Good morning, everyone. I want to, again, thank everyone for coming and attending, the ones that were here last night, the reveal, and then also this morning for the presentations. We got a full day. I know some of you are staying around for the all-day to ride this afternoon at Wyoming. Some are going to have to leave a little bit earlier. That's fine. We'll give you some instructions towards the end of the presentations on how we're going to work that. The bathrooms are just at the end of this hall if you need those. There'll be six presenters this morning. Go relatively quickly. There's not going to be a lot of numbers in this presentation. The numbers that you will see, you should consider those forward-looking statements, and there are risks and uncertainties around those numbers.
Check out our 10-K and our Qs just to make sure you know about the risks and uncertainties about those numbers. The other thing I'll mention is there is a webcast in the room. There's little tents on the table. Yellow Zone is the site you need to be looking for, and this rubber duck, I think, is the code. You can go to that, and you can download the presentation. There's not handouts. You probably noticed that. There is a PDF on the website, so you can download the presentation. We'd prefer you not try to listen to the webcast here on your computers here in the room because there will be a little bit of a delay. This is being webcasted, just so you know.
We'll have questions after each of the presenters, a few questions, and then there'll be additional Q&A time period at the end, once we get through all the presentations. With that, I will turn it over to our CEO, Scott Wine.
Thanks, Richard. Good morning, everybody. I hope if you were able to join us last night, you can see why we're so excited about the future of Polaris. As you know, with these analyst meetings, Mike and I have a pretty simple rule. You hear from us all the time, there's no use for you to hear too much from us today. We'll be around for Q&A. I will tell you a couple of things. First of all, we had our Board strategy session last week. I'm very fortunate to have a knowledgeable, engaged, and strong Board of Directors. We came out of those two days talking about board strategy. They understood why we're so confident in where the future is going.
Not only the stuff that Ken's doing on the manufacturing and productivity and supply chain standpoint, but what the brands and businesses are doing, what we're doing from an engineering and quality perspective, really the whole company, and hope you saw our confidence come through a little bit last night. The ride, I know some of you actually have jobs that you have to get back to, but I would strongly encourage you to change your flight. You ride this new Pro XP, you'll understand why we're so confident in what that platform means to us. Chris will talk about the products. Indian Motorcycle continues to give us this huge opportunity for growth and just across the business with our investments in technology and to make sure we're there for our consumer. This new Think Outside brand.
For many years, I would sit in internal meetings and say that we suck at marketing. I can't say that anymore because I think we're finally starting to realize how we can leverage our brands, not only our individual product brands, but the Polaris brand itself. The whole idea here, as we've grown our company and grown the markets that we serve and the products that we offer, making it a more inclusive brand to bring more people into the category. As I was on the floor last night talking to dealers, the interest in Polaris Adventures, the interest in offering new ways for people to engage with our sport, was pretty exciting. I'm going to step down and turn it over. We'll be here all day, but enjoy the morning. Thank you.
Okay, next up is Ken Pucel. He runs our operations and engineering team.
Morning, everybody. Hopefully, everybody's doing well. I'm going to walk you through some of the inside mechanics of the company before we get to the business units. You've probably seen this wheel before. This is how we communicate with inside the organization, the operations strategy. In the center, you'll see the words that Scott talked about yesterday. Winning as a customer-centric, highly efficient growth company. We take that, and we say: What does the next five years look like? We set a series of aggressive targets, largely around occupational safety, delivery, quality, cost, and new product introduction. You see those goals that we set for the five years here below. In fact, we're going to challenge ourselves to up some of these targets because you'll see in the subsequent slides how our performance is.
We're starting to meet some of these only after a year of working on it. How are we doing today right now for the calendar year 2019? Let's break it down. Safety, Delivery, Quality, Cost. Let's take Occupational Safety in the upper left. This is when you walk into our facilities, how safe are the employees? You'll see 2015, 2016, 2017, we had a really nice decline, then we bought TAP, we bought Boats, and we bought WSI. They weren't on our safety program. We put them on the safety program, what happens? It's a great safety program. Immediately, we drop it back down. When you say: How good is that? If you were to put a dotted line on the top of this that showed best in class, we would be there. That's how good we are at occupational safety.
It's a big deal. That's what we look at when we're running manufacturing operations. On the quality side, I like rework as the metric. Rework is the metric where all the stuff that happens upstream shows up on your manufacturing floor in terms of volatility. Did you get the supply chain right? Did you get your design right? Did manufacturing make it correctly? You can see that we are now at a level of rework that's the best we've had in our recorded history. So it's coming down nicely. This is the hard work around the safety and quality operating system that we've been working on for so long and improvements in our product development process. On the delivery side, Chris Musso mentioned this yesterday, we historically had been around a 60% on-time delivery company.
