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Indian Motorcycle Looks to Steal More Harley Buyers With Chieftain Dark Horse

By Rich Duprey - May 21, 2016 at 11:14AM

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Stripped-down, retro-style bikes are popular, and Polaris Industries is not above going along for the ride.

The new Indian Chieftain Dark Horse is the latest Polaris Industries motorcycle that aims to peel off more customers from its rival. Image source: Indian Motorcycle.

Some people like a lot of chrome on their motorcycles; others, the stripped-down, edgy look offered by blacked-out styling. Polaris Industries (PII 0.57%) is betting there is a growing number of bike buyers looking for the latter, as it just unveiled its latest addition to its minimalist motorcycles, the Indian Chieftain Dark Horse.

New for 2016, the blacked-out hard-bagger adds a second bike to the Indian Motorcycle lineup that began with the Chief Dark Horse. You'll be hard-pressed to find any chrome on this self-proclaimed "bad ass" bike beyond the headers, exhaust pipes, and a little bit of trim -- even the classic War Bonnet is black -- but if even that is still too much chrome for you, Indian is offering accessories that make virtually the entire motorcycle even more stealthy, including air cleaners, performance cams, and slip-on exhausts.

This indicates that Polaris is finding success with this new line, one that follows the styling cues first laid down several years ago by Harley-Davidson (HOG -1.47%) when it launched its retro Dark Custom line, first with the Iron 883, and more recently with its Street 500 and 750 models. It's probably no coincidence the Streets are among Harley's most popular bikes these days, bringing new riders and buyers to the brand. Harley estimates 70% of Street bikes sold in the first year went to first-time Harley riders.

Polaris jumping on this trend makes sense, but by blacking out the Chieftain, it signals it is aiming straight at Harley-Davidson's core customer, the middle-aged male looking for a bike that pulls double-duty as both a cruiser and a touring bike.

Harley's massive market share was built making motorcycles for this demographic, which it acknowledges gives it the vast bulk of its sales. And among riders 35 and older on bikes bigger than 601 cubic centimeters, it owns 55% of the market. For eight straight years, it has been the top bike seller to this group.

Lately, though, Harley has been focusing more of its attention on what it terms "outreach" customers: women, Hispanics, African-Americans, and first-time riders. The Street line was developed with an eye cast specifically toward them.

Polaris Industries is betting Harley's core customer wants an alternative, undoubtedly a contributing factor in the drop in sales Harley has experienced the past two years. Primarily because those middle-aged white males aren't buying its bikes in the same numbers they were, U.S. bike sales in 2015 were down 3.4%, worse than the 1.6% decline it experienced the year before. And first-quarter U.S. sales are down 0.5% from the year-ago period -- hardly an auspicious start to 2016.

Certainly, the Great Recession knocked a lot of potential buyers out of the market, but Harley-Davidson has also been the victim of its own success. Its bikes are so ubiquitous that it's difficult to make a statement when everyone is essentially saying the same thing.

Back in black, the Chieftain Dark Horse is the second bike in Indian Motorcycle's blacked-out retro-styled line. Image source: Indian Motorcycle.

Enter the Indian Chieftain Dark Custom. Priced below $22,000, making it just slightly cheaper than the standard Chieftain, it's designed, Polaris says, with "an aggressive attitude that demands attention for all the right reasons." Powered by Indian's massive Thunder Stroke 111 air-cooled, V-twin engine, and blacking out the fenders, fairing, fuel tank, and saddle bags, not to mention the forks, mirrors, handlebars, and turn signals, it's a chance for Polaris to also make a statement itself about its intentions.

Unfortunately, the bike maker doesn't break out unit sales, so investors are left reaching for some meaning to the meteoric growth it says the Indian brand is achieving. Motorcycle sales in 2015 were up 33%, and gross profit dollars soared 79%, even though its Victory brand suffered yet another period of falling demand. That was largely a result of Indian's newfound popularity and the surprising success of its three-wheeled Slingshot.

In just three years, Polaris has catapulted itself into the No. 2 position of motorcycle manufacturers in the U.S., and though the Indian Motorcycle nameplate remains just a speck in Harley-Davidson's rearview mirror at the moment, it has been cobbling together a series of motorcycle introductions that may yet allow it to get close to its rival, if not one day overtake it. Decidedly dark bikes like the Indian Chieftain Dark Horse may be just the vehicles to help push it higher.

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Polaris Industries Inc. Stock Quote
Polaris Industries Inc.
$108.47 (0.57%) $0.62
Harley-Davidson, Inc. Stock Quote
Harley-Davidson, Inc.
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