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POLARIS RECOVERS SOME GROUND

The most telling item in mixed half-yearly results for US powersports manufacturer Polaris Industries was news that retail sales of its Indian motorcycle brand had increased by 17% in the second quarter, reports BDN financial editor Roger Willis.

This improvement stands in stark contrast to the poor performance of principal cruiser market competitor Harley-Davidson, which suffered a 6.7% unit sales decline in the same three-month period. Harley’s insistence that generic consumption shrinkage is due to baby-boomers dying out while younger people are less seduced by the American biker lifestyle therefore doesn’t entirely stack up.  

Quick to gloat, Polaris chairman and chief executive Scott Wine commented: “In a weak motorcycle industry, Indian continues to demonstrate how a complementary combination of exciting new bikes, strong dealer execution and overall brand momentum can prevail.”

In the first half of 2017, total Polaris revenue rose by 19.2% to £1.942bn, thanks to a quadbike and side-by-side ATV sales resurgence. However, operating costs climbed by 35.5% to £394.9m in the aftermath of repeated ATV recalls and ongoing expenses from scrapping the Victory motorcycle brand. So operating profit fell by 38.1% to £92.7m. Net profit was 49.9% down at £45.6m.

Despite Indian’s burgeoning success, the impact of Victory disposal weighed heavily on motorcycle segment figures. Sales of Slingshot trikes were also restricted by further recall issues. Second-quarter revenue from bikes plus associated parts and accessories dropped by 13.3% to £152.7m. That figure included just £4.8m from sales of left-over Victory stock, against a Victory contribution of £41.6m in the equivalent quarter last year. There was also a separate Victory wind-down charge of £6.9m taken into account.

 

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