Indian motorcycle geared up to go head to head with Harley
May 04, 2012 (Menafn - Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) --Fans of the legendary Indian Motorcycle Co. -- for decades Harley-Davidson Inc.'s biggest rival -- have something to hope for as Indian rolls out new bikes with engines made in Osceola.
It won't rekindle the famous "Indian wars" with Harley in the 1920s, but the latest resurrection of the maker of Chief motorcycles has a fighting chance -- something not seen in decades.
The original Indian went out of business in the 1950s, with its signature Indian-head logos becoming collectors' items.
Numerous attempts to revive the company failed, but Indian has its best chance under Polaris Industries -- a 3 billion Medina, Minn., manufacturer that acquired the brand in 2011 and is known for snowmobiles, all-terrain vehicles and Victory motorcycles.
Polaris now is redesigning Indian bikes from a clean sheet of paper. The goal is to capture the spirit of the Chief and other Indians from a half-century ago, but to use a modern engine and other components to make the bikes rider-friendly.
On that level, Indian will go "head-to-head with Harley-Davidson," said Indian marketing director Darren Bassel, originally from Brookfield.
The bikes will appeal to "open-minded Harley riders," Bassel added.
Polaris says it hopes to have the first newly designed Indian motorcycles ready to roll in late 2013, with the engines manufactured in Osceola and the bikes assembled in Spirit Lake, Iowa.
The company considered moving the Osceola work to Minnesota, Iowa or Mexico. But, combined with making engines for Victory motorcycles, it says there's enough work for the plant, which has 130 employees.
Polaris has added about 250 jobs in Spirit Lake over the past 18 months and has plans to add jobs at the Osceola plant.
"Between Iowa and Wisconsin, these bikes will be made in the heart of America," said Polaris Chief Executive Officer Scott Wine.
A classic look
Polaris says it won't change Indians to become copies of its Victory motorcycles, which also are heavyweight bikes. Both brands are different enough to have their own identity, according to Polaris, with Indian appealing to riders who want a classic look to their bike.
Polaris visited motorcycle museums and talked with longtime Indian enthusiasts to capture the design cues of bikes popular more than a half-century ago.
"It has been a monumental task," Wine said.
Persuading motorcyclists to give Indian another chance also could take some doing.
The current models compete with Harley-Davidson's most expensive motorcycles, such as the 37,249 CVO Ultra Classic Electra Glide.
The brand languished under previous owners and, even in its prime 90 years ago, Indian's owners were accused of draining the company's profits to support money-losing businesses.
In recent years, the company was dogged by engine problems and a cutback in the number of dealerships. One dealer in Michigan says it still has a brand-new 2003 model-year Indian Scout for sale -- priced at 16,000.
There isn't one piece left of the old company from when it closed in the 1950s. But the brand that's survived in some iteration since 1901 still tugs at the heartstrings of classic motorcycle enthusiasts.
"I don't think it's too late," said Aaron Frank, editor at large of Motorcyclist magazine.
"There's a lot of value in the name and its incredible history," Frank said.
Polaris is a relative newcomer to motorcycles, having entered the field with its Victory bikes 14 years ago. Yet it has passed Japanese competitors Honda, Yamaha, Kawasaki and Suzuki to become the No. 2 seller of the biggest heavyweight motorcycles (with engines 1400 cubic centimeters and up) behind Harley-Davidson, according to the company.
"The global motorcycle industry is incredibly large, and there is certainly room for more than one very successful heavyweight motorcycle company," Wine said. "Indian is going to be a global motorcycle."
In its recent fiscal quarter, Polaris said Victory and Indian motorcycle sales combined were up about 40% from a year earlier. The company's total sales, including all-terrain vehicles, increased 25% to a record 673.8 million.
Last week, Harley-Davidson said it had 1.27 billion in motorcycle segment sales in the recent fiscal quarter, up 20% from the year-ago period, and including 277.5 million in sales of parts, accessories, general merchandise and other products.
In 2011, Harley captured 55% of U.S. heavyweight motorcycle sales. Polaris doesn't reveal its market share, but even with Victory's success there's likely a huge gap between it and Harley-Davidson.
Still, analysts say Polaris needs only a slice of the global motorcycle business to be successful.
The company has the management skills and balance sheet necessary to revive Indian, an iconic brand with untapped potential, said analyst Craig Kennison with Robert W. Baird & Co.
"Polaris builds a high-quality bike," he said. "The Indian brand has been strong in the motorcycle market for a long time, but it has never had a world-class manufacturing effort behind it."
Hopes for staying power
Former Indian motorcycle dealerships say they're cautiously optimistic about the brand's resurrection, although some had bad experiences before and aren't interested in giving Indian another chance.
Among the hopeful is Puma's Custom Cycles, a former Indian dealership in Racine.
"It's a whole different ball game this time out. Polaris has the confidence of consumers," said owner Jim Puma.
He still has Indian posters and other items in his motorcycle shop, although he hasn't sold the bikes in years. There are Indian riders who come to Puma's Custom Cycles from hundreds of miles away because it services their bikes.
"I would love for Indian to have some staying power," Puma said.
Hard sell for Harley owners
Longtime Harley-Davidson enthusiasts say they're committed to Harley and won't be switching brands, especially if they belong to Harley Owners Group chapters that are a big part of their social life.
"As a H.O.G. member, I don't even consider buying another brand of bike," said Mike Miller, director of the Kettle Moraine Harley-Davidson Owners Group.
The 36,000 price of a 2012 Indian could be a turnoff for motorcyclists unsure of whether the brand has staying power and how well Polaris will develop the dealership network.
"It's a nice bike, and it looks great, but personally I would not be interested," said Bill Pagelsdorf, assistant director of the Kettle Moraine H.O.G. chapter.
Currently, Polaris has more than 400 motorcycle dealerships in North America -- most of them for Victory bikes. As of Dec. 31, Harley-Davidson had 635 full-service U.S. dealerships, 69 in Canada, and 1,347 full-service dealerships worldwide.
Polaris is creating an Indian dealership plan that could tap its 1,500 dealers for all-terrain vehicles, snowmobiles, Victory motorcycles and other products -- but all of those locations won't necessarily carry Indian bikes.
Polaris wants respect in the market even if it doesn't match Harley-Davidson's sales.
"We see ourselves as another iconic brand hanging out with Harley," Bassel said. "I think we are going to be another viable heavyweight-motorcycle brand and will be part of that scene for years to come."
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