Victory Motorcycle Wheels Fall Off At Polaris

 

END OF THE ROAD FOR VICTORY MOTORCYCLES…An American Motorcycle Company Dies Before Its Time…

Big News! Polaris Industries announces the end of Victory Motorcycles…Got to admit, I did not see this news coming on Monday, January 9, 2017.

 

I will always remember where I was when I received the official media Press Release via email from Skyya Communications, Polaris’s PR pros. That warm sunny SoCal morning quickly turned cold as I read the announcement…Say what??? Big market cap Polaris Industries, an almost $6.0 billion corporation, could no longer afford to support the Victory Motorcycle brand? Wow, I said to myself as I boarded on a jet plane for a business trip to the east coast. Where’s the “American Muscle” in that newswire?

 

My history with Victory

As a long time friend and supporter of Victory motorcycles, the announcement both surprised and saddened me. What a shame I pondered as I looked out the airplane window…what the hell happened I wondered? How could such a supposedly powerful big enterprise like Polaris Industries give up on a true American brand after only 18 years in the marketplace?

 

My 2014 Victory High-Ball…best bar-hoppin’ fun bike ever. Click image to read my original blog post on this cool ride.

 

The making of an American motorcycle brand

In order to make sense of why Polaris Industries Chairman and CEO, Scott Wine, President of Motorcycles, Steve Menneto, and the Polaris Board of Directors decided to drop the Victory brand, one must get some perspective and context around what could lead to such a big, brand-killing, strategically-relevant, and future corporate brand positioning decision.

Remember back almost two decades to 1998, Victory was the motorcycle that was going to be the biker’s alternative to market leader, Harley-Davidson.

Victory’s first motorcycle, the V92C, was lauded as the new exciting American-made motorcycle that riders could fall in love with. The press loved it! Polaris championed it. And so began the building of a loyal fan base of Victory owners.

Market excitement for the new motorcycle company jumped exponentially when Arlen Ness Motorcycles of Dublin, CA signed on as a Victory dealership in 1999. The legendary Arlen Ness and his son, Cory, added huge credibility and brand relevancy to America’s new motorcycle company. They also signed on as styling consultants and as accessories supplier to Victory and in 2004, the Nesses created a cool series of sleek looking limited-edition Ness Signature Victory models. A third generation Ness, Zach, even got into the act joining the company after college and championed his own Zach Ness Signature Vegas model in 2011. The Ness family collaboration with the Victory team looked like a match made in motorcycle heaven from all I could see.

 

2008 was a big year with the introduction of the Freedom 106 V-twin.

I first learned about the new Freedom 106 motor during the summer of 2008 when the Victory Vision demo rides arrived at Ness Motorcycles. Victory added this industry-leading powerplant to the Hammers and Vegas models a year later.

By 2013, every Victory model sported the Freedom 106ci V-Twin motor. I loved the power, the acceleration and the look of this engine and, I loved the fact that its 1,731cc became viewed by Harley-Davidson as a serious contender with all its power and torque.

 

106 cubic inches of Modern American Muscle. Click motor image for a series of excellent YouTube videos on this engine. Image Source: Victory Press

 

In 2015, I was fortunate to hook up with then External Relations Manager for Polaris Motorcycles, Robert Pandya. Robert put me in the saddle of a new Victory Magnum for a major roadtest across half the country that would lead me to the 75th Anniversary of Sturgis…and, what an amazing ride it was from San Diego, California to Sturgis, South Dakota.

I made it a point to visit over 10 Polaris/Victory dealers along the way so that I could get a feel for the excitement around the new Victory bikes and to admire the inventory on their showroom floors. The bike ran smooth and cool. It handled really well even as I rode half the trip through heavy rain, thunder and lightning. I will never forget that ride.

 

On my way to Sturgis75. Devils Tower, Wyoming. 2015 Victory Magnum. Click image to read my blog post on this great ride.

 

The world of big money and big company decisions.

Polaris Industries (NYSE: PII) is a giant powersports company. The company had a market cap of $5.8 billion at November 2016. For perspective and comparison, competitor Harley-Davidson (NYSE: HOG) has a market cap of $10.6 billion. Other competitors of note are Thor Industries (NYSE: THO) which had a market cap of $4.3 billion and Brunswick Industries (NYSE: BC) also around $4.3 billion in 2016.

