MONEY

Polaris prepares to roll out Indian Scout motorcycle

Matthew Patane
mpatane@dmreg.com

Another classic motorcycle is being built in Spirit Lake.

A pre-production Indian Scout motorcycle sits along the assembly line at the Polaris Industries factory in Spirit Lake on Aug. 8.

Polaris Industries has expanded its revival of the Indian brand with the launch of the Indian Scout, a lighter, less expensive model than its fellow Indian motorcycles.

With the new Scout comes more production and jobs for northern Iowa, where Polaris operates the Spirit Lake plant and another in Milford.

Company officials said Polaris is in the midst of hiring an additional 300 people in Spirit Lake. Once finished, Polaris will employ 1,050 in Spirit Lake and 300 in Milford.

Final assembly of the Scout, the company said, will be done in Spirit Lake along with the other Indian Motorcycle models. The Milford plant produces off-road vehicles, Polaris' main source of revenue, and other vehicles.

Steve Menneto, Polaris' vice president of motorcycles, said bringing back the Scout was always the company's plan.

"It was always known as that bike that was cutting-edge," he said. "It was easy to ride, it was nimble, it was powerful, it was really the leading bike of its time."

The Minneapolis-based company formally announced the Scout's re-emergence at this year's Sturgis Motorcycle Rally. Polaris made a similar announcement at last year's Sturgis rally when it launched the production of three iconic Indian motorcycles: the Classic, Vintage and Chieftain.

Those three models have been on the market for the better part of a year. In that time, Polaris went from zero dealers selling Indian motorcycles to more than 150 in North America, including two in Iowa, Menneto said.

Jeremy Richardson, the general manager for McGrath Powersports in Cedar Rapids, said the dealership received its license to sell the Indian models at the end of July.

Interest in the Indian bikes was almost immediate, Richardson said. He said customers have come in from all over the state asking about the motorcycles.

"The amount of folks that have come in wanting to look at, test drive, learn about these motorcycles, has been really inspiring," he said. "The energy behind it has been great.

"Everybody knew the Indian name. They just now are trying to find out, 'What's the current Indian?' " Richardson said.

Brenny's Motorcycle Clinic of Bettendorf is now Indian Motorcycle of the Quad Cities.

Menneto said the company is confident that demand for the Scout will be high.

"There's not a day that goes by that someone doesn't ask me, 'So, when are we going to get Scout?' " Menneto said.

The Scout should be available for purchase sometime in the last three months of the year, he said. The Scout starts at $10,999, while the Classic, Vintage and Chieftain are priced between $18,999 and $22,999.

Hype for the Indian motorcycles is helping Polaris' bottom line as well. Polaris reported a profit of $177.8 million for the first half of 2014, up 14 percent from $155.5 million for the first half of 2013.

Motorcycle sales alone grew to $182 million, a 79 percent jump from $101.7 million.

In addition, Polaris' stock price has jumped about $38, or about 35 percent, from before the launch of the Indian models in early August 2013 to the beginning of August 2014.

Jaime Katz, an analyst for research investment firm Morningstar, said the Indian bikes are "a nice response" to Harley-Davidson, a titan in the motorcycle industry.

"I think the brand stands for the same things Harley stands for, more or less. It's very American and historic and legendary," Katz said.

Katz said the Scout can also serve as an answer to Harley-Davidson's Street, a lighter, midsized bike launched earlier this year.

Polaris still faces significant challenges if it wants to capture motorcycle market share owned by Harley-Davidson, Katz said. While Polaris sold about $220 million worth of motorcycles in 2013, Harley-Davidson sold upward of $4 billion.

"It's going to be really hard to close the gap in a rapid way," Katz said.

Menneto is confident. "We're committed. This isn't a 'Hope it works' effort. This is a 'This will work' effort," he said.

Jackie Donkhong puts the finishing touches on an Indian Roadmaster motorcycle at the end of the assembly line at the Polaris Industries factory Aug. 8 in Spirit Lake. Polaris is reintroducing the Indian Scout this year, a model used by U.S. troops in World War II.

About the Indian Scout

The Scout was one of Indian's most popular models, along with the Chief. It was made starting in 1920. In World War II, the U.S. Army sent 30,000 Scouts for troops to use.

The 2015 version starts at $10,999.

The Scout is different enough from the other Indian models to appeal to a wider customer base, said Steve Menneto, Polaris' vice president of motorcycles.

"For first-time riders, or early-in-their-experience riders, it's very forgiving, it's very easy to ride, but for those seasoned riders, it has a lot of power, a lot of fun characteristics," he said.