Two decades of growing popularity for all-terrain vehicles has driven Polaris (NYSE:PII) to a near-pole position in terms of industry market share. Recent flat demand trends have derailed growth prospects for the time being, and other potential potholes exist, but Fools may want to at least consider taking the shares out for a test-drive.   

First-quarter results released yesterday were nothing to ride high on, as slack demand for ATVs continues its five-year run. ATVs sales, which accounted for 70% of the company's overall revenues, fell 9% year over year, while the second-largest division (parts, garments, and accessories (PG&A)) grew 6% over the same period. Sales of Victory motorcycles were up 5% and represented 8% of sales in the quarter.

The ATV market is a different story, as Polaris has the second leading market share -- around 20%. Automobile giant Honda (NYSE:HMC) controls close to 30%, followed by Kawasaki and Arctic Cat (NASDAQ:ACAT). Even mighty Deere (NYSE:DE) entered the market in 2004. Honda has been around since the 1970s, but the rest have only been around since 1985.

In addition to the stagnant demand for ATVs, Asian manufacturers are increasingly entering the U.S. and gaining share by selling similar machines at lower prices. A recent Powersports Business article mentioned Suzuki as growing market share rapidly over the past year. Lower demand and higher supply is good for customers, but not the best for industry players.

Foreign supply could hurt Polaris even more over time, as most of its manufacturing occurs in the heartland states of Minnesota, Iowa, and Wisconsin. It recently turned to Taiwan to make a youth ATV but has more to do to prevent greater inroads from lower-cost competition.

The stock isn't overly cheap at 17 times forward earnings, and a debt-to-capital ratio near 60% could magnify any further industry challenges, but the 2.8% dividend yield does offer some consolation. There are definitely concerns to mull over, but if the long-term trend of growing ATV demand continues, Polaris is one of the few ways for Fools to play in the industry.              

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.