In 2015, the recreational vehicles segment accounted for a whopping 78.6% of total company sales according to information available from Polaris Investor Relations. Motorcycles generated only 14.8% of total sales. Looking at motorcycle sales over the past several years, you’ll want to note the following:

2012 = $195,789,000 or 6.1% of total company sales of $3.2 billion came from motorcycles

2015 = $698,257,000 or 14.8% of total sales of $4.7 billion originated from motorcycles. Estimates are that the Victory brand accounted for $114 million or only 20.2% of all motorcycle sales at Polaris in 2015.

 

Looking back, one can summize that the arrival of the iconic Indian motorcycle brand at Polaris in 2011 was the beginning of the end for Victory motorcycles.

 

According to published financial reports and insiders in my network, sales and profits from the motorcycle segment increased over the past several years primarily due to aggressive marketing, dealership promotion and company leadership enthusiasm for Indian Motorcycles and Polaris’s new 3-wheeled moto-roadster, the Slingshot.

The Victory brand…Well, retail sales were down a whopping 15% in the fourth quarter of 2015 due to “continued low product availability” and since the arrival of the Indian Motorcycle brand in 2011, there was a real loss of enthusiasm within company leadership to aggressively market and sell the Victory brand, according to my sources. Combine this with the fact that the Victory brand lost money in three of the past five years, according to published reports, and you have a formula for failure.

Media reporting around the industry indicated that Victory Motorcycles accounted for only 3% of the company’s total sales in 2015. ($141 million or viewed another way, Victory accounted for 20.2% of Polaris’s total motorcycle sales in 2015.) 

 

Imagine if Polaris had applied the same marketing strategy and distribution excitement towards selling the Victory story during the first 10 years of the brand’s existence…as it has during the past four years on the promotion of Indian and the Slingshot brands?

 

This is where I believe the company lost its way with Victory…in the marketing, sales and distribution of the Victory brand going all the way back to 2008 when the company introduced its new motor, the Freedom 106.

From cruiser to tourer, every Victory model was outfitted with the powerhouse, industry-leading Freedom 106ci motor in 2013. The brand was ripe for great marketing and a new distribution strategy to accelerate its sales from all I could tell at the time. I got so excited myself that I bought a new Victory High-Ball in early 2014 just for fun.

 

My 2014 Victory High-Ball…total head turner. Full of fun torque.

 

By the end of 2014, reports show that Indian had an estimated 140 dealers in the U.S. and 70 dealers internationally. Globally, Polaris had over 600 Victory Dealers…think about this for a moment. Over 600 established Victory Dealers supposedly selling the Victory brand but sales lagged and did not meet expectations?

While attractive Indian-branded dealerships sprouted up across the U.S. and internationally from 2013 and continues to this day, Victory bikes were lucky to get front door positioning in Polaris’s powersports focused dealerships. Some new Indian dealers also sold Victory bikes but the bikes got mostly back of the showroom floor status from all I saw visiting numerous dealerships across the country. For some reason, the impressive marketing and selling blitz focused on the Indian and Slingshot brands was nowhere to be seen for Victory. I began to wonder back in 2013 why Polaris had decided to not to fully champion the brand.

 

The key leadership player – Steve Menneto, President of Victory and Indian Motorcycle brands.

 

If you believe that Polaris had the financial means, engineering prowess and talented executives like Steve Menneto running the motorcycle segment, you got to wonder about the real reasons why the Victory brand got de-prioritized over the past several years?

Steven D. Menneto, has been the President of Motorcycles at Polaris Industries Inc. and around the Victory Motorcycle brand in numerous leadership capacities since 2009 according to his LinkedIn profile.

According to Bloomberg, he gained valuable experience in various other key roles at Polaris; Director of Dealer & Retail Development, Director of Consumer Sales, Regional Sales and he even dabbled in a Dealer Development Quality intitiative.  He also gained significant hands on dealership experience during his three-year tenure managing a powersports dealership. Fellow blogger extra-ordinaire, Cyril Huze, interviewed Steve Menneto back in March 2014. Steve’s commitment to Victory at the time seemed positive and even optimistic. Click here to read the full interview on Cyril Huze Blog.

So, given all of Steve Menneto’s leadership experience with the Victory brand, why was the Victory brand not promoted as an individual, viable, strong motorcycle brand like the Indian brand? Why was Victory allowed to get lost and relegated to the rear of many of Polaris dealer’s showroom floors?

