Polaris 2010 Annual Report Download - page 17

Originally conceived as a utility vehicle for northern, rural environments, over time the snowmobile gained
popularity as a recreational vehicle. From the mid-1950’s through the late 1960’s, over 100 producers entered the
snowmobile market and snowmobile sales reached a peak of approximately 495,000 units in 1971. The Polaris
product survived the industry decline in which snowmobile sales fell to a low point of approximately 87,000 units in
1983 and the number of snowmobile manufacturers serving the North American market declined to four: Yamaha,
BRP, Arctic Cat and Polaris. These four manufacturers also sell snowmobiles in certain overseas markets where the
climate is conducive to snowmobile riding. We estimate that during the season ended March 31, 2010, industry sales
of snowmobiles on a worldwide basis were approximately 113,000 units, down 23 percent from the previous season.
On-Road Vehicles. Polaris’ on-road vehicles consist of Victory»motorcycles and low emission vehicles
(“LEV”). Heavyweight motorcycles are utilized as a mode of transportation as well as for recreational purposes.
There are four segments: cruisers, touring, sport bikes and standard motorcycles. We entered the motorcycle market
in 1998 with an initial entry product in the cruiser segment. United States industry retail cruiser sales more than
doubled from 1996 to 2006, however the motorcycle industry declined in 2007 through 2010 due to weak overall
economic conditions. We entered the touring segment in 2000. We estimate that the 1,400cc and above cruiser and
touring market segments combined declined 11 percent in 2010 compared to 2009 levels with approximately
163,000 heavyweight cruiser and touring motorcycles sold in the North American market. Other major cruiser and
touring motorcycle manufacturers include BMW of North America, LLC (“BMW”) Harley Davidson, Inc., Honda,
Yamaha, Kawasaki and Suzuki.
We introduced our initial LEV product, the Polaris Breeze», in 2009, which is an electric powered vehicle
primarily used in master planned communities in the sunbelt United States. We estimate the target market for LEVs
at approximately $1.6 billion in 2010, which includes master planned communities and golf courses, light duty
people transport and urban/suburban commuting. Other major LEV manufacturers include Textron Inc.’s
“E-Z-Go”, Ingersoll-Rand Plc’s “Club Car”, Yamaha and JH Global Services, Inc. (“Starcar”).
Products
Off-Road Vehicles. We entered the off-road vehicle market in 1985 with an ATV. We currently produce four-
wheel ATVs, which provide more stability for the rider than earlier three-wheel versions. In 2000, we introduced
our first youth ATV models. In 1998, we introduced the Polaris RANGER, an off-road side-by-side utility vehicle
and in 2000, we introduced a six-wheeled version of the RANGER utility vehicle. In 2004, we introduced a military
version ATV and side-by-side vehicles with features specifically designed for ultra-light tactical military appli-
cations. In 2007, we introduced our first recreational side-by-side vehicle, the RANGER RZR», and our first six-
passenger side-by-side vehicle, the RANGER Crew». Our standard line of military and government vehicles for
2011 consists of 16 models at suggested United States retail prices ranging from approximately $7,500 to $22,500.
Our full line of ORVs beyond military vehicles consists of 32 models, including two-, four- and six-wheel drive
general purpose, sport and side-by-side models, with 2011 model year suggested United States retail prices ranging
from approximately $2,000 to $17,000.
Most of our ORVs feature the totally automatic Polaris variable transmission, which requires no manual
shifting, and several have a MacPherson strut front suspension, which enhances control and stability. Our “on
demand” all-wheel drive provides industry leading traction performance and ride quality due to its patented on
demand, easy shift on-the-fly design. Our ORVs have four-cycle engines and both shaft and concentric chain drive.
In 1999, we introduced our first manual transmission ATV models. In 2003, we introduced the industry’s first
electronic fuel injected ATV, the Sportsman»700 EFI. In 2005, we introduced the industry’s first independent rear
suspension on a sport ATV named the Outlaw». In 2007, we introduced the RANGER RZR, a big bore recreational
side-by-side model. In 2008, we celebrated the one millionth unit sale of our Sportsman ATV family, which has
been the industry leading big bore ATV for 13 years, by introducing the 100 percent redesigned Sportsman XP. In
2008, we also introduced an extension of our recreational side-by-side vehicle with the introduction of the RANGER
RZR S». In 2009, we introduced our first all-electric side-by-side vehicle, the RANGER EV. In 2010, we introduced
our first four-seat recreational side-by-side, the RANGER RZR 4», Robby Gordon Edition, a mid-sized RANGER
side-by-side with increased power, a four-person mid-sized RANGER Crew»and a RANGER powered by our first
24 horsepower diesel engine. In addition, shipments to Bobcat Company (“Bobcat”) of the differentiated utility
vehicle produced by us for Bobcat, began shipping in 2010.
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