Posts Tagged ‘Polaris’

MIC Promotes Use of Off-Road Vehicles in China

March 2, 2010

Participates In Italian-Chinese Trade Show Talks

When representatives of the Italian motorcycle industry announced last November that they intended to launch a major motorcycle show in  China, this year, it caught the attention of Tim Buche, head of the Motorcycle Industry Council (MIC), the U.S. association of motorcycle, ATV and scooter manufacturers.

“I suggested that there was good value in the MIC facilitating a dialogue on the evolving market for ATVs and similar products in China while I was at the EICMA show last November,” Buche told me last evening. Constantino Ruggiero, managing director of EICMA, agreed. And so the Americans began playing a significant role in putting together this year’s show in China.

EICMA is the huge annual motorcycle show held in Milano, Italy. EICMA is owned and operated by the Italian trade association of motorcycle and bicycle manufacturers and producers of aftermarket parts and accessories (ANCMA). It was founded in 1920 and has more than 170 members. For more information on ANCMA, click here.

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Don’t Look for Big Improvements in 2010

January 7, 2010

Personal, Business Bankruptcies Increase

Despite the Increasingly upbeat talk from Washington, I don’t see turnaround in 2010. And neither do a group of economists surveyed in January by the Wall Street Journal (WSJ) newspaper. The consensus: The U.S. economy will perform as poorly this decade as it did during the last one which marked the worst performance since the 1930s. The recovery seen by some in the last half of 2009 was driven in large part by government stimulus programs, which will be cut back this year. And as cautious Americans are saving more, they’re spending less on big ticket toys such as motorcycles.

“It’s easy to be dismal about the U.S. economy,” said one economist, whose outlook was seconded by another: “We’re not likely to have robust growth anytime soon.” The one bright spot cited by several economists was strength in places such as China and India, which could stimulate U.S. exports. Unfortunately, I don’t see that helping the U.S. powersports industry much, expect for OEMs like Harley-Davidson and Polaris, which have made moves in both those countries. BRP also could stand to benefit from growth outside the U.S. because of its strong international base.

The turbulence that began in the powersports industry in 2008 continued last year and will drag on through 2010, I believe. The same problems that existed last year— lack of sufficient consumer and business credit, weakened consumer confidence, a languishing housing market, lack of any meaningful new powersports products, excessive non-current inventory at the dealer level, and increased fumbling by the federal government— will continue in 2010, dampening any hope of a substantial recovery in our industry this year.

In a nutshell, I see more of the same lackluster performance for our industry in 2010 that we saw last year, and I don’t look for any real improvement in the problems that plague consumers and small businesses until 2011 or perhaps 4Q 2010, at best.

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Investors In Powersports Stocks Enjoyed 2009

December 31, 2009

Harley, Polaris, Arctic Cat Post Hefty Gains

Investors who placed bets on the powersports industry last year at this time— and held steady for the ride through the year— have reason to celebrate tonight. I checked the performance of three of the leading powersports stocks this year—Harley-Davidson (HOG), Polaris Industries (PII), and Arctic Cat (ACAT) and each of them outperformed the Dow Jones Industrial Average (DJIA) by a wide margin in two cases and matching it in the last one.

It wasn’t a smooth ride, however, and it took a firm hand to stay in the game through the sharp downtown in the first quarter.  For example, while the Dow lost 13% in value during the first two months of 2008, Polaris lost 25%, Harley  dropped 21%, and Arctic Cat slipped 20%.

For the year, though, the Dow climbed 1,772 points from 8,776 on Dec. 31, 2008, to 10,548 at the close yesterday. That’s a 20% jump. During the last 52 weeks, the Dow ranged from a low of 6,440 to a high of 10,605.

Polaris, the Minneapolis-based manufacturer of ATVs, UTVs, motorcycles, snowmobiles and electric vehicles, posted the biggest dollar gain during the last year of the three companies I looked at. Polaris common moved from $28.65 on Dec. 31, 2008, to $43 at the close yesterday. That’s a gain of $14.35, or 50.1% over the year. Its 52-week performance ranged from $14.53 to a high of $49.74.