When we say we were going to get it to the dealer, we got it to the dealer within that window at about 60%. These bars show that with Factory Choice and RFM for side-by-sides, we increased our on-time delivery greater than 90%. In fact, Factory Choice is 94%. We really like what we're doing here. Then in the lower right, you see our cost picture. This is the gross profit walk between our 2018 and 2019. You see that big headwind around tariffs. What you also see is that green bar, where we're seeing pricing and productivity really kick in and get some horsepower to ground for us. You can see the power that's sitting there when the tariffs, if the tariffs, get remediated like we hope they're going to do. Let's break it down a little bit more.
You saw us on a journey in the last 24 months to improve product quality and safety. We created a new organization. We hired really great leadership that came from the automotive side of the industry, and we focused on the post-sale surveillance or how do we know what the products are performing like out in the field, and then we focused on the ingredients. How do you design the product? What's your supplier development? What's your manufacturing controls? From our benchmark where we drew a line in 2017, a lot of great work. Warranty claims per unit, which is the actual claims rate that's coming through right now, down 45%. I already showed you the rework on the prior slide, down 30%, and supplier PPM, the amount of defects that we see in the manufacturing environment due to suppliers, down 37%.
This is a great improvement for us, and it starts to iron out the volatility through our supply chain and one of the main reasons and enablers on why that delivery performance improved so much. Let's look at our manufacturing network. You can see in the upper right, although it's somewhat small print, you can see that we've continued to add capabilities in our manufacturing network and it's global. It's not just North America anymore. In addition to Monterrey, Mexico, we have Opole. We've got a joint venture now in Vietnam. We've got a small plant in Shanghai, China. We've got increasing reach. Our utilization is 68% today, and as we increase efficiency in the plants and grow the business at the same time, over the next five years, that'll increase to 85% utilization.
The real message there is we don't anticipate needing to build a big plant in the near future. That's good. We're going to be in a leverage window right now. What are some of the things, the highlights? We added Factory Choice in the plants. We bought a machining company in Monticello, Minnesota, called WSI, which you're probably familiar with. We're nucleating new technologies there and insourcing capabilities in our powertrain machining. That's been a real win for us. We transferred our mid-size motorcycles for Europe over to Europe as part of what we call the Genie Program. We've also added some paint capacity in the bottleneck in Monterrey, Mexico, which increased our Monterrey, Mexico, facility capacity 18%, which is a really good play for a low-cost location.
We started a joint venture in Vietnam, and we've increased the sourcing that we send through that plant by about 100% from about $30 million. That's some highlights in the manufacturing plant network. Now, let's talk VIP productivity. How do you get from current margin performance up to challenge our historical peaks? Just a couple of highlights here, and I mentioned some of them already. Over 2,770 projects completed in 2018. Some are large, some are small, all contributing to gross profit improvement going forward. I'm going to talk in the next two slides about our supply chain transformation, which we call Sunburst, and some of the highlights there. We talk about Sunburst, our supply chain transformation.
After 65 years of adding to our supply base, how do you go back and make sure that you're working with the best suppliers possible out in the industry? That's what Sunburst is all about. It's four Waves over multi-years, and we believe that there's over $200 million of value there in cost savings when we execute. Not just cost savings, supplier rationalization, product quality performance. It runs the whole gamut. I'm going to show you on the next slide, there are actually 64 different value dimensions that we're driving. It's four Waves total. Wave 1, we're through nine steps of 11 steps. We've identified the opportunities that we believe are in Wave 1, and we're overachieving nicely what our original assessment was for value. We're also seeing a 40% reduction in supply base.
This is actually happening just like we said it was going to. Some of the mechanics. I mentioned 11-step process. We're through nine on Wave 1. We're just now getting to the point where Mike Donoughe, who's sitting in the back, our CTO, is going to get the baton. We know the suppliers. We know the parts that are moving. We know what we're going to execute. Now our engineers are going to take that, and they're actually going to validate the part changes through either new product year launches or off-cycle validation. That's all happening. On the right side of the slide is the actual list of the value dimensions that we drive with each supplier.
You'll notice number 64 is pricing. There are several other dimensions, and each supplier brings something unique and different to the whole discussion, whether it's how you do new product development, or it could be supply chain rationalization, speeding up the supply chain. All of these are in play every time we go out and do a sourcing. A lot of great work going on Sunburst. We just executed the supplier conference, which is our step four of the 11 steps for Wave 2. We're initiating the second Wave of 4 as we speak, and it's going really, really well. In summary, we're working on those things you'd consider that we should be working on, occupational safety, delivery, quality, cost, and new product launch excellence. I'm going to pause there and ask for questions.
