Yesterday Polaris Industries announced that they will acquire Global Electric Motorcars, LLC (GEM) from the Chrysler Group. GEM has annual sales estimated to be $30 million and has been the leading LSV manufacturer. IMS estimates their annual sales volume to be around 3,000 units, although they have been under pressure lately as more manufacturers have entered the market. The sale will take about two months to complete and will strengthen Polaris’s On-Road division. Polaris also recently acquired Indian Motorcycle. Learn more: Tradershuddle.com
Comment: GEM is strong in the commercial LSV segment particularly in government and fleet sales to end user such as parks and universities. Polaris already has their Breeze LSV for the consumer personal transportation market and an LSV version of their Ranger EV which originally targeted the military segment but has commercial applications as well. The acquisition gives Polaris probably the most recognized brand in the LSV market and saves them time and money spent developing a brand of their own. GEM has not substantially changed their vehicles in recent years so they will definitely benefit from high level and continuous innovation that Polaris puts into their product lines, as witnessed by their model development in the UTV market. In addition, Polaris has an existing network of dealers that is around ten times the size of GEM’s current network. The acquisition could add a real boost to the level of competition in the LSV market.
Another question is whether Polaris will be seeking more acquisitions in this space. While GEM is more oriented to the commercial market, a company like Tomberlin produces LSVs targeting the consumer market. Tomberlin’s management has a relationship with Polaris from helping them develop some of their off-road products in the past. Tomberlin also has other products such as the Vanish electric UTV, electric ATVs and the Schwinn brand of scooters that could supplement Polaris’s existing product lines .