Back in a 2012 interview with About Bikes Magazine, Steve Menneto had a strategy and a plan for growing the Victory brand profitably. What happen to the execution of that plan?

I am hoping to interview Steve Menneto in the near future about the reasons behind the killing of the Victory brand. We Victory fans want to know so I will report to you all when Steve and I connect.

 

Take note blog fans: Polaris will release its fourth quarter and full-year 2016 financial results and provide 2017 guidance on Tuesday, January 24, 2017.

 

My expectation is that the topic of the Victory brand kill (official announcement here) and its impact on the Polaris brand as a viable motorcycle manufacturer long term will be a hot topic for the Polaris executives in attendance.

Webcast and conference call will be held at 9:00 a.m. Central Time to discuss results. A slide presentation and link to the webcast will be posted on the Polaris Investor Relations website at  ir.polaris.com.  To listen to the conference call by phone, dial 877-706-7543 in the U.S. and Canada, or 478-219-0273 Internationally.  The Conference ID is #45015597. This is one corporate conference communication you don’t want to miss if you care about the future of American made motorcycles.

 

My bottom line…

I love motorcycles but I really love the American brands of Harley-Davidson, Indian and Victory. I’ve owned all three brands, among others, at one time or another over the past 45 years.

The bottom line is that Polaris Industries is a powersports powerhouse with a powersports-trained distribution system (dealerships).  Motorcycles and other hybrid on-road vehicles make up less than 20% of their total revenues. The Victory Motorcycle brand, in my opinion, got lost in dealership showroom clutter and when pinned against lower priced foreign motorcycle brands, it never had a chance.

Why Polaris leaders did not market the Victory brand separately as it is doing so effectively today with the Indian Motorcycle brand we may never know?

I do believe that the Indian brand will benefit from having its step-child Victory model out of its corporate way as long as it continues to be marketed with its own branded, Indian products and services story. For how long, who knows given the demographics buying Indian motorcycles? Me, I own a 2014 Indian Chieftain today with 40,000 miles on it and I love it. Great bagger I do admit.

 

On the road to Monument Valley, Utah with my 2014 Indian Chieftain.

 

As for the 3-wheeler, quasi-roadster, registered as a “motorcycle” Slingshot, it too is being promoted through existing Polaris dealership showrooms and parking lots…tucked away amongst the 4×4 ATVs. Some are even getting good front door placements. All the best to Polaris’s marketing pros as they continue to position this innovative vehicle in the marketplace. Click on this Slingshot link to read my original roadtest blog post.

My bottom line…Victory Motorcycles were well-engineered, sleek good lookers and even attractively priced but they simply could not compete hidden amongst the powersports Side x Side 4-wheelers, ATVs, lower priced foreign motorcycle brands and walls and walls of motocross boots, helmets, duffel bags…etc. Add to this that Victory inspired logo wear and accessories were limited until only a few years ago and the brand was clearly handicapped from a marketing point of view.

Furthermore, except for my many positive visits to the Ness Dealership in NorCal over the years, I never did feel dealer passion for Victory Motorcycles from any of the dozens of Polaris dealers I have visited over the years.

 

Customized cool, right out of the factory. 21-inch front wheel. That’s the Victory Magnum model. Click image for more info.

 

Talk about a missed opportunity for Polaris to fully develop an excellent motorcycle brand in Victory and to prove to Harley-Davidson that they will be a tough competitor for decades to come. Talk about bad news for us motorcycle riders from a price and product standpoint…Less competition, higher prices.

RIP Victory Motorcycles…you will be missed by this motorcycle enthusiast.

 

Me and the Magnum – 2015.

 

 

 

 

 

 

 

 

 

 

 

About Motorcycle Marc – I’m a motoblogger. Some say a key motorcycle industry influencer. I prefer to ride motorcycles but when I can’t ride, I blog about it. Since 2009, I’ve developed a strong loyal following of thousands of gearheads, motorheads, biker-wannabes and 2-wheeled adventurers who love motorcycles and everything motorcycle-related. Welcome to my world. #RideSafeOutThere – Marc J. Beaulieu (MJB)

About Polaris Industries Inc. (NYSE: PII). Polaris Industries is a global powersports leader with annual 2015 sales of $4.7 billion. Polaris fuels the passion of riders, workers and outdoor enthusiasts with some of the world’s leading recreational vehicle brands; RANGER®, RZR® and POLARIS GENERAL side-by-side off-road vehicles; the SPORTSMAN® and POLARIS ACE® all-terrain off-road vehicles; INDIAN MOTORCYCLE® midsize and heavyweight motorcycles; SLINGSHOT® moto-roadsters; and Polaris RMK®, INDY®, SWITCHBACK® and RUSH® snowmobiles.  Go to www.polaris.com for more information.

