Tags: Polaris | PII | motorcycles | India

Polaris Aims to Expand in India

By    |   Wednesday, 28 Sep 2011 04:05 PM

Leading off-road and all-terrain vehicle maker Polaris Industries (PII) has created a solid foundation that has seen huge growth even during the slow economy. Now it’s investing in its future by focusing on India.

One may think four-wheelers as a leisure market, one that has slumped significantly as consumers reduce the amount of their discretionary spending. Yet sales have grown with the focus on ranchers, foresters, and conservation agencies, as well as recent awards to the U.S. military and its allies.

In fact, that new focus has paid off so much that sales have grown by between a third and a half every quarter during the past four quarters. The stock went supernova with a 2-1 split in mid-September after it paid out 45 cents per share in August.

With the present looking decidedly solid, the plan for the future rests on India. And with Indians. But those are separate things.

In April, PII decided to bookend its position in the motorcycle industry by adding the 110-year-old U.S. motorcycle brand Indian to its offering. It already competes against Harley Davidson (HOG) with its own modern, slick Victory bike, which allows market newcomers to get in the saddle for just $12,500.

Committed

But the Indian bike has history and style. It has that certain something that has made it elite but suffered slipping sales. Polaris has big plans to polish up Indian and make it what it once was, if not just a little better.

"Polaris didn't buy Indian as a short-term thing. We're committed to the brand. And it's going to be a part of our family for a long time. We wouldn't have bought the company if we didn't think there was a substantial opportunity with the Indian brand," Robert Pandya, external relations manager for Polaris Motorcycles, told the Sioux City Journal.

Halfway across the planet, Polaris is taking on a new market: India itself. In late August the company launched in New Delhi, where it plans to sell target off-road applications such as mining, in forests, in deserts, and on beaches. It will start with 70 vehicles.

At 116 percent duty for importing the vehicles, the company plans on starting off with imports but will soon either begin manufacturing itself or teaming up with a local company under a manufacturing contract.

Seventy vehicles is a drop in the bucket for the $1.9 billion turnover company, but with expectations of up to $400 million in sales in India in the next five years the plan is for steady growth.

RW Baird recently improved its rating on PII to outperform from neutral. The company reports third quarter earnings Oct. 18.

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Leading off-road and all-terrain vehicle maker Polaris Industries (PII) has created a solid foundation that has seen huge growth even during the slow economy. Now it s investing in its future by focusing on India. One may think four-wheelers as a leisure market, one that...
Polaris,PII,motorcycles,India
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2011-05-28
Wednesday, 28 Sep 2011 04:05 PM
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