• Victory Motorcycles calls it a day

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Polaris pulls the plug on this American

It is the first story of this year that does not end well. Polaris Industries announced that they are going to wind up with the Victory Motorcycles brand and related operations. A company that produced some of the finest cruisers, baggers and tourers. It had a good run for nearly 18 years. But all of this changed mostly in the last half a decade where it struggled to keep up with the attention pulled by the Harleys and the Indian.

The Iowa brand began its journey in 1988 when it decided to enter the heavyweight championships. Since then, the company had shown steady growth and it further diversified its product lineup with cruisers, baggers, tourers and they had also started an electric timeline for their powertrains. At the end, they had around 60 models and even bagged 25 top honours of the industry including the J.D. Power 5 stars in 2006.

The decision to shut down operations came after looking at Victory’s struggles to float in the challenging market and the need for additional investments to launch new platforms. Instead, Polaris decided to concentrate more on its other brands that are showing strong performance, immense growth potentials and are running quite successfully at present.

We are talking about the company’s recently acquired Indian Motorcycles and the three-wheeled Slingshot Roadsters. Polaris wants to narrow down its resources into developing these two brands on the global platform and to eventually improve their competitive stance in the industry. All of this to foster a long-term growth and increase their shareholder values.

Polarise will gradually start to liquefy Victory Motorcycle’s assets and inventories, starting with assisting dealers with providing service and warranty coverage for a period of 10 years. It will eventually dispose of factory inventory, tooling, other physical assets and the cancellation of various supplier arrangements.

Of course, it will assist Victory owners with the supply of warranty, service and parts for a period of 10 years from now and cease operations after that.

Scott Wine, Polaris Industries Chairman and CEO said in a statement “This was an incredibly difficult decision for me, my team and the Polaris Board of Directors. Over the past 18 years, we have invested not only resources, but our hearts and souls, into forging the Victory Motorcycles brand, and we are exceptionally proud of what our team has accomplished.”

About shifting tides to other brands, he added: “The experience, knowledge, infrastructure and capability we’ve built in those 18 years gave us the confidence to acquire and develop the Indian Motorcycle brand, so I would like to express my gratitude to everyone associated with Victory Motorcycles and celebrate your many contributions.”

Polaris will still remain committed to operating out of Spirit Lake, Iowa community with Indian Motorcycle production and in the Huntsville, Alabama community with its Slingshot production.

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PRESS RELEASE

POLARIS INDUSTRIES TO WIND DOWN VICTORY MOTORCYCLES OPERATIONS STRENGTHENING ITS POSITION IN THE POWERSPORTS INDUSTRY

MINNEAPOLIS (January 9, 2017) — Polaris Industries Inc. (NYSE: PII) today announced it will immediately begin winding down its Victory Motorcycles brand and related operations. Polaris will assist dealers in liquidating existing inventories while continuing to supply parts for a period of 10 years, along with providing service and warranty coverage to Victory dealers and owners. Today’s announcement does not affect any other Polaris business units.

“This was an incredibly difficult decision for me, my team and the Polaris Board of Directors,” said Polaris Industries Chairman and CEO Scott Wine. “Over the past 18 years, we have invested not only resources, but our hearts and souls, into forging the Victory Motorcycles brand, and we are exceptionally proud of what our team has accomplished. Since inception, our teams have designed and produced nearly 60 Victory models that have been honored with 25 of the industry’s top awards. The experience, knowledge, infrastructure and capability we’ve built in those 18 years gave us the confidence to acquire and develop the Indian Motorcycle brand, so I would like to express my gratitude to everyone associated with Victory Motorcycles and celebrate your many contributions.”

Several factors influenced today’s announcement. Victory has struggled to establish the market share needed to succeed and be profitable. The competitive pressures of a challenging motorcycle market have increased the headwinds for the brand. Given the significant additional investments required for Victory to launch new global platforms that meet changing consumer preferences, and considering the strong performance and growth potential of Indian Motorcycle, the decision to more narrowly focus Polaris’ energy and investments became quite clear.

“This decision will improve the profitability of Polaris and our global motorcycle business, and will materially improve our competitive stance in the industry,” said Scott Wine. “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. Ultimately this decision will propel the industry-leading product innovation that is core to our strategy while fostering long-term growth and increased shareholder value.”

Polaris will reduce the appropriate operating cost based on this decision, while continuing to support the future growth of the ongoing motorcycle business. Polaris remains committed to maintaining its presence in the Spirit Lake, Iowa community with Indian Motorcycle production and in the Huntsville, Alabama community with its Slingshot production.

Any one-time costs associated with supporting Victory dealers in selling their remaining inventory, the disposal of factory inventory, tooling, and other physical assets, and the cancellation of various supplier arrangements will be recorded in the 2017 income statement in respective sales, gross profit and operation expense. These costs will be excluded from Polaris’ provided 2017 sales and earnings guidance on a non-GAAP basis.

Polaris will release its fourth quarter and full-year 2016 financial results and provide 2017 guidance on Tuesday, January 24, 2017. A webcast and conference call will be held at 9:00 a.m. Central Time on January 24, 2017 to discuss the 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.

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