About Arlen Ness Enterprises – Arlen Ness Motorcycles is the motorcycle dealership associated with Arlen Ness Enterprises. They have one of the best reputations anywhere for personal customer service and standing by their wide variety of products. The dealership will continue to service your Victory bikes so there’s no need to worry about that. As you can imagine, given the elimination of the Victory brand by Polaris, all Victory brands at Arlen Ness Motorcycles are on clearance with limited inventory available. Once they are gone off the showroom floor that’s it. Best to get to the dealership asap!

Note: Copyrights and Trademarks are the property of their owners. No infringement ever intended. Some of the material for this blog was gathered from numerous articles and websites available in the public domain. Manufacturer Names, Logos, Photos/Images, Websites and Model Information are Registered Trademarks of their Manufacturer/Owners. Also, note that specifications and any information in this blog is subject to change without notice. No representation of accuracy is made.

16 comments

  1. Gary S. says:

    Hi Marc. the original Victory motorcycle back in the late 1990s was butt ugly, cumbersome to handle and just not cool. I tested one and almost crash that unbalanced horse. Then the suits at Polaris got some religion and created the Vegas around 2004. I bought one and got excited about the brand. Then, the suits must of smoked too much weed as they came up with the Jetson-styled Vision bagger a few years later. That was too much for me but I did not sell my Vegas. Then, by 2013, they appeared on a roll with some super cool models like the 8-Ball, the Hammer, the High-Ball, Cross-Country and that Magnum! How cool was that Magnum?

    Unfortunately, Polaris had bought Indian by then and all development focus and marketing focus seem to turn towards Indian and away from Victory. Yes, I believe Indian Motorcycles, with its history of brand killing experience, killed the Victory motorcycle instead of itself this time. I give Indian 10 years or so and it too will be killed by, you guessed it, Harley-Davidson. That’s my story and I’m sticking to it. Ride sunny side up buddy. What bike you riding to Sturgis this year?

  2. Anthony C. says:

    The Motor Company, Harley-Davidson of Milwaukee, Wisconsin, wins again. Why? Focused on motorcycles. Not distracted from doing what they do. Focused on riders and rider experiences. Leaders are passionate about motorcycles, Period. Now, Harleys are too expensive so we need competition and an alternative. That’s where Victory contributed. Indians are also too expensive so we should expect a big marketing and sales push for the cruiser lines out of Yamaha, Honda, Suzuki, Kawasaki, and others…BTW, I read your blog all the time.

  3. VictoryManLou says:

    Hey Brother…thanks for this very good info. You laid it out man. I feel bad man for us bikers losing this motorcycle company. I rode Harleys for 20 years and switched to Victory four years ago. Great motorcycle I tell you. Polaris must be doing really bad. Still can’t believe they killed the whole f’n line. Why did they do that? Looks like desperation move. Yes No?

  4. Norma D. says:

    You nailed it right here Marc.

    “My bottom line … Victory Motorcycles were well-engineered, sleek good lookers and even attractively priced but they simply could not compete hidden amongst the powersports Side x Side 4-wheelers, ATVs, lower priced foreign motorcycle brands and walls and walls of motocross boots, helmets, duffel bags…etc.” – Their marketing and sales strategy, plan and implementation was destined to kill the brand. A real shame to see another American motorcycle brand go down the ditch just because the powers to be at Polaris did not know what they were doing. I feel bad for the Victory company employees. This should never of been allowed to happen. A real big shame.

  5. Harry P. says:

    Very imformative article. I got to admit man, I sure was shocked at the news out of the Polaris CEO. I own two Victory bikes…a Hammer and a Cross Country. Love them both! Sure didn’t realize that Polaris was in such financial difficulties. Too bad for sure. I plan to run my two Victory bikes till they die. The wife won’t let me buy any more bikes. That’s OK, I’m gonna be 60 next week.

