, we have been gradually expanding our
international sales of motorcycles, primarily in Europe and Australia. We expect to further expand our
motorcycle dealer network over the next few years in North America and internationally for Victory, Indian
and Slingshot motorcycles.
Global Adjacent Markets. Within Global Adjacent Markets, our Work and Transportation vehicles each have
their own distribution networks through which their respective vehicles are distributed. In 2011 through 2013,
we acquired GEM, Goupil and Aixam in the Global Adjacent Markets operating segment. GEM has
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