Polaris Industries Inc. (PII), Harley-Davidson, Inc. (HOG): How Bad Will This Recall Hurt?

Stepping up

Polaris understands the threat to its brand. It’s offering to replace the defective parts of all affected motorcycles for free. In addition, Polaris offers its 2014 Indian customers an “Indian Motorcycle Assurance Program” that offers warranty coverage, trade-in guarantees, and roadside assistance. It really needs to extend this program to its “Kings Mountain era” motorcycle customers as well.

The future

Polaris’ commitment to manufacturing excellence could minimize the brand damaging recall. If it can go a couple of years without any major recalls, then the company should move past this and continue growing its top and bottom lines, and subsequent shareholder wealth.

However, this recent Indian recall extended Harley-Davidson, Inc. (NYSE:HOG)’s already large shadow over Polaris, and possibly cemented Harley-Davidson, Inc. (NYSE:HOG)’s market leadership even further in the motorcycle market. And with Arctic Cat Inc (NASDAQ:ACAT) already nibbling at Polaris’ heels on the ATV front, Polaris will need to step up its customer service and manufacturing excellence more than ever to maintain its success.

The article How Bad Will This Recall Hurt? originally appeared on Fool.com is written by William Bias.

William Bias has no position in any stocks mentioned. The Motley Fool recommends Polaris Industries. The Motley Fool owns shares of Arctic Cat.

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