  6. Billy J. says:

    Hey Motorcycle Marc…thanks a f’ing lot man. I bought a brand new Magnum after reading your article on your trip to Sturgis with that cool red bike. Now I got a bike who’s company is broke and going out of business. I would never of bought a Victory if I knew of their financial problems a year ago. Thanks!

  7. Steve S. says:

    Very good post Marc, looks like a classic MBA case study. I was very surprised by the announcement. Looks like off-target marketing and bad distribution positioning to me since the bikes with that 106ci are really good bikes.

    The cruiser market is too small in the U.S. for one company to financially-drive two motorcycle brands to success. There’s just no way. I’m surprised Polaris bought Indian in 2011 unless they knew strategically then they would favor it over Victory. My big question is why kill the whole damn brand? Why not merge the two brands by offering Victory bike hybrids under the Indian monikor? New set of cruisers for example. Harley-Davidson has been given a real gift with this Victory fail. I appreciate all your good posts. Cheers Marc

  8. Michelle B says:

    Hi Marc, any thoughts on how the Ness Family is handling this news? They put their heart and soul into the Victory motorcycles. Their Signature bikes were really cool, even sexy!

  9. Jim F says:

    What do you think are the chances that Polaris cosmetically changes the Victory cruiser line and launches it under the Indian name? It is a very well received engine / bike and Indian is in need of a lineup around that price range. Right now they go from a Sportster price to a Road King price with nothing really in between.

    ———————————————————————————–
    ResponseMJB:

    Anything is possible Jim given the significant research, development and capital investment that has gone into the development of the Freedom 106 over the past 10 years.
    I like your idea and price point observation for a mid-range Indian cruiser housing the Freedom 106. Hopefully, a creative action of this nature has been considered or will be considered by the leadership at Polaris. Who knows at this point? I do like your take on a re-use plan for the 106…It’s an excellent motor. Thank you for reading my blog. – MJB

  10. Antoine E. says:

    This is so unfortunate for Victory Motorcycles. Not to mention the employees impacted. Morale must be the shits there now. Can’t be good for those employed at Indian either. They are probably nervous too. This Victory action is not only an admission of leadership and operational failure, it’s an admission that you just can’t beat the Motor Company, Harley Davidson at their game in the American market. Victory must of been one heck of a money loser for Polaris to make such a huge, reputation hitting decision.

  11. Mike F says:

    Hey Marc…I’ve been telling you for years…get back on that Harley-Davidson of yours. You might as well sell your Chieftain while you still can get a good buck for it. 🙂

  12. Allan K says:

    Me, I loved the Victory motorcycles and would of bought a second one if I could afford it. Especially the Ness Series of super cool rides. I agree with you on the marketing of the motorcycles. I too hang around motorcycle dealerships on Saturdays for fun and chatting it up with buddies and I got to tell you, the Polaris dealers we visited have never appeared to interested in the Victory bikes. Commissions must of been too small compared to the other products they sold in their shops. Plus, Victory inventory sucked most of the time. Three to four motorcycles to 25 4x4s. Good job on the article. Love your blog by the way. Wanna buy my 2015 Cross Country?

  13. Steven R. says:

    Hi Marc The motorcycle market in the U.S. is too small for three big American made players. And, it is getting smaller. The young folks today are not taking to riding bikes like we did in the 60s, 70s and 80s so that market is small and us old guys, we are moving on to beach chairs and starting to save for retirement. $30,000+ for a new bagger is simply unaffordable/unjustifiable to most people today. I am betting that the same fate awaits Indian motorcycles. They’ll play the numbers on that one too and give up. Great article. Love your blog by the way.

  14. Jon M says:

    Excellent article Marc – best I’ve seen so far in the media. I too was very, very surprised at the announcement. Harley-Davidson execs are surely celebrating that Polaris could not get its shit together operating and managing two motorcycle companies. Big hit on the company’s ability to go the distance with the Indian Motorcycle brand too. I give it 10-15 years and the powersports-minded specialists will give up on that one too. Thanks for your blog and calling it as you see it.

  15. Tim H says:

    I don’t care about Polaris’s decision. I love my Highball and will continue to ride it for years to come. Doesn’t look good for the Indian brand long term either given how they ran Victory into the ground.

  16. PissOff Gary R. says:

    WTF? I cannot believe this. What happened? How could the company snuff out its entire line of Victory Motorcycles? Were they that bad? I’ve been saving for over a year to buy that cool Magnum you rode to Sturgis. WTF? Now what?

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