Polaris 2005 Annual Report Download - page 14

POLARIS INDUSTRIES INC.10
TRUE GRIT: TAKING ON AN AMERICAN
MOTORCYCLE ICON Victory’s success is
due, in large part, to Polaris employees’
can-do attitude, said Matt Parks, who led
the original Victory development team.
“People who didn’t know our company
or our culture looked at all the obstacles
we had to overcome and said we’d never
make it,” he recounted.
“After all, we had to hire a team
from scratch, the company had never built a 4-stroke engine or done an all-metric
vehicle before, and we had to deal with a lot more regulatory issues because this was
our first on-road vehicle,” he said. “But we know we can take on any challenge as
long as we rely on our strengths: understand where the market opportunities are, know
the customer and build products our way. That’s exactly what we did with Victory.”
Setting the foundation with snowmobiles.
Today, our flagship snowmobile business
makes up less than one-sixth of our total
sales, yet we have remained a leader in the
industry. We will continue to innovate and
improve our sled business, even as we
develop others.
Taking a lead in an already-established
ATV market. We entered the ATV business
in 1985 as an underdog. The market was
already well established and under scrutiny
because of safety concerns with traditional
three-wheelers. Our entry ATV was a more
stable four-wheeler and the industry’s
first-ever automatic transmission. Through
continuous product innovations, we quickly
moved into a leadership role and in 2005
celebrated production of our 2 millionth ATV.
Recognizing when to exit personal watercraft.
In 2004, Polaris exited the personal
watercraft business for several reasons: The
market had been in decline for several years,
it represented only 3 percent of total
company sales and the marine division had
few commonalities with other Polaris product
lines, which made it more expensive to
operate. By moving marine resources to
opportunities with greater potential, we are
building an even stronger company.
By anticipating future trends in powersports, we’ve strategically added new product lines and let go
of less successful ones –– while strengthening our existing strong businesses.
PLAN TODAY FOR
Proving ourselves in motorcycles. In the
fourth quarter 2005, Victory Motorcycles
had its first profitable quarter, following four
years of strong revenue growth. Today, we
have the fastest-growing motorcycle brand
in the United States, with a resale value
better than Japanese brands and closing in
on Harley-Davidson. The victory is especially
sweet, given that several start-up American
motorcycle companies have come and gone
in the past few years. In addition to packaging
new American styling in top-performing
bikes, we also:
Chose the most lucrative motorcycle segments.
Cruisers and touring bikes represent two of
the top growing U.S. on-highway segments.
The growth is being fueled largely by baby
boomers looking for a more comfortable and
relaxing way out.
Assembled a strong team and instituted a
disciplined development process.
The Victory
management team has more than 100 years
of combined experience fueled by personal
passion. The development process the team
put in place was so advantageous — from a
cost, time and quality standpoint — that we
instituted it across all our vehicle lines
several years ago.
Improved the sales process with two
industry firsts.
One is a test drive program.
More than 70,000 people have test driven a
Victory since the program launched in 2002.
The other innovation is a custom order
program that allows buyers to choose custom
options up front via the Internet versus doing it
themselves after purchase. They save money
and are assured of factory-direct quality.
Today, motorcycles represent about 5 percent
of Polaris sales. Within four to five years, they
could represent close to 25 percent of sales,
due largely to our new partnership with KTM,
which is featured on the following pages.
PHOTOS FROM LEFT TO RIGHT:
•The FST SwitchBack is one of several models
with a new, lower-emission 4-stroke engine.
•The new Sportsman X2’s fold-up rear passenger
seat makes it a more versatile ATV.