Polaris 2015 Annual Report Download - page 35

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three cylinder engine in snowmobiles, the adaptation of the MacPherson↧ strut front suspension, ‘‘on
demand’’ all-wheel drive systems and the Concentric Drive System for use in ORVs, the application of a
forced air cooled variable power transmission system in ORVs and the use of electronic fuel injection for
ORVs.
We utilize internal combustion engine testing facilities to design and optimize engine configurations for our
products. We utilize specialized facilities for matching engine, exhaust system and clutch performance
parameters in our products to achieve desired fuel consumption, power output, noise level and other
objectives. Our engineering department is equipped to make small quantities of new product prototypes for
testing and for the planning of manufacturing procedures. In addition, we maintain numerous facilities where
each of the products is extensively tested under actual use conditions. We utilize our Wyoming, Minnesota
facility for engineering, design and development personnel for our line of engines and powertrains, ORVs,
Victory, Indian and Slingshot motorcycles, and certain Global Adjacent Market vehicles. In 2010, we acquired
Swissauto Powersports Ltd., an engineering company that develops high performance and high efficiency
engines and innovative vehicles.
We expended $166.4 million, $148.5 million and $139.2 million for research and development activities in
2015, 2014 and 2013, respectively.
Intellectual Property
We rely on a combination of patents, trademarks, copyrights, trade secrets, and nondisclosure and
non-competition agreements to establish and protect our intellectual property and proprietary technology. We
have filed and obtained numerous patents in the United States and abroad, and regularly file patent
applications worldwide in our continuing effort to establish and protect our proprietary technology.
Additionally, we have numerous registered trademarks, trade names and logos in the United States, Canada
and international locations.
Competition
The off-road vehicle, snowmobile, motorcycle and people mobility and work utility solutions markets in the
United States, Canada and other global markets are highly competitive. Competition in such markets is based
upon a number of factors, including price, quality, reliability, styling, product features and warranties. At the
dealer level, competition is based on a number of factors, including sales and marketing support programs
(such as financing and cooperative advertising). Certain of our competitors are more diversified and have
financial and marketing resources that are substantially greater than those of Polaris.
We believe that our products are competitively priced and our sales and marketing support programs for
dealers are comparable to those provided by our competitors. Our products compete with many other
recreational products for the discretionary spending of consumers, and to a lesser extent, with other vehicles
designed for utility applications.
Product Safety and Regulation
Safety regulation. The federal government and individual states have promulgated or are considering
promulgating laws and regulations relating to the use and safety of certain of our products. The federal
government is currently the primary regulator of product safety. The Consumer Product Safety Commission
(CPSC) has federal oversight over product safety issues related to snowmobiles and off-road vehicles. The
National Highway Transportation Safety Administration (NHTSA) has federal oversight over product safety
issues related to motorcycles and people mobility vehicles.
In August 2008, the Consumer Product Safety Improvement Act (‘‘Act’’) was passed which, among other
things, required ATV manufacturers and distributors to comply with previously voluntary American National
Standards Institute (ANSI) safety standards developed by the Specialty Vehicle Institute of America (SVIA).
We believe that our products comply with the ANSI/SVIA standards, and we have had an action plan on file
11