Okay. Any questions for Ken? We'll take a couple of questions at each of the end of the presentations. Craig?
What are you doing to get signals from the field from the [inaudible].
Yeah. The question was, what are we doing to listen to the field to understand the product performance? A couple of things. One of the things that we put in place, we call it post-sale surveillance. We didn't have a really formal post-sale surveillance. We got feedback always historically from the field, but we didn't have a formal organization the way we have it now that trends all the feedback. We get social media feedback. We get parts sales that we see. We have warranty. We have safety claims. All of those come back to a group of people, and then we apply some artificial intelligence trending over the top of that, and we're looking for changes or anomalies. You've got computers looking at the data, you've got people looking at the data, and then we ask ourselves, do we have a safety signal?
That's the first thing we're looking for. If we do, we act on it. We'll always do that. Do we have a quality signal that we can improve on? Some of the things that we've seen, front drive noise on RANGER. You see that, we feed that to the engineering people, the engineering people go after it. We've got a really good capability there. The formal job responsibility is to listen to the field. It's solid.
Any other questions? Yeah, Laura.
[inaudible]
So the-
It's also fluid now.
The tariff question. There are some things that we did, and over 70 different actions to help mitigate the tariffs for us. They range from that Genie Program transfer of mid-size bikes that we were making in Spirit Lake, Iowa. We were always going to make our mid-size bikes in Europe for Europe, and we accelerated that. As that came through, that was one example. We bought WSI and Monticello as a machine capability. It just so happens that it was nicely timed because when we went out and looked at the tariffs, the insourcing that we are doing into our own now inside machine center there is about $30 million of additional value that came into the United States because of that. We're working with suppliers during negotiations. We are asking them to change their country of origin.
Sometimes these countries had a Chinese plant and a Vietnam plant and a Mexican plant, and they were able to change where they manufacture. All the way down to we're making sure we don't have any shipments that are hitting U.S. soil, or if they are, they're through bonded warehouses, so we don't have any structural inefficiency in how the tariffs fall. There's a whole list of things that we're doing, over 70 inside, and we'll continue to have great ideas and manage as we go forward. We've taken a nice bite out of it.
That was tariffs go away, but next year because of some of the things that you've done, the run rate would actually come down and that would be a benefit.
Mike, do you want to talk about year-over-year?
Yeah. Am I on?
Yeah. Mike.
Hello? Thanks, Richard. The discussion that we had on the earnings call last week, I'd just refer back to that. $110 million-$120 million this year. The List 3 being at 25%, adds $30 million-$40 million. Because of what we did with the motorcycle transition over into Poland and 232 going away, we probably get another $10 million-$20 million of relief. One of the things that Ken didn't point out is we have elements of our supply chain we can't move out of China. There's literally nowhere else that produces the type of products, and there's even areas where we could transition out, but the tariff would have to move to, what, 40%, 50% to make it economically viable. If they remain, we're going to continue to have that drag.
On a sequential basis, year over year, it becomes less of an impact year over year, and then we get to a point of steady state, in 2020.
Tim.
[inaudible] .
I'll take second.
No, you want to take the first one?
Go ahead.
Just kidding. Eventually, we would hope that it would all go to the bottom line. Obviously, if that great event were to happen, we'd have to talk through, we've got existing inventory. Ken's organization has really built up a strong capability around tariffs, unfortunately. The team would have to go back, especially where it's direct and coming in, we would see the price reduction immediately because we're paying the tariff through customs. It's the indirect, we would need the procurement guys to go back and make sure that we're getting the commensurate price reduction through the materials. Then obviously we'd have to bleed it through inventory. We'd also look at it relative to the competitive environment, what's going on with promo. I mean, we'd have a pretty broad look. Yeah, it would be a pretty significant impact to us.
The second part of the question, our JV was with an existing supplier, but it was a Vietnam-based supplier. It wasn't a China-based supplier, but it was a Vietnam-based supplier. We were doing a nice chunk of business with them. They really have a great array of metals-based manufacturing technology. We talked through it, and we said, "Well, let's do a JV." We doubled the size of the value that's going through there. Sequentially, we'll start to step up the capabilities of that JV from parts to hopefully assembly of things and things like that going forward. We've got a lot of runway there, and we like that one. That's a really nice footprint over in Asia through JV.
