Polaris Buys China-Based Powersports Builder; What Does It Mean?

In could be one of the biggest “if you can’t beat them, join them” moments in recent memory in the powersports market, Polaris today announced it is purchasing a China-based manufacturer of off-road vehicles.

The company, HH Investment Limited, manufactures the Hammerhead line of gas-powered go-karts and UTVs, plus some electric utility vehicles. In the press release announcing the deal, Polaris officials talked about opening new markets for its products while also “expanding our international manufacturing footprint” thanks to the Hammerhead manufacturing facility in Shanghai, China.

The move is somewhat historic, yet at the same time is just the latest in a drawn-out acceptance by what some might call the “traditional” powersports brands in North America of select, relatively new (at least to North American customers) and relatively unknown (until recently) Asian manufacturers.

Fifteen years ago, those who worked at the big, recognized powersports brands mocked and ridiculed the newer Chinese, Taiwanese and Korean brands, and several manufacturers of those products were at the time developing sub-par products, mainly for the youth ATV market. Some companies, though, have shined through time, including some that have long histories of privately building motorcycles for companies like Yamaha, Suzuki and Kawasaki.

The first signs of acceptance here, though, occurred when brands like Arctic Cat, Polaris and Bombardier Recreational Products (BRP) started having companies like E-TON and SYM manufacture and private-label their youth quads. Arctic Cat soon took it one step further, having the respected Kymco corporation build engines and soon entire adult ATVs for the company.

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The Hammerhead brand of UTVs and carts will soon be a part of Polaris.

So far, the “big four” snowmobile brands haven’t partnered with other manufacturers for building sleds, but if sales in Europe and Russia continue to expand, it could happen in time.

Below is the press release from Polaris.

 

Polaris Acquires Hammerhead Off-Road Vehicles Business

Expertise in Light Utility Vehicles and Go-Karts Complements Polaris’ Existing Product Portfolio

 

MINNEAPOLIS (February 18, 2015) —Polaris Industries Inc. (NYSE: PII) today announced it has signed an agreement to acquire HH Investment Limited (”Hammerhead”).  Hammerhead manufactures gasoline powered go-karts, light utility vehicles, and electric utility vehicles in Shanghai, China.  The Company markets its products globally under the Hammerhead Offroad® brand, along with maintaining key private label relationships with other OEMs.  The transaction is expected to close within the next 90 days.  The terms of the pending transaction were not disclosed.

“Hammerhead provides Polaris with a unique opportunity to expand both our international manufacturing footprint and our armada of off-road products,” said Scott Wine, Polaris Chairman and CEO.  “We are impressed by the entrepreneurial spirit and passion for innovation of the Hammerhead team, and look forward to pursuing new customers in new markets with their high-quality and low-cost off-road vehicles.  We are excited to establish Polaris’ operational footprint in China and believe the opportunities for further international growth are significant.”

Hammerhead’s main manufacturing operation is located in Shanghai, China, near Polaris’ Chinese subsidiary.  Hammerhead also has an operation located north of Dallas, Texas responsible for light assembly and sales distribution of its products in North America. Hammerhead will continue to market its products under the Hammerhead brand and operate under its current leadership structure as a stand-alone entity.

“I am thrilled at the opportunity to make Hammerhead a part of Polaris and its growing portfolio of global brands,” said Jerry Qiu, Chairman of Hammerhead. “I am very proud of what we have built at Hammerhead. We share the same enthusiasm and passion for off-road vehicles as Polaris and look forward to sharing our mutual expertise as we take our products, engineering and manufacturing skills to the next level.”

 

About Polaris   

Polaris is a recognized leader in the powersports industry with annual 2014 sales of $4.5 billion.  Polaris designs, engineers, manufactures and markets innovative, high quality off-road vehicles, including all-terrain vehicles (ATVs) and the Polaris RANGER® and RZR® side-by-side vehicles, snowmobiles, motorcycles and on-road electric/hybrid powered vehicles.

Polaris is among the global sales leaders for both snowmobiles and off-road vehicles and has established a presence in the heavyweight cruiser and touring motorcycle market with the Victory® and Indian Motorcycle® and Slingshot® brands.  Additionally, Polaris continues to invest in the global on-road small electric/hybrid powered vehicle industry with Global Electric Motorcars (GEM), Goupil Industrie SA, Aixam Mega S.A.S., and internally developed vehicles. Polaris enhances the riding experience with a complete line of Polaris Engineered Parts, Accessories and Apparel, Klim branded apparel and ORV accessories under the Kolpin®, Cycle Country® and Pro Armor® brands.

Polaris Industries Inc. trades on the New York Stock Exchange under the symbol “PII”, and the Company is included in the S&P Mid-Cap 400 stock price index.

Information about the complete line of Polaris products, apparel and vehicle accessories are available from authorized Polaris dealers or anytime at www.polaris.com.

 About HH Investment Limited

HH Investment Limited is a global manufacturer of off-road vehicles. HH Investment Limited manufactures a portfolio of gasoline powered go-karts, light utility vehicles and electric utility vehicles with power ranging from 49cc to 500cc. The go karts are primarily recreational while the light utility vehicles are suited for lawn and garden maintenance work. HH Investment Limited sells most of its products under the Hammerhead Offroad® brand in North America, Europe, and Asia.

Information about HH Investment Limited products sold in NA can be found at http://www.hammerheadoffroad.com/.

 

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