Why Harley-Davidson Can’t Benefit From Victory’s Demise

I reproduce below what I think is a great analysis by Rich Duprey for the Motley Fool. In it, he explains why the demise of Victory Motorcycles will not help Harley-Davidson, quite the opposite. I agree with him that the exit of Victory is only going to intensify the competition against the industry leader. Read, then voice your opinion.

“Unfortunately for Harley-Davidson (NYSE:HOG), there’s no way it can capitalize on the decision by Polaris Industries (NYSE:PII) to kill off its Victory brand of motorcycles. Although it means there will be one less American-made motorcycle on the market, which ought to bolster the made-in-America motorcycle king, its rival’s move to focus instead on its fabulously successful Indian Motorcycle nameplate means Harley is going to have an even harder time selling its bikes.

A losing proposition. Few would argue Polaris didn’t make the right move. Despite 18 years on the market, Victory hardly made a dent in the consciousness of bike riders. Growth was negligible, and the brand had accumulated losses of $100 million for Polaris. With an industry in the midst of a downturn, pouring more resources into Victory was not feasible, certainly not when Polaris has the Indian brand that could benefit further from the additional investments that will be thrown at it. Because Indian has made swift inroads into Harley’s market share, quickly jumping into second place in the short span of years since the nameplate was bought out of bankruptcy, having even greater resources available to it could see larger swaths of the market fall into its camp. As Harley-Davidson’s fourth-quarter earnings show, that’s a distinct possibility. While the bike maker finally snapped a two-year losing streak of falling quarterly sales in the U.S., the gains weren’t anything special. Revenue rose 0.1% over 2015, as it sold exactly 33 more bikes in the period than a year ago.

Declining volumes. At least it didn’t try to fudge the shipment numbers this time around. Unlike the last two years in a row — when it pushed out more motorcycles onto dealer lots in the fourth quarter than were warranted, to be able to say it made its full-year shipment forecasts — this year Harley just wouldn’t have been able to justify the big spike needed to make even the low end of its forecast. In the end, shipments fell 12%. That means Harley-Davidson missed its guidance for the year. Where it had said it was confident it would ship between 264,000 and 269,000 motorcycles in 2016, it ended up shipping a little over 262,000 bikes.

Harley maintains that it grew its market share in motorcycles 601 cubic centimeters and larger, though that’s seemingly hard to square with the results. Its motorcycle sales were largely flat for the period, and for the year they’re down 1.6% worldwide, while bike makers such as Honda Motors (NYSE:HMC) say their unit sales have consistently risen in successive quarters. And Polaris itself just reported that Indian brand sales jumped more than 20% in the fourth quarter, continuing the double-digit (and sometimes triple-digit) gains it has notched since relaunching the bike. The problem, of course, is in how one defines the market. Harley talks about bikes of 601 cc and above, Polaris references those 900 cc and over; and Honda doesn’t discuss market share at all, but then its bikes run the gamut from 49 cc models, such as its CRF50F trail bike, to cruisers such as the 1832 cc Gold Wing F6B. With both Harley and Polaris claiming market-share gains, the losers are likely to be Honda, Suzuki, BMW, and other imports.” (photography courtesy Harley-Davidson and Indian Motorcycle)


42 Responses to “Why Harley-Davidson Can’t Benefit From Victory’s Demise”

  1. 1 Gorgax Feb 8th, 2017 at 9:16 am

    The Victory marque was developed as an alternative to H-D. Then the parent company came along with the revived Indian marque, again, pitched as an alternative to H-D. Victory did not have the brand name recognition enjoyed by the other two manufacturers and was always going to be the loser. Never likely to be turned into a low volume, niche market brand, closure was inevitable, given the sliding sales numbers. So farewell, Victory, you will be missed, but not by many.