Okay. We got to end it there. Thanks, Ken, Mike. All right, we're good. Okay, next up, Pam Kermisch, Vice President of Customer Experience.
Thank you. Good morning. If you take a look at our strategy, one of the things that you're going to see is that we are committed to being a customer-centric, highly efficient growth company. Customers are at the heart of everything we do and actually very critical to the growth that we hope to achieve. What does customer-centric mean? Well, it starts with our current owners. They are very important to us because ultimately we want their repurchase, we want their loyalty, and we need their advocacy. They're the most likely ones to go bring in the next customer. We have invested quite a bit in a capability to make sure we can better understand our customers, and we can activate against them, creating more personalized communications so we can be more relevant.
When someone's a brand new owner, the messaging is going to be very different, the content we offer up than someone who's an active owner or someone who's a lead maybe kicking the tires on a potential purchase. Very important for us and something we continue to invest in. What's really exciting is it's beyond the idea of each business being able to understand their customer is having an enterprise view. Now we can look at customers across the entire enterprise and understand where there's overlap, even better, where there's not overlap, and there should be. What about customer value? The insights and the opportunities that come from this are very exciting, highly efficient for us as a company because we have such great diverse businesses.
When you look at the information that we've got just here as a couple of examples, 90% of our customers own one of our brands. We also know that in powersports, most customers own more than one category. This is a huge opportunity for Polaris. When you look at off-road customers and you look at their five-year average spend, specifically with off-road, and compare those who own only our off-road brands and those who own off-road and maybe they're also a TAP customer or they're an Indian Motorcycle customer, the amount they spend in off-road is more. There are insights we can mine and keep getting better there. From a growth perspective, we've had tremendous growth over the past 65 years and brought in a lot of new customers. If you look at the lower blue line, that is our new customer.
That is our customer growth. We're today at 5 million customers. If we continue on the growth trajectory we have, which is respectable, you can see we have significant growth in the next 10 years. However, if we're able to add a little bit of diversity to that, younger customers, female customers, multicultural customers, you can see we can grow quite a bit more. We aim to grow our customer base by nearly 50% in the next 10 years. In order to know where we're going, it's important to understand where we are today. We took a look at what about our existing customer base? What do we look like today? The upper left shows the makeup of our customer base, and this goes back to the early 1990s. Some of the percentages may look different than today.
If you look at it, 75% of our customers are Gen X, boomers, they're older. Then you look at from a diversity perspective, 10% are non-white. You look at from a female perspective, 15%. I believe that's a little bit underrepresented because that's based on warranty registrations. Perhaps the husband warranty registers, the female may ride. Regardless, you can see this very much reflects what powersports looks like today. As the market leader, we are not going to stick with the status quo. We know we can do better. I'm going to highlight a couple of examples across our businesses just to give you an idea of where we're already doing well organically and where we think we can lean in a lot more. You look at RZR and RANGER, certainly dominated white and older.
If you look at even the differences between them, RZR has 10% of their customers that are non-white versus RANGER at half of that, and the same thing with millennial customers. We know on RZR there is something there already that is interesting to these other populations, and on RANGER, as a market leader, we know we can do better. Giving you a couple other examples. On Indian, we have opportunities across the board because there is quite a bit of diversity in the motorcycle market, and we under-index there. When you look at Slingshot, 20% of our owners today are African American and Latino without us doing anything specifically to go after them. We know that there's more opportunity there. From a snow perspective, getting younger customers, very important, and we believe we can do that. What is our approach?
Going after 86 million millennials or 60 million Latinos, there are other companies that have these great goals and don't really have a solid plan to get there. I'm confident because we have a very focused approach. We're going to start today with our existing diverse owners, and then we look at the diverse leads that we have that we aren't converting and why, and continue to work those. We're going to look at diverse people who already participate, maybe they don't own, maybe they own a competitive brand. There's share to be had there. There's also people who participated that don't own today and get them back in. We're going to look at people who look like those people and they aren't in today. We're not talking about going after 86 million people or 60 million people.
We're going after it in a very smart approach. How? We look at each business. We look at the quantitative data, we look at qualitative data, figure out the right customers that we should be going after, micro targets for each brand. We look at geographies, we come up with a solid plan. At the end of the day, we know how to do events. We know how to do advertising. We know how to do PR and social. We've done it for our brands. We haven't done it with these customers, that gives me a lot of confidence. This coming week, we're going to be at an event called the National Roundup in Gulfport, Mississippi. 25,000- 30,000 African American motorcycle riders. We've never been there. We're going to be there.