If you would have purchased 1,000 shares of Polaris common stock one year ago, your investment would have gained $28,650, not considering quarterly dividends nor any sales commissions. Now, wouldn’t that provide a nice party tonight.

Securities analysts who follow the Polaris stock like the management team lead by new CEO Scott Wine, and Bennett Morgan, president and COO, and a long-time Polaris executive. When talking about Polaris, investors also talk about its ability to quickly bring new products to market, its efficient operations that emphasize cost controls, and its growing ability to control inventories at the dealer level through its Max Velocity Program (MVP) which allows dealers increased ordering flexibility.

Harley-Davidson gained $8.53, or 50.3%, climbing from $16.97 at the close on Dec. 31, 2008, to $25.50 at yesterday’s close. Harley investors had perhaps the toughest time waiting calmly for gains on the HOG stock as the company reworked its operations in several major steps.

One move with immediate and long-term implications was  the new contract it won with workers at its York, PA, plant that  permits the company to cut loose nearly half the 2,000 employee York work force and move ahead with major physical improvements in the plant. The plant modernization will be aided by a stimulus package from the state of Pennsylvania. Harley said at one point that it was considering relocating the operation to Kentucky.

In its second big reorganizational move, Harley dumped its MVAgusta operation and it closed its Buell sport bike business.

During the 2009 52-week period, Harley stock ranged from a low of $7.99 to a high of $30.00

Arctic Cat common stock is played at a much lower level than either Polaris or Harley, but it, too, posted a nice gain of 20% during the period Dec. 31,  2008, to Dec. 30, 2009. It climbed $4.16 for the year, moving from $4.79 in December 2008 to $8.95 yesterday.

Cat had a tough year, partly because of its dependence on snowmobiles and partly because of the loss of Gander Mountain, its high visibility outdoors retail chain based in Minneapolis. Gander had been carrying Arctic’s ATV and SXS lineup in its major stores. Arctic stock ranged from a low of $2.40 to a high of $9.27 during the last 52 weeks.

Okay, so now you’re probably waiting for my forecast on the performance of these stocks in 2010. Sorry, I don’t have one. After reporting on publicly traded stock for more than 40 years, I’ve come up with one basic rule: Stock market performance doesn’t always reflect corporate performance, especially when you try to tie it to a specific quarter or other reporting period. I don’t have a clue how these three stocks, or the Dow, for that matter, might perform over the next four quarters. And if I did know,  I wouldn’t give that information away; I would charge a lot of money for it. Isn’t that what investment advisors do?

Happy New Year and good luck with your investment decisions. I hope your powersports stocks perform well for you in 2010 as these three stocks did in 2009. JD

Contact me with news tips and story ideas at
976/893-6876 or joe@powersportsupdate.com

Research Shows Changing Dealer Networks

December 22, 2009

There’s been a lot of talk this year about changes in the number and types of franchised dealers operating in the United States and Canada, but there’s been precious little data to back up the talk. Until now.

I’ve been going over some very interesting research developed by Don Musick and his company, Genesys Technology Solutions (GenesysTech). The data collected by Musick shows that the major OEMs lost dealers last year while the non-traditional manufacturers — basically Chinese and Taiwanese and other non-MIC suppliers — picked up ground.

It’s like the frog dropped into a pot of water that gradually heats up to boiling, says Musick. The majors don’t recognize that the Chinese dealers are surrounding them with experienced retailers and are getting ready to eat their lunch.

Don Musick

I’ve traveled to China and seen the potential of Chinese factories, and I realize that most of them have a lot of problems as far as succeeding in this market, But, still, Musick makes a pretty strong statement, one that’s worth considering when we talk about the changing dealer network and what it might look like in 2010 and 2011.

Musick founded GenesysTech in 2004 and began collecting dealer information in powersports, auto and a number of other industries. There’s nothing magic about how Musick comes up with his numbers; it’s just a lot of hard work and computer analysis.

