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September 10, 2010

The Long, Slow Climb of the New IndianStellican takes a guarded approach to rebuilding a brand

Source: Big Twin Dealer

As one of a small group of industry professionals invited to tour the North Carolina plant, customer builder and online publisher Cyril Huze says he attended with no judgments or pre-conceived ideas, and came away impressed. The tour was less the splashy pre-launch PR dig most OEMs are known for and more an attempt to share their ideas and three years of work with someone who lives daily the business of motorcycles.

Huze senses that not only is the company guarded about its approach to the market, but it is also humble with the responsibility of bringing back an iconic brand — an attitude he felt from Julius down through the factory employees. "They know they can make history, want to be part of it, and live the brand like their own," Huze says.

Huze went into the event armed with pointed questions from readers of his blog ( http://www.cyrilhuzeblog.com/) to which he was seeking precise answers. What he heard from Julius told him the company was serious about its undertaking. "Stephen Julius told me that he would never have bought the Indian brand without getting all the archives from Gilroy," Huze notes. "He and his small team at the time spent months on their knees opening boxes and studying all pieces of paper they acquired — memos, salaries, technical data, letters from clients and dealers."

CAN WE QUOTE YOU ON THAT?

In going with the singleline dealership plan, the first Indian Chief motorcycles will be "ultra-premium" products comparable to Harley-Davidson's CVO lineup. Base prices for the four models available will start at $30,999 on the low end and top out at $35,499.

Julius says this follows a similar strategy Stellican has taken with other products. Over time, he expects the company to move from the ultra-premium market into the premium market, an area he defines as predominately being Harley-Davidson's general model range. The value range, he says, consists of the Japanese cruiser market and the Sportster.

"We're going to start off in the ultra-premium segment and over time, as we develop new platforms, we'll move into the premium segment — but we'll always be a premium product," Julius says. "As a small, niche producer, that is the only territory that makes any sense, strategically and economically, especially in these current markets."

While he would love to sell bikes at all price points, the company has to be realistic by understanding what kind of product it has and playing to its strength. "We certainly can't be in the business of selling bikes at a loss," Julius adds.

Given its premium positioning, Indian expects that the first run of 750 units is a sensible approach that can later be amended to grow as the company grows. Over a five-year period Julius says the company could reach 6,000 units per annum.

"We actually think the opportunity is bigger than that," he says. "If you asked me why did I buy this business in the first place it's because I have a conviction that over a 10-to 15-year period there is ... no reason why Indian shouldn't sell one bike for every 10 Harleys sold," he says. "That means in the long term, we should have a 30,000-unit business. But it will take time. It will take developing a dealer network. It will take developing a model range and all the other important things that go with a passport product."


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