You look at something like the Latino Farmer Conference, RANGER needs to be there, and we will be. Then you look at messaging. Just having great brands doesn't mean it applies across the board. We need to understand the insights for the customers and how they think about the category and how they see themselves with their lifestyle, and we need to have messaging that matches that. You look at Polaris Adventures. This was created to bring in new customers to powersports, and they are delivering. You look at what their customer base looks like as opposed to our owner base. They're bringing in more multicultural consumers, younger consumers, more women, more families. This gives me a lot of confidence in our ability to grow in powersports, bring the customer base up. This is an enterprise-wide effort. This is about inclusivity.
If you think about it, this can't just be a marketing thing. This comes from product development, and when we do research, making sure the right people are included as part of that process, and I am seeing that happen across the company, and that is very exciting, and we know that that is going to matter. Many of you saw our new Polaris branding last night, and what makes me really excited about this is that it's highly relevant to a lot more people. If you think about it, the trends tell us that more people today are wanting to get outside and experience outside with friends and family. It's a very social activity for them, and they're looking to create these next-level experiences. I am highly confident that we are advantaged to deliver better than anybody else in this space. Any questions?
Any questions for Pam?
Yes.
Yeah. Jim.
Yeah. The question is on millennials. They love experiences, and they share. They do share assets, and we see that. What I will tell you is, I do believe our next-level experiences that we can deliver, that they can share with their family and friends, absolutely. Polaris Adventures is one way to do that. I think as a company, we are constantly looking at what are different models that we should be considering down the road, and I have a lot of confidence that over time, if anyone's going to be able to do it'll be Polaris.
Any other questions? Oh, hi.
Hi. Yeah. The question is, first of all, Gen Z is coming. What do we think about that, and what has been some of our surprises? I think as we entered into this, there was a lot of questions internally. Can we do this? Are we going to be believable and authentic as we go into the different communities? Because frankly, look at what powersports looks like to people, and is that going to turn people off? I think our approach has been very thoughtful. As we think about partnerships with Black Girls Ride magazine, that is a partnership we've had for three or four years already. We didn't just wake up today and start doing stuff without having experts help guide us, and partnerships.
When I think about relationships that we have with other events and have worked with them and had them teach us. Have us build authenticity, that's something we know we have to do. We can't just go bulldozing in and think we're going to show up and everybody's been waiting for us to be there. It's got to be natural. It's got to be organic. It's got to be authentic. Frankly, many of our employees are extremely excited to participate in these types of events. If anything, they've asked, "Is it okay if I show up, if I look like me?" I think what we found is a lot of receptivity. For Gen Z, yes, they are coming, they are even more digitally native, they even more want experiences.
I think you'll see with the Polaris Adventures numbers, the fact that we already have that slice of Gen Z that we don't see on other businesses, tells you people are bringing their families there. The people 22 and under are enjoying it, and I think we're going to see them come back. The business model like Polaris Adventures, I think will help enable that as well as others that may come in the future.
Okay. One more here. David? Yeah, David, go ahead.
Great question. How do we get the dealers engaged? I will tell you from talking to our dealer council members, there is a lot of excitement and support, and the biggest question is: how do we do this? What do we do? Actually yesterday we had two seminars at the dealer show talking about what dealers can do to help capitalize on this opportunity, and we got a lot of great feedback. This is going to be a journey. Frankly, across the base, I would say dealers are excited about the opportunity to bring more customers into their dealership, and if anything, are looking for Polaris to help them figure out what's the best way to do it.
Okay. Thanks, Pam.
Thank you.
All right. Up next is Steve Menneto, President of Motorcycles.
Thank you. Morning. I'm going to take you through, I'll say a grounded but very optimistic conversation. Grounded in the sense that we all know that we're challenged by the industries right now in motorcycles. This is North American chart over the last few years, and you see where the trends are going. We're very much aware of where they're going, all down around mid-single digits. Three wheels up a little bit. That's due to Ryker. When you look at our three-wheel business, Slingshot really doesn't interact very much with trikes and/or Ryker. It's a kind of really different product. We are understanding of where we're at, and we have great opportunity to gain share. As we continue to do that, we're excited about what we see.
We're still in the midst of rounding out our platforms. We'll talk about that when we get to the Indian section of this presentation. We're able to gain share. We're consistently seeing that we can make the products that consumers want. The brand has momentum. We're also seeing our brand move from more of just being a motorcycle manufacturer to a lifestyle brand. We'll talk about that as we get into the Indian side. We'll go down Slingshot first. Again, I said grounded. Why we're grounded is you got to step back. The one great thing about Polaris is we're a learning culture. Then we countermeasure like