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Dealernewsblog Top 20 Viewed Stories of 2009

December 21, 2009

With 2009 quickly coming to a close, we’d be remiss if we didn’t tackle that trite-but-true end-of-the-year cliche known as the Top Whatever Stories List of (Fill in the year). Some of the time these stories are picked by readers, other times they’re chosen by editors/reporters. At Dealernewsblog we’ll opt for the former, based on the site visitor stats calculated by the good folks at WordPress.

We wish we had the energy and certitude to assemble a bevy of what we feel are the top powersports industry stories of 2009, but we’re kind of fat and lazy after snacking on too many holiday cheese logs, so we’ll leave this up to the cold analytics of the WordPress dashboard. For a more measured and thoughtful approach to the top stories, our own Joe Delmont is assembling a Top 10 list that should be appearing soon (link to come!).

And now, according to our blog stats, here are the Top 20 Dealernewsblog stories that viewers (like you!) clicked on in 2009:

  1. Harley’s Iron 883 – Nightster’s Younger Bro
  2. The Kymco Like — “Classic is one scooter …”
  3. Tragedy for Glen Helen Owner and His Family
  4. It’s Black Tuesday. Some Kid’s ATVs, Bikes Banned
  5. Harley Iron 883, You Are Soon to be Mine (for a while)
  6. Harley-Davidson Iron 883 Review
  7. KTM RC 125 GP Race Bikes for Sale
  8. Vendors That Compete Against Their Own Dealers
  9. 2009 Triumph Bonneville SE — Retro Riding
  10. Moto Guzzi V7 Classic – want one
  11. Top Dealer To Challenge CPSC Lead Content Rule
  12. Ducati Working on Adventure Tourer?
  13. High Fashion Gear for Women Riders? You Betcha
  14. H-D Iron 883 First Peek — On the Road to Review
  15. Dealer Expo Comments; Extra Product Coverage
  16. CPSC’s Recent Action Doesn’t Help Powersports
  17. Second Co-Founder Departs Baja Motorsports
  18. Small Stores Versus Big Stores
  19. New Polaris On-Road Division Raises Questions
  20. Roll Your Own Gear – Joe Rocket’s Hemp Jacket

Rider Impressions: The Victory Hammer S

July 15, 2009

In June I picked up a 2009 Victory Hammer S from Polaris headquarters in Medina, Minn. Now, after one month and nearly 1,000 miles, it’s time I return the bike.

As a fan of all things with two-wheels, I would’ve enjoyed keeping this head-turner in my garage alongside the SV1000S, Tomos Golden Bullet moped and forthcoming two-stroke Stella scooter. Having a muscle cruiser like the Hammer helped satisfy my different moods – whereas I enjoy long, quick-paced rides on the Suzuki, I equally enjoyed implementing the Victory for shorter, inter-city jaunts. If the SV1S, in triple black livery, is my B2 stealth bomber, the Hammer S, available only in a vibrant blue with white rally stripes, was my attention-grabbing Blue Angels C-130T Hercules “Fat Albert” – heavy, but powerful and impressively agile for its size.
VictoryHammerProfile2
The bike attracted attention and garnered questions wherever I went, whether at the filling station, neighborhood grocery store or local bike night. “Go ahead and park it right out front on the sidewalk,” the owner of my favorite restaurant, Eli’s in Minneapolis, said after grilling me on the bike’s specs and my impression of the ride.VictoryHammerOverdrive

“Nice Hammer!” a guy in a pickup truck shouted to me while we were stopped at a red light. “I just bought one! I love it!”

The Hammer S represented the fourth Victory extended ride the folks at Polaris have granted me. The first bike, the V92TC, was a bit unkempt; the first year Vegas was better, but still not tuned quite right (needed more breathing, found through the parts catalog); and the Vision I rode for a few months last summer was hugely impressive in handling and performance for its size.
VictoryHammerFrontBrake
What’d I like about the Hammer S? I had a list of highlights I quoted to everyone who asked: The 97hp, 113 ft. lbs. of torque offers a healthy dose of acceleration, the bike’s outfitted with a smooth running carbon fiber belt, the sixth gear “overdrive” transmits a fuel-saving engine speed of 2,400 rpm at 70mph, it maneuvers surprisingly well with the big 18-incher up front and 250/40R18 Dunlop rear, and braking was impressive (stainless steel lines, front dual 300mm floating rotors with 4-piston caliper and rear single 300mm floating rotor with 2-piston caliper).VictoryHammerBelt

