Polaris
Exits Marine Industry
Polaris Industries Inc. recently announced it has discontinued
manufacturing products for its marine division.
According to Tom Tiller, Polaris president and CEO,
the decision was based on several factors including
the continuing decline of sales in the personal watercraft
industry, as current market sales are approximately
half the size from its peak in 1996 with uncertain signs
of recovery. Polaris reported that sales from its marine
division in 2003 comprised of only three percent of
the company's total sales.
As technology and distribution channels evolved, the
division's lack of commonality with other Polaris product
lines created challenges for the company and its dealer
base. In addition to experiencing escalating costs and
increasing competitive pressures, the company claimed
the marine business has never been profitable for them,
with a generated pretax loss from operations of $13
million in 2003.
"This was an extremely difficult decision for the board
of directors of Polaris because our people are very
proud and we have a proven record of succeeding in all
we do," said Tiller. "However, the personal watercraft
industry and our position within the market simply is
not where we need it to be for this division to be viable.
This decision is designed to foster long-term growth
and shareholder value."
"The decision to exit the marine business will have
minimal impact on the employment level at our manufacturing
facilities," said Tiller.
Less than 25 per cent of Polaris dealers in North America
carry the marine products.
The company also announced its marine division inventory
at dealerships is at the lowest it has been in a number
of years. However, they will assist dealers in liquidating
existing inventories and will continue to provide replacement
parts, service and warranty to its dealers and consumers.
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