Polaris Industries reported a strong start to 2021, with double-digit growth in each of its core segments including a 31% increase in sales revenue from its motorcycle operations.

Motorcycle sales, which include Indian and Slingshot plus related parts and accessories, raked in $165.6 million in sales revenue, up from $126.6 million during the same quarter of 2020. The motorcycle segment had a gross profit of $8.0 million compared to a loss of $1 million in Q1 last year. Polaris also reported Slingshot sales more than doubled over the quarter.

Sales were particularly robust in North America, where Polaris reported an increase of over 60% in Indian sales, a strong showing compared to the overall mid-to-heavyweight motorcycle industry’s mid-30% increase over the quarter.

While the quarter’s numbers were positive, there are some concerns about maintaining that momentum moving forward as dealer inventory levels are well below optimum levels. Polaris estimates that dealer inventory is down 40% compared to the first quarter last year as manufacturing is limited by supply chain constraints and logistical issues.

Mike Speetzen, Polaris’ interim chief executive officer, provided an example of foam being in short supply at one point, resulting in vehicles rolling off the line without seats. When the supply of foam reached sufficient levels, workers went back to finish those partially-complete vehicles.

Polaris says it is trying to mitigate supply chain delays by adjusting manufacturing capacity and altering logistics to optimize the flow of parts, but the company does not see dealer inventory returning to targeted levels until 2022. We may also see some strategic price increases on some models to help balance supply versus demand.

The Q1 report also revealed some of Polaris’ plans for electric vehicles. Last September, Polaris signed a 10-year partnership with Zero Motorcycles to produce off-road vehicles and snowmobiles. We’ll see the first product of that relationship in December with an electric Polaris Ranger side-by-side. There are no plans yet to expand that relationship to include Polaris-produced motorcycles (Zero is obviously hesitant about competing with itself), but the company is open to the idea, whether it’s with Zero or another partner.

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