The list of things I didn’t like is much shorter: To garner the hardtail look, engineers placed the rear shock a bit too far forward, directly under the seat. It’s preload adjustable, but nevertheless transmitted some kidney-jarring bumps when traversing roadway irregularities.
VictoryHammerGauges

Victory Lays Down the Hammer … S

June 15, 2009

I picked up a 2009 Victory Hammer S from Polaris HQ today, June 15. I’ve noticed this particular bike is about Victory performance, and that my sportbike has tire envy.

2009 Victory Hammer S

2009 Victory Hammer S

After rolling 200 miles during the first few hours after pick-up, I do have a few qualms about riding position (see future posts). Of course, I’m traditionally more of a sportbike rider, so anything I ride foot-first seems a bit odd.

Still, this is the best of the four Victory I’ve ridden for an extended period of time. It accelerates impressively (for (more…)

Ecowatercraft Hopes to Offer Electric PWC

June 4, 2009

EcoWatercraft is a company planning to be the first all electric personal watercraft manufacturer to go into production.
eco_logo
The company is the brainchild of founder Barrett Taylor. Taylor says, as a collegiate triathlete, he often swam amongst extremely heavy fumes expelled from the personal watercraft patrolling the swim site – something that coaxed him to look more closely at the health implications of breathing in toxic fumes and served as inspiration to assemble a team dedicated to bringing an electric personal watercraft to market.

Why electric? According to Taylor, the ECO emits no emissions, operates in complete silence, expands PWC use by being permitted on many lakes that restrict gasoline vehicles, benefits from acceleration inherent in electric vehicles, and offers convenience by requiring no fuels, oil or maintenance.

Sounds good, right? Many “green” blogs and websites appear to think so. However, there are a couple of statements that show a glaring lack of industry knowledge.

First, EcoWatercraft claims it “will be the first American personal watercraft corporation.” In fact, Minnesota-based powersports manufacturers Arctic Cat and Polaris were in the market years ago.

Second, Ecowatercraft says it “will provide the most customer oriented experience in the personal watercraft industry.” Dubious, since they’ll first have to gain the financial strength equal to or greater than companies like Kawasaki, Yamaha, BRP and Honda. Plus, they’ll likely be selling through the same dealers as those other OEMs.

Finally, Ecowatercraft, throughout its marketing literature, uses Kawasaki’s trademarked “JetSki” name in lieu of the general term of “personal watercraft.” A rookie mistake, for sure.

New Polaris On-Road Division Raises Questions

May 18, 2009

What New Products Will It Announce For This Division?
What Role Will Mark Blackwell Really Play?

Joe Delmont

Joe Delmont

The announcement today by Polaris Industries, Medina, Minn., that it is launching an “on-road vehicle division” is interesting from several perspectives.

Perhaps the most intriguing question the move raises is this: What new products will the innovative Minnesota OEM produce to fit into this segment alongside its popular Victory motorcycles? The move looks to bring the company one step closer to the “adjacent” industry that company executives have been talking about for several years.

Former Polaris CEO Tom Tiller often talked about the company’s planned move into “adjacent” industries— ones that could use Polaris’ existing technology and/or sell to its existing customer base.

Tiller’s replacement, Scott Wine, told analysts in April that,  “We remain on-track to announce a second adjacency later this year,” adding, “long-term, we’ve scaled back a little bit of our research and development in Victory and shifted some of those resources and funding to the front end of our business”

And Polaris President Bennett Morgan responded to an analyst’s question with: “We believe we’ve got some nice innovation coming in this adjacency that we are not talking about as well. So, we’ve got lots of good stuff….”

Indeed, Polaris did move outside the powersports industry recently when it signed a strategic alliance with Bobcat to jointly develop Bobcat branded products that will be introduced next year.

