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Victory dealers largely surprised by closure

By Dave McMahon

Many dealers not looking to replace the shuttered brand

Of 22 Victory dealers from 12 states and Canada who participated in the Q4 2016 Powersports Business/BMO Capital Markets Dealer Survey, most of them said they were surprised to learn that Polaris had pulled the plug on the brand after 18 years. Further, Victory dealers surveyed in large part are in no hurry to find a replacement brand.

The survey shows that 82 percent of the dealers were surprised to learn upon the January announcement from Polaris that the Victory brand had been axed.

Source: Powersports Business/BMO Capital Markets

Source: Powersports Business/BMO Capital Markets

When asked if they expect to replace Victory with another brand, 68 percent of the Victory dealers surveyed they did not expect to replace. On the other hand, 32 percent of the respondents said they did expect to replace it. Of those dealers who are considering replacing Victory, they sighted Indian as the most likely to be added. Others under consideration are BRP, Triumph and Husqvarna.

With about 400 dealerships in the U.S., there is plenty of Victory product on showroom floors. About 55 percent of the Victory dealers surveyed had 11-15 new Victory bikes in stock. About 18 percent had more than 20 new Victory bikes in stock, and about 10 percent of dealers each had 0-5, or 6-10, or 16-20 bikes in stock.

Major unit sales of new Victory bikes in 2016 brought a range of responses from the Victory dealers surveyed. About 27 percent of them sold 0-10 new Victory bikes in 2016. About 32 percent sold 11-20 new Victory bikes in 2016, and 27 percent sold 21-30. More than 30 new Victory motorcycles were sold in 2016 by 14 percent of the respondents.

Not surprising, Victory dealers who took the survey shared a wide range of thoughts on the brand’s closure. When asked “How will Victory’s exit from the motorcycle business affect your dealership?” dealers responded as such:

Source: Powersports Business/BMO Capital Markets

Source: Powersports Business/BMO Capital Markets

• Big loss, we do quite well with them.
• None.
• Not too much.
• It depends on how much help Polaris gives us to move the product.
• It will hurt while we try to find a way to sell off our inventory. After that, I don’t have much of a concern.
• We had to take Polaris ORV and sleds to get Victory. We didn’t want the snowmobiles. Victory is a great line and profitable, filling a market that other lines don’t.
• It will help me to expand our Indian business.
• It will affect our volume but not our profit.
• After the initial shock, it will be a good thing. Polaris needs to hit the brakes and slow down. It will help Indian sales now, and Indian will not be spread so thin.
• Other than being hung with unsellable inventory, not much.
• It depends on whether they man up with big ($10,000) rebates to move the dead iron. No matter what, it will cost us thousands.
• Not a drastic change, but more mad Polaris customers though.
• It will impact new bike sales as new Japanese bikes [are] nearly sale-proof.
• Short term it’s a disruption, but long term will not make much of an impact.
• Minimal.
• It shouldn’t too much.
• Less flooring cost.
• We will lose money from all the stuff they required us to take, like P&A, fixtures, signs, major units. They should buy it all back.
• Not at all.
• Marginally.
• Complete loss of confidence in Polaris.

Source: Powersports Business/BMO Capital Markets

Source: Powersports Business/BMO Capital Markets

Here’s a further look at the Victory dealers who participated in the survey:

• 86 percent of them sell other Polaris products, with only 23 percent of them also carrying Indian.
• 82 percent are single-store operations, with 87 percent of them bringing in at least $5 million in annual revenue
• 45 percent were on plan for Q4 2016
• 36 percent were below plan for Q4 2016
• 18 percent were above plan for Q4 2016
• 72 percent reported overall business conditions as either very strong, good, or average in Q4 2016  

 

 

 

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