There's apparently only room for one big motorcycle brand at Polaris Industries (NYSE: PII). The powersports vehicle maker announced it was winding down production of its Victory brand of big bikes, which have underperformed for the company and helped drag down its results.
Fortunately, Polaris also has the Indian Motorcycle brand that it bought out of bankruptcy in 2011 and resurrected to great success. Sales of those bike have accelerated Polaris into second place behind Harley-Davidson (NYSE: HOG) and allowed it to steal market share from the industry leader. Harley still owns half the U.S. market, but Polaris and Indian have made great strides anyway.
That does, however, make the laggard Victory marque somewhat superfluous. Although sales finally began to grow in recent periods, it's seen nothing compared to the double- and triple-digit percentage gains Indian has enjoyed. Moreover, with the entire motorcycle industry going through a period of contraction, it's just smart for Polaris to focus all of its energy on a single brand rather than dividing its efforts. It's also keeping its three-wheeled motorcycle Slingshot, and says it will continue to support the Victory brand with parts and service for a period of 10 years.
In a statement announcing the move, Polaris Chairman and CEO Scott Wine said, "Our focus is on profitable growth, and in an environment of finite resources, this move allows us to optimize and align our resources behind both our premium, high performing Indian Motorcycle brand and our innovative Slingshot brand, enhancing our focus on accelerating the success of those brands."
Polaris has suffered a series of debilitating product recalls over the past year or so. What started with recalls of its popular and industry-leading RZR side-by-side has expanded to include its Ranger ATVs, the Slingshot, and even its Indian bikes. Last week, it announced yet another recall, this one affecting its Sportsman 570 Touring and X2 all-terrain vehicles.
The powersports vehicle maker is scheduled to report fourth-quarter results later this month, and the recalls, as well as the end of Victory production, will likely take a toll on its operations once again.
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