Indian Motorcycle Aims for Late 2006 Production in Southeast
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The current owner of the Indian Motorcycle brand, Stellican Limited, which also owns Chris-Craft, has said that it is planning to get Indian motorcycles#151apparently the Chief, Spirit, and Scout series#151back into production at the end of 2006. Its quarterly announcement also says it expects to create a production facility somewhere in the southeast U.S. with a decision likely by the end of 2005.
Although Indian had previously said that it would use 2005 to develop its dealer network, its current Quarterly Update to the Indian Motorcycle Community says that it is not presently setting up dealers, although it does solicit emails from parties who would like to be dealers.
Indian Motorcycle Company president David P. Wright has previously said that the company expects to use the models produced by the previous Indian Motorcycle firm as a starting point for its own bikes. It has also said that it would like to use the Powerplus engine, although it recognizes that meeting the stiffer 2008 EPA emissions requirements might be a challenge for that motor. The new Indian website shows three model lines#151Chief, Spirit, and Scout#151all of which appear to us to be the same models (or very nearly so) produced by the brand’s previous owners.
The company has surveyed owners of previous Chief models to find out what problems they have experienced and how to address them and has been testing the existing models to address those issues. It has also been establishing relationships with suppliers to create a supply line when it is ready to start production.
Our expectation is that, as with most start-up motorcycle manufacturers, the timeline for production will slip some. We predict that we will see prototypes during 2006 and that production will start in limited numbers during 2007.
Initial production, often viewed as the realization of a company’s goals, is actually the most difficult time because, instead of being the beginning of a positive cash flow as some expect, the need for cash to spend actually spikes as many aspects of making, distributing, and supporting a motorcycle brand suddenly need to be funded and developed. The company’s planners can also be misled by an initial rush on the first models by those eager to have one.
However, sales then tend to slow as less-emotional potential buyers wait to see how the bike works and how well the company supports it. It often years before a new motorcycle maker starts printing black ink on its statement sheet, and investors who don’t understand this and expect to see profits when production begins pull out at this critical juncture. Hopefully, Stellican understands this and, like Polaris backing Victory, has the financial wherewithal to get through this period.
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