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Polaris Arm Recalls Faulty Bikes

TM RGR PII

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Recently, N.C.-based Indian Motorcycle – a subsidiary of Polaris Industries, Inc. (PII - Snapshot Report) – announced the recall of all Kings Mountain-era Indian motorcycles of 2009-2013 manufactured from Dec 10, 2008 to Nov 1, 2012. The recall is being made to replace a defective rear wheel rim.

Indian Motorcycle fears that the rim might crack and cause a fall in air pressure in the tires, which could result in an accident. Thus, the company has advised consumers to check the rim for any crack and the rear wheel tire’s air pressure before a ride.

Indian Motorcycle has notified the National Highway Traffic Safety Administration (NHTSA) about the problem. The company will issue a notice informing the registered owners of the motorcycles about the defect and the time of repair. Further, Indian Motorcycle will issue a Safety Recall Bulletin to all Indian Motorcycle dealers and ask them to replace the faulty rear wheel assembly free of cost.

The affected motorcycles were designed before Polaris acquired Indian Motorcycles. However, the defect is not present in the recently launched 2014 version of the Indian Chief motorcycles, which have been completely revamped.

Prior to this, Polaris announced a recall of 4,500 units of its 2011 Polaris Ranger RZR XP 900 recreational off-highway vehicles in Jun 2013 due to a potential burn hazard. The vehicles were sold across the U.S. between May 2012 and Feb 2013, priced in the range of $16,000 to $16,600.

Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM - Analyst Report) announcement of the largest global recall of 3.8 million vehicles in Sep 2009, triggered by a high-speed crash that claimed 4 lives. Later on, a string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts, hampering its image.

Polaris currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry where Polaris operates are Johnson Outdoors Inc. and Sturm, Ruger & Co. Inc. (RGR - Snapshot Report). Both the companies carry a Zacks Rank #1 (Strong Buy).

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