Is This the Next Growth Market for Recreational Vehicles?

Editor's note: this article was previously titled "Is This the Next Growth Market for Motorcycles?". The Motley Fool apologizes for and regrets this error. 

Harley-Davidson (HOG -0.10%) may have brought trikes into the mainstream with its Tri-Glide back in 2008, but Polaris Industries (PII -1.17%) may have just made them cool.

What the Batmobile might have looked like if Polaris has designed it. Source: Polaris Industries.

The new three-wheeled roadster SlingShot comes with styling reminiscent of a rocket sled rather than a motorcycle. Like Can-Am's Spyder, the SlingShot opts for two wheels in front, one in back, a design that separates it from much of the rest of the pack. The Tri-Glide, for instance, favors the reverse, which is more in line with police styling. But where the Spyder has almost an all-terrain-vehicle look to it, the Polaris trike gives the design a jolt of aerospace engineering, making it look more akin to a rocket sled.

Trikes originally began as hobbyist conversions led by John Lehman, who attracted the attention of Harley, which partnered with him for its Tri-Glide until it later moved the manufacture in-house. Now the trikes factory-made counterparts have all the conveniences riders expect from traditional touring bikes, yet the market is quickly changing so that even the demographics of the target rider are different.

Whereas the trike was once favored by retirees and older bike riders who appreciated its stability, which allowed them to extend their riding years, the new designs are more likely to appeal to the same thrill-seeking demographic that comprise the usual motorcycle market.

Part car, part motorcycle, all performance? Source: Polaris Industries.

That's also showing up in the price. While a Boss Hoss trike can set you back upward of $50,000 or more, Harley's Tri-Glide Ultra goes for a still-pricey $33,000, a price tag very much in line with the pocketbook of its core customer, the middle-aged white male. For six straight years, this core customer has bought more new on-road motorcycles in the U.S. from Harley than any other bike maker, and in the premium 601cc-plus segment, he's bought more than nine times as many Harleys than bikes from its nearest competitor. 

Polaris, though, is making its trike more accessible. The base model SlingShot starts at under $20,000, and despite Harley's smaller Freewheeler coming in under $25,000 -- putting it in the same league as its Road Glide touring bike -- the premium version of the SlingShot is still $1,000 cheaper.

And Bombardier's Can-Am is going after a different market altogether: It wants the person who's never ridden a motorcycle before. The base model Spyder starts at under $15,000, though the luxury model RT Limited will set you back about $30,500. 

Yet when looking at the SlingShot, we're getting a feel for a completely different kind of DNA here. On one hand, you see the traditional motorcycle styling in Harley's trike and Can Am's powersports heritage. On the other, Polaris has something new, exciting, and exhilarating.

Open-air cockpit gives an exhilarating right-at-the-road ride. Source: Polaris Industries.

Unlike its rivals, the SlingShot features side-by-side seating versus front-to-back, giving it the feeling more of an automobile than a motorcycle. And whereas you have a handlebar with Harley and Can-Am trikes, the SlingShot features a steering wheel.

The trike industry is still new, so guessing growth at this point is a bit of dart-throwing, but one analyst feels Polaris can add $60 million in revenues this year from SlingShot sales by selling 3,000 units at around $20,000 each. 

Polaris itself is said to estimate the trike market could represent as much as $300 million to $500 million in revenue for it once the SlingShot gains traction. That would far exceed the $219 million in motorcycle sales it made last year and would represent about 13% of 2013 total revenues.

The SlingShot is an exciting new player in the three-wheeler market and represents another weapon Polaris has to take down the Goliath that is Harley-Davidson.