A once strong rival of Harley-Davidson Inc.
is making a comeback after having stalled out in the
marketplace for decades.
Indian Motorcycle Co., which made the first mass-production
motorcycles in America, has been acquired by Polaris
Industries, the Minnesota-based maker of snowmobiles,
all-terrain vehicles and Victory motorcycles.
It's the latest resurrection of a 110-year-old brand known
for its Chief bikes that, decades ago, were considered some
of the world's best touring motorcycles. In its heyday,
Indian also won accolades at the racetrack and was the first
motorcycle manufacturer in the world to produce more than a
That said, the original maker of Indian motorcycles went out
of business in the 1950s and its bikes - with their
signature Indian-head logos - became collectors' items.
Numerous attempts to revive Indian have struggled, but the
company might have its best chance through Polaris, a $2
billion company known for conservative business moves but
Like Apple Computer, Polaris makes products that people
crave, said analyst Craig Kennison with Robert W. Baird &
Kennison said he likes the Indian acquisition because it
pairs the iconic brand with Polaris' manufacturing
Financial terms of the deal were not disclosed. Polaris
acquired Indian from Stellican Ltd., a British firm that
revived the brand from near death in 2004 and is the parent
of Chris-Craft boats.
Polaris executives said they hope to re-launch Indian in 18
to 24 months, which includes moving the manufacturing from
Kings Mountain, N.C., to Spirit Lake, Minn.
Indian and Victory engines will be made at a Polaris plant
in Osceola, in North Western Wisconsin. That plant was
scheduled to close but now will remain open with about 60
jobs, far fewer than what it once had.
Indian had about $11 million in sales in 2010, barely a
rounding error to Harley-Davidson's $4.2 billion. The bikes,
priced between $26,000 and $36,000, will get a thorough
review before the re-launch, according to Polaris.
"We have no intention of living in the past, but the
heritage and style that Indian brings to Polaris
significantly expands our target customer base," Polaris CEO
Scott Wine said in a conference call with analysts.
"We are not going to try and push Indian into all of our
dealerships, but we are going to make a concerted effort to
leverage the brand, along with Victory, in the top U.S.
markets," said Michael Malone, Polaris' chief financial
Bikes come with a hefty price.
At the high end of the touring bike market, Indians compete
with Harley-Davidson's most expensive motorcycles, such as
the $36,500 CVO Ultra Classic Electra Glide.
With Polaris' manufacturing capabilities, the price might
come down, said Bob Marchello, owner of an Indian dealership
in South Elgin, Ill., the closest franchise to Milwaukee.
"There are a lot of people who would buy an Indian but can't
afford one," Marchello said. "With a price reduction, I
believe we could see a crossover between Harley-Davidson
customers and Indian."
Polaris says it won't change Indians to become clones of its
Victory motorcycles, which also are heavyweight touring
Both brands are unique enough to have their own identity,
said Julie Newhauser, marketing director at Fuel Power
Sports, a Victory dealership in West Bend.
Polaris' on-road and Victory motorcycle division had $50
million in sales in the recent fiscal quarter, up 77% from a
year ago. For the full year, Polaris expects a more than 50%
sales increase for the division.
"We will increasingly look beyond North America and Western
Europe to drive expansions," Wine said.
But for U.S. customers, at least, it could take some
convincing to give Indian another chance.
The brand languished under previous owners that included a
private equity firm. Even in its prime, in the 1920s,
Indian's owners were accused of draining the company's
profits to support money-losing businesses.
In recent years, Indian was dogged by engine problems and a
cutback in the number of dealerships.
"I just don't know if the brand has any credibility in the
marketplace," said Chaz Hastings, owner of Milwaukee
"There isn't one piece left of the old company from when it
closed in the 1950s," Hastings said.
Indian Motorcycle Co. officials declined to comment for this
Optimistic for the future
Former Indian dealers say they might take the brand back,
provided the terms are right.
"This time around, I would not go into it with a wide-eyed
approach," said Jim Puma, owner of a former dealership in
Puma still has Indian posters and other items in his
motorcycle shop, although he no longer sells the bikes. He's
hopeful about Polaris acquiring the company, and he
envisions dealerships selling Victory and Indian bikes.
"Polaris is as steady as you can get," Puma said.
The acquisition could separate Indian from other niche
motorcycle companies that struggled in the recession.
One of those companies, Big Dog Motorcycles, went out of
business after a bank foreclosed on it.
Big Dog bikes often were bought by middle-age men, flush
with cash, who wanted something other than a
Harley-Davidson. The company once said some of its key
customers were building contractors in Florida, California,
Nevada and Arizona during the housing boom.
"Big Dog hung in there longer than a lot of the niche bike
builders. But the reality of the marketplace was that people
were no longer buying these $30,000 motorcycles," said Bruce
Tessmer, marketing director for S&S Cycles, in Viola.
In the early 1990s, there was sometimes an 18-month waiting
period to get a new Harley-Davidson. That fueled companies
such as Big Dog, American Iron Horse and others that made
chopper-style and cruiser motorcycles.
"We rode that wave for quite a long time," said Tessmer,
whose company once made engines for Indian.
Indian has ended production in North Carolina. But the
company still has bikes at dealerships and a loyal, albeit
"They are beautiful motorcycles," said Laurence Richardson,
publisher of Clutch & Chrome, an online motorcycle magazine.
"I think Polaris is going to bring some fundamental design
changes to Indian, too, because they have done so well with
their bikes. If you are an Indian fan, this acquisition is
only going to help you," Richardson said.
"The brand will stay around longer now than it would have
otherwise," he added.