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Victory Big on Partnerships

September 10, 2004
Filed under Features

By Joe Delmont
Editor
Victory Motorcycle, the upstart American bike maker out of Polaris Industries, is continuing to gain credibility with its new products and its sizzling new partnerships.
First, it tied in with Arlen and Cory Ness last year to produce the Ness Signature Series of its Vegas model. That move helped drive Victory from a mild-mannered Midwest motorcycle maker to a player in the motorcycle industry.
This year, Victory GM Mark Blackwell upped the ante, cutting a deal with S&S Cycle out of Viola, Wis. S&S will produce performance kits for Victory’s proprietary Freedom engine. The kits will begin arriving in Victory dealerships next spring.
But that’s not all. Victory has structured a partnership with House of Kolor, a top supplier of custom paint finishes to the automotive and motorcycle aftermarkets.
Finally, Blackwell is discussing a partnership with Lehman Trikes, the Spearfish, S.D., maker of three-wheel motorcycles.
Blackwell discussed Victory’s extended and growing partnership approach and the impact that it’s having on Victory sales during a recent interview with Powersports Business.
Victory unit sales were up close to 50% for the first six months of this year, coming in at about 2,300 units. One of the reasons for that increase, says Blackwell, is better product availability early this year. Even so, unit sales growth for the year should be somewhere near 25%, he said.
More importantly, sell through is up and there isn’t much inventory. At the same time, dealer margins are up substantially this year.
“The average retail selling prices are in the $16,000 to $18,000 range,” says Blackwell. “That’s up significantly from two or three years ago when we were discounting older models and it was about $10,000. Vegas was the turning point for us.”
The Vegas is finishing its second product year and the newer Kingpin is starting its second year.
One reason for the success of the Vegas is the Ness involvement and the Ness Signature series.
“The Ness model was important,” says Blackwell. “It was important, not so much from the model standpoint because it was limited but from image. It raised the perceived value (of the bike) in the eyes of the customers. It was $20,000, but it looked like it was much more. Then, Vegas looks like a tremendous bargain.”
Consider that there’s more product available, and Polaris dealers are learning how to sell a product that’s much different from ATVs and snowmobiles. An important part of this selling is pushing chrome accessories and apparel.
That’s where the latest partnerships come in.

Partners provide added value
Partners like S&S, House of Kolor and Lehman add value to the growing Victory package and provide additional enjoyable options for customers and profitable add-ons for dealers.
S&S has developed a performance kit for the new Victory Hammer that takes the Freedom engine from 100 cu. in. to 106 cu. in. A similar kit can pump up the 92 cu. inch to 106 cu in., as well.
The S&S partnership “was very well received” by dealers and customers, says Blackwell. “A lot of customers and dealers had been asking for more performance from Victory.”
So, Blackwell sat down with the new head of S&S, Brett Smith, at Indianapolis in February and put together the deal. Polaris is sharing its confidential plans with S&S and the leading V-twin aftermarket performance manufacturer is developing a line of products for Victory. These products will be sold directly by S&S to Victory dealers, and S&S technicians will handle all service questions.
The partnership was made easier, notes Smith, because one of Victory’s lead engine developers, Geoff Burgess, had previously joined S&S from Victory as an employee.
“It’s a natural fit (for us),” says Smith. “They’re an American company founded in the Midwest by passionate enthusiasts, and it’s the kind of company we would like to partner up with.
“If you look at what Victory is doing — it made a huge splash in contracting with the Ness family in styling — now, the next piece is performance.”
This isn’t a one-shot deal, points out Smith. “We believe this is going to be a long-term relationship, and that’s what makes it exciting.They are getting exposure to some of our confidential and proprietary information in the early stages and vice versa. This allows us to provide the very best products possible.”
Blackwell says it takes at least two years for a partnership to blossom. That was the case with the Ness project, and he expects it to be the same with S&S. But the benefit for Victory today, he says, is that the S&S deal is another endorsement of Victory.
Signing on House of Kolor is a big step in giving customers high quality, high margin options. Under the partnership, House of Kolor will provide paint to a third party paint house for four custom designs. The first paint facility is located in California, but others will be set up around the country, says Blackwell.
Initially, Victory will produce about five sets of tanks and fenders with the top quality paint and custom designs. These will be inventoried by Victory. When a customer orders the special paint at his dealer, the dealer gets the sheetmetal from Polaris and replaces the old stuff.
Meanwhile, talks are progressing with Lehman, the Sturgis firm that holds about 50% of the trike market. Blackwell says Victory is looking ahead at this growing market for aging bikers. psb

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