  2. 2 JohnnySpeed Feb 8th, 2017 at 9:50 am

    Until Polaris releases some actual sales numbers, which it never does, a 20% sales increase could still equal about 100 bikes. If Polaris can build a not ugly bike that’s fun and easy to work on and ditch the terrible “heritage” “legend” blah blah blah marketing speak they spew constantly I’d consider them as an option. But, as it is, Harley parts are easier to come by, Harley’s are easier to de-uglify and Harley’s are still less of a pain than Polaris’ to work on. So nope to Polaris.

  3. 3 Brad Ervin Feb 8th, 2017 at 10:14 am

    Benefit is a loaded word as is the term “market share.” Companies aren’t brought down by market share but by loss of profitability. Maserati probably isn’t concerned with its market share against Ford but both are concerned with profitability. Market share is a number of units sold in a given demographic. As long as a company can sell enough units to profitably maintain production the company will remain. If a particular company hasn’t enough unit sales to maintain current infrastructure its profitability will suffer. A company may have infratructure to expect production of 50 units or 50,000 units but when sales drop below those expectations the overhead of that infrastructure will eat up the profit.

    Victory, Buell, Crocker, Vincent and the old Indian all had enthusiastic supporters but lacked profitability.

    We all have our favorite but we are all better off when many producers chase many users.

    I ride an old Ironhead. If I had my druthers everyone would ride an Ironhead (parts would be easier to find). Actually that’s a lie. I don’t want to see the new Indian, Motus, Harley, Can-Am or even Honda go out of the marketplace as they all add diversity and diversity adds users and users add depth and interest to motorcycling. May they all thrive.

  4. 4 SYF Feb 8th, 2017 at 10:21 am

    A lot of potential buyers worry that Polaris may pull the plug on Indian when times get tough.

  5. 5 CATFISH Feb 8th, 2017 at 11:07 am


  6. 6 Pat h Feb 8th, 2017 at 11:25 am

    Had 2 indian dealerships close in the last couple months in Chicagoland area ( 11 million people ) I think there’s 1 maybe two left in a 60 mile radius, don’t see any on the road anywhere

  7. 7 x-HD Rider Feb 8th, 2017 at 11:35 am

    Polaris did it all wrong. They should of done up grades and design changes to the Victory. That would’ve made it more popular. Then they should of cut back on Indian and made it harder to get and that would’ve made it more desirable. Why in the world did polaris try to produces over twenty models out of that little plant.
    The fools let the Osceola plant sit when they could of built bikes there too

  8. 8 richards Feb 8th, 2017 at 11:38 am

    I would start by asking Mr. Duprey just how many units Victory and Indian has sold per year compared to Harley. If we knew that, we could make a valid comparison. Since we don’t know unit sales it’s impossible to fully accept his analysis…it’s comparing apples and oranges. As mentioned, there are many other factors/variables involved..eg discretionary spending for “toys”such as premium MC’s is a currently depressed the entire market.

  9. 9 BobS Feb 8th, 2017 at 11:58 am

    I normally like Motely Fool but I think they got it all wrong this time. Victory was the only thing giving Indian legitimacy. Sure Polaris is overplaying the phony heritage card and making imitation old bikes, but at least when they had Victory this was just a goofy style exercise from a company that was serious about making motorcycles. At least we thought they were serious…’cause Victory. Now we know they’re not. Now we know they cut and run as soon as one of their dozens of other acquisitions and brands looks like “a better horse to ride”. They’re making these fake old bikes because they mistakenly think they can out Harley Harley. If a real biker wants an authentic heritage ride, there’s still only one. Indian has nothing to gain as Polaris hasn’t put anything into Victory since they acquired Indian so there’s no extra resources to put into Indian. That brand was already getting everything. Indian’s market share will continue to be a very small percentage of Harley’s, and will probably even shrink as riders like me who would have considered Indian now will not. In a few more years after not beating Harley at Harley’s own game the morons of Medina will shut down Indian to shift resources to Slingshot. Or GEM electric vehicles. Or aftermarket Jeep bumpers. Indian’s days are numbered and Harley will win again.
    I’ll say again, Victory didn’t die because the brand didn’t have appeal. It had lots of appeal and made profits many years. One of my bikes is a ten year old Victory that’s equal or better than anything Victory made last year. So why trade? There’s about a hundred thousand of us who were just waiting for them to make some improvements. And probably more than that who would come to the table once those improvements were made. And before anyone tries to flame that statement keep in mind, those morons of Medina I mentioned earlier already paid to develop a smoother transmission, electric windshields, integrated gps touch screens, new water cooled engines, key fob locking saddle bags, throttle by wire and more. And they CHOSE to only put those technologies that were already paid for into half their bikes. Golly gee, bikers like to buy the bikes with the new stuff, who woulda thought?

  10. 10 marcus Feb 8th, 2017 at 12:08 pm

    I would not put much stock (pun intended) in what The Fool has to say about HD. They have been negative on the motor company for over a year, have owned, and recommended Polaris stock. They do not own HD stock.

    From an investment perspective the two companies should not even be compared as the bulk of Polaris’ business is not in motorcycle production (less than 13% of total sales). A hit to the ATV market would have a much higher impact on Polaris stock than marginal increases in Indian sales.

    The Fool has been made a fool of as PII’s stock is flat over the last year and HD is up over 30%.

  11. 11 Teddy Rinkler Feb 8th, 2017 at 12:20 pm

    BobS. FYI You are factually wrong. Since 1997, there was only 2 years when Victory was profitable and selling more than 15,000 bikes a year. Indian will not be affected by the Victory shut down. Instead Indian will benefit as explained in the article.

  12. 12 James just another crazy kiwi Feb 8th, 2017 at 12:37 pm

    I did not see any inclusion on how the 8 valve will affect sales, I know people here are keen to get test rides and some will certainly be trading up. New Engines always cause a spike in sales.Allot of Victory Riders over here bought the bikes because of the additional performance over the HD product.Some will look at the 8 valve
    The Global market may well sustain HD as the USA market seems to be dead in the water.
    Which ever way we look at it MotorCyling has challanging times coming up.
    Triumph and Ducati have cool smaller bikes, the small HD’s are not that pretty but will adapt ?
    I wonder what Indians next move will be. Bit like a chess game with multiple players except the stakes are very high.

  13. 13 PhiBetaZappa Feb 8th, 2017 at 12:37 pm

    I agree that the Motley Fool is on the best of days an unreliable source of information and on their worst propagators of Fake News . In fact I’d go so far with this article as to say their conclusions are blatantly uninformed , prejudicial and absurd .

    Of course H-D [ as well as Indian ] will benefit from the demise of Victory as will every other heavy weight cruiser manufacture including the new batch of Euro Cruisers . e.g. Business 101 ; When a competitor falls to the wayside everyone around them benefits . Perhaps Mr Duprey and the ‘ Fool ‘ crew in general might benefit from a bit of business education and experience ? As to who will win in the new Harley vs Indian wars ? That one’s a given . The Motor Company . Hands down . With the entire crew gearing up for a rousing chorus of ” Tonight we’re gonna party like its 1953

  14. 14 Phil Zapata Feb 8th, 2017 at 12:39 pm

    I agree that the Motley Fool is on the best of days an unreliable source of information and on their worst propagators of Fake News . In fact I’d go so far with this article as to say their conclusions are blatantly uninformed , prejudicial and absurd .

    Of course H-D [ as well as Indian ] will benefit from the demise of Victory as will every other heavy weight cruiser manufacture including the Rice Cruisers and the new batch of Euro Cruisers . e.g. Business 101 ; When a competitor falls to the wayside everyone around them benefits . Perhaps Mr Duprey and the ‘ Fool ‘ crew in general might benefit from a bit of business education and experience ?

  15. 15 BobS Feb 8th, 2017 at 1:09 pm

    Teddy Rinkler it is you who are factually incorrect. Victory only made profit in 2 of the last five years with their best ever year being 2012z

  16. 16 Patrick Feb 8th, 2017 at 2:03 pm

    With Trump president, people are rightly concerned about economic and political uncertainty. Difficult to feel confident in purchasing a Harley or Indian or…First Trump 3 weeks. A Muslim ban challenged in court, protests and fake news. Shame on him.

  17. 17 JohnnySpeed Feb 8th, 2017 at 2:17 pm

    Brad Ervin – Well said.

  18. 18 Greg Feb 8th, 2017 at 2:21 pm

    Not sure how many people out there are like me, but I was a proud Victory owner for the last 7 years and was thinking of moving into a new bike. I had been looking at the Indians just before Victory was shut down and at the same time kept seeing great things written about the new M-8 engine. I just lost faith that Polaris would keep Indian during the next tough times and could no longer go that direction. Ended up really liking the new Harley-Davidson motor after going for a couple of test rides and went that direction. This new motor seems aimed right at riders like me, I would never have considered a Harley before, but was won over by how nice it was. The Polaris decision to ignore and then shut down Victory moved me right over to Harley.

  19. 19 Bobby Feb 8th, 2017 at 2:54 pm

    Already helping my dealership, two Indian customers cancelled their deposits for Road Masters and decided to go with Ultra Limiteds… Customer 1 stated they lost the confidence in the brand, Customer 2 realized that the Road Master was 2K more then a limited.

  20. 20 Thomas Leaton Feb 8th, 2017 at 3:28 pm

    Mr. Cruze’s article does show that it is possible that Victory’s demise won’t help Harley, but it does not prove or explain why this is inevitable.

  21. 21 JustAKid Feb 8th, 2017 at 4:29 pm

    Polaris did about 4.7 billion in sales in 2015. They had to split their entire motorcycle division staff between two brands. Both brands had to work to separate themselves from each other and their efforts sometimes resulted in cannibalizing their own sales in attempts to push their two brands.

    A good example of this is Polaris sacrificing the Victory brand by spending all resources on tooling up Indian proprietary engines and model components. Hence the lack in model and feature changes for the last few years for Victory. You only have so much when motorcycles aren’t you primary source of income.

    Now…since they decided to focus on the more profitable and scalable Indian brand. You have the entire motorcycle division and resources from a multi-billion dollar machine focused on one goal…growing the Indian brand.

    I don’t know if thats a positive thing for HD…

  22. 22 Blackmax Feb 8th, 2017 at 4:35 pm

    There are a lot (thousands) of riders who bought Victory that were dishearted
    & angry at the news of its demise.
    However in talking with some of those folks & checking out the blogs & youtube,
    a lot of them are going to sit tight & ride it out till the “wheels fall off” !
    There are some casualties, of course, but a lot of the aftermarket & the larger dealers
    are telling their customers that we will still be here & we’re not going any place !
    They will still service & provide (aftermarket) parts for Victory, plus the fact that Polaris has said that they will provide parts for a 10-year interval (not out of the goodness of their hearts) !
    But it is something to hang your “hat on” .
    I personally think that Polaris is not simply going to toss millions of dollars worth of engineering & equipment away ! that in some shape or form you will see a “re-badging” of some of the middle of the line like the High-Ball, the Gunner etc, etc.
    Remember not every Indian had the big fenders that everyone either loves or hates !
    If I had a Vic Cross type bike, I think I’d still be riding it & to hell with all the “Doom & Gloom” !!
    All I do know is this, not many of them that I’ve talked to or seen want anything to do with H-D !!!

  23. 23 DaveT Feb 8th, 2017 at 4:39 pm

    I sort of liked Victory, but only sort of. Just another heavy American V-twin – and I already own a heavy American V-twin, so why would I buy another one?
    As for Indian, pretty but I have no desire to own one. But, the missing bike is an Indian 4. They are lovely, and a modern one just might tempt me to open my wallet!

  24. 24 1550tc Feb 8th, 2017 at 4:50 pm

    Motely Fool is pure internet investor porn……..investors like porn addicts just love those sites and the mental masturbation they get from them

    When Octanes are getting outsold 10 to 1 and S Glides out sold the Cross Country 1000 to 1

    Victories looked good BUT to me they had zero soul, sound and image ………as for world wide appeal NADA

    A shitty Gilroy , S & S and Rick Doss parts bin Indian chief had more soul

  25. 25 Tom Ryan Feb 8th, 2017 at 5:45 pm

    Just saw HD CEO Matt Levatich on a news program saying that Harley plans to release 50 new models in the next five years. Makes you wonder what they’re working on these days.

  26. 26 highrpm Feb 8th, 2017 at 9:10 pm

    50 models in 5 years. yea, right. wall-street porn. these ceo elites had not a damned thing to do with making the h-d signature bikes that fuel the soul of bikers.

  27. 27 seymour Feb 8th, 2017 at 9:28 pm

    Maybe they shut down the wrong one

  28. 28 sbashir Feb 9th, 2017 at 12:42 am

    This article is written by a Harley hater, apparently trying to depress HD stock prices so he can buy more stock. He is beating up Harley for having sold “only” 262,000 motorcycles instead of 264,000 in a down market in which even Polaris had losses and both Victory and EBR went out of business. He didn’t even mention international sales growth of 2.3% and 40 new dealerships. Totally one-sided review. Why would CH even publish it?

  29. 29 Doc Feb 9th, 2017 at 10:28 am

    Indian vintage is the best bike I have to date owned,having traded in a victory,before that an fat boy that the flywheel shifted at 3200 miles but was declined warrantee as it was being raced,have a shovelhead that we have raced for years,that one is not for sale,I think amf is back.

  30. 30 Michael Fagan Feb 9th, 2017 at 1:03 pm

    Motley Fool is BS.

  31. 31 bernard czech Feb 9th, 2017 at 2:00 pm

    i am thankful that Polaris made Victories, it replaced my disappointing harley. of course i am not happy that they are gone. i dont care for the indians looks + although upgraded to look old the Vic’s were more my style. i have a 13 Hammer which weighs more than my traded harley but feels lighter + handles better, not a bagger guy as they are too bulky + heavy + way to $$$$, life goes on + i ride what i like!!

  32. 32 Martin Twofeather Feb 9th, 2017 at 5:08 pm

    I think it’s pretty simple if Polaris wasn’t losing money Victory would still be here,they over spent and failed to produce dealerships that could sell their quality product thus stockholders in light of Indian to which they are dumping money hand over fist into want a return at least within 5 years. No return no support……..

  33. 33 Tim Feb 9th, 2017 at 5:44 pm

    The Indian motorcycle still has a lot more parts made in China than the Harley. Made in the U.S.A. still means everything to me and the bike with the most U.S.A. made parts wins.

  34. 34 Hans Feb 9th, 2017 at 9:05 pm

    I own two Indians now. 2014 Chieftain and a 2016 Dark Horse Vintage. Before that I owned over a dozen Beemers. Still own two! Yes the Indian bikes pay homage to the Indian past but the modern content clearly proves that Indian doesn’t rely totally on the past while Harley does. The Indian comes with much more content when compared to a similar HD. And check out the 2017 HD Road King Special. Looks to be a HD response to the Indian Dark Horse. The front fender could of come off the Victory Magnum or across Country. It’s MSRP is $21,999. You can get a Chieftain Dark Horse for the same price and it has soo much more to offer over the Road King.

  35. 35 burnout Feb 10th, 2017 at 2:09 am

    Motley Fool IS entertaining. I agree completely with 1550tc. 50 new models for the Motor Co? Riiiiiiiiiiight. peace

  36. 36 dfranklin Feb 10th, 2017 at 6:53 am

    yesterday, got an email from Indian: MORE GLORY IS ON THE HORIZON, VISIT YOUR DEALER ON FEB 25TH 2017 TO SEE THE NEWEST ADDITION TO THE INDIAN FAMILY. I can forward it to Cyril if you’d like.

  37. 37 Teddy Wrinkler Feb 10th, 2017 at 7:07 am

    sfranklin. I think Cyril is aware. He is an insider!

  38. 38 Highrider Feb 11th, 2017 at 12:10 am

    Victory sales had really nothing to do with Harley Davidson, my experience with Victory owners is they are extremely ANTI Harley and came from Japanese or German bikes. Kinda like Democrats and Republicans, too stupid to see the good in what is best for the country.
    I would guess that Magnum, Vegas, Jackpot and Cross Country riders will be interested in Harleys
    Vision and Cross Country Tour will be interested in Honda, BMW etc.

    There you have it black and white, just like America.

    PS Patrick, my brokerage account has gone up significantly since Nov, has yours? AND yes I am buying a new Blacked out Road Glide with that money.

    I own both Victory and Harley Davidson ( and a Triumph but we won’t get the english involved)

  39. 39 Knucklehead Feb 11th, 2017 at 9:26 am

    First the economy dictates sales. Harley way in the lead as #1 would sell less in a downed economy than a company that sells far less motorcycles. Indian sales more than likely are in the realm of safe sales. Until and if they ever reach the sales HD has only then you HD naysayers may understand. As far as Victory HD will get more sales. Only a few maybe who knows. Only the name Indian has been around since 1901. Many have tried to reintroduce it and all have failed. Polaris lost with the Victory. Now in design HD surely has had it’s flaws. A few years back they discovered with their wind tunnel they needed to shorten the lower fender as it caused highway wobbles on it’s Sportster. Indian one day I believe is going to pay the high price in court for those parachute fenders on those bikes from loss of life from the wobbles on the E-ways. Just the opinion of a 52 year rider.

  40. 40 Dieter Sowade Feb 13th, 2017 at 9:53 am

    Hi Guys.

    As the ONLY Victory Dealership in Cape Town ( South Africa) my comment is this : It’s not even WHAT Polaris did , it’s the way they did it and the day before the announcement, we still made a BIG HOO HAA about the fact that we had just sold (and delivered) the very first and ONLY Victory Octane in SA, to one of our clients. The next morning I had to call him with an entire omelette on my face to tell him he had just bought a “defunct” dinosaur and being who we are, I offered him his money back. Fortunately he LOVES the bike and declined my offer.

    What ( in the name of Hades) prevented Polaris from contacting their long suffering and loyal dealers (in our case – 6 years) a week before the time to give them the “good” news which, at the very least, would have allowed us to let our clients down “gently” as opposed to making us look like a one night stand with you-know- what all over us. We found out about the whole debacle on the Internet !!!!!!

    As luck would have it, we also deal in Harley (and other makes) and Victory was never our bread & butter line so we’ll be OK and as much as I love my Victory CC (which I will ride for the time being) I will never trust a Polaris Product again. Having said that and as far as SA goes, I also believe that they have shot themselves in the foot, as most guys that were considering Indian are now saying “so what happens if THAT doesn’t make money in 5 years time ?”

    Emptor Caveat !!!!!!!

    By the way, don’t complain too much about Trump or I’ll send you our President Zuma ☺☺☺☺

    Dieter Sowade

  41. 41 jdiamond Feb 13th, 2017 at 11:40 am

    Victory is better engineered than HD so I wouldn’t be surprised if those Vic engines show up in a mid-priced new Indian model at some point in the future.

  42. 42 Chris G Feb 14th, 2017 at 9:29 pm

    Patrick suck a dick I support the ban. Stick to motorcycle topics not bashing my President

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