So, here’s what you might look for from Polaris to include in its new On-Road Vehicle Portfolio alongside Victory perhaps as soon as next month:

  1. An electric vehicle, probably a SXS model with two-wheel drive, that can be used in gated communities and other neighborhood developments. There’s been a lot of talk about electric vehicles, but so far nobody’s come up with a practical, efficient and economical machine. Perhaps Polaris, a company that prides itself on its innovation, can be the one to do so.
  2. A scooter, probably one in the 150cc size. We know that Polaris has been sourcing one in China for close to a year, so it wouldn’t be surprising to see them introduce one at the beginning of this scooter season.
  3. A sport bike to capture the strong youth market and its desire for speed and performance. This may be a bit of a stretch, but there are reasons to believe it could happen. First, speed and performance are features that Polaris offers on the snow side and in its radically hot RZR side-by-side vehicle. And a top Polaris executive who has been added to the on-road group, Mark Blackwell, has a record as a champion racer. Even though he’s guided the successful growth of Victory, Mark’s comfort level may be closer to the sport bike than to the cruiser. In its announcement, Polaris noted that Blackwell’s “deep knowledge of products and markets in the motorcycle industry will continue to be an invaluable asset to the Victory brand and all other on-road vehicles.” (My italics added.)

The one problem with each of these products, though, is this: Can Polaris teach its dealers to sell these products, ones that are radically different from the Victory and from Polaris’ off-road products?

Staffing Questions

As part of the new organization, Blackwell has been named vice president of motorcycles. Meanwhile, Mike Jonikas, vice president of sales and corporate marketing, has been named vice president of the On-Road Vehicle Division; he’ll be responsible for growing the division. In a related move, Steve Menneto has been named general manger of Victory Motorcycles.

The question here is: How much responsibility will Blackwell have? In the recent past, he’s worn several hats for Polaris, at one time running both the Victory and International operations simultaneously. Hmmm, perhaps the sport bike idea isn’t so far off after all.

We’ll find out soon how this all plays out. Guido Ebert, the senior editor at Dealernews magazine, has a meeting scheduled at Polaris this week. It will be very interesting to hear what he finds out. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com

Hot Off The Press At Dealernews.com

January 30, 2009

Honda’s worldwide sales of motorcycles and ATVs for the nine-month period ended Dec. 31, 2008, totaled 8.11 million units, up 16.7 percent from 6.95 million units during the same nine-month period in 2007. In North America – including the U.S., Canada and Mexico – the company wholesaled 248,000 units, down from 303,000 units. Motorcycles accounted for 143,000 units, down from 157,000 units; ATVs accounted for 105,000 units, down from 146,000 units.

Polaris CEO Scott Wine says 2009 will be a challenging year, and the OEM expects sales to decline 15 to 23 percent compared to 2008. “Retail sales trends for each of the industries and geographic markets in which Polaris competes are expected to remain soft for much, if not all, of 2009,” Wine says. “As a result, we will be more conservative with our production and shipment expectations for 2009.”

Arctic Cat says the OEM is focused on multiple efforts to rescale its business in the current economic climate. Actions include streamlining production operations from three production lines to two; a planned company-wide shutdown; the elimination of approximately 100 positions, or 7 percent of its 1,400 employees; the elimination of the dealer incentive trip; suspending regular quarterly cash dividends; a salary reduction of 5 percent for all officers; selective compensation and benefit adjustments; reduced vacation accrual; a hiring freeze; and lowering operating expenses by 10 to 15 percent through greater efficiencies in lean manufacturing and global low-cost sourcing.

KTM believes the economic environment for the automotive and motorcycle industry in particular could continue to worsen in the United States and Europe, and the company is responding to the scenario by scaling back production by up to 20 percent from last year and continuing to implement ongoing improvements and cost-cutting measures.

Japan’s four major motorcycle manufacturers produced 1.22 million units in 2008, down 26.8 percent from 1.68 million units produced in 2007. Honda, Kawasaki, Suzuki and Yamaha together shipped 372,362 units to the United States in 2008, down 18.2 percent from 455,139 units shipped in 2007.

Visit Dealernews.com to read more about these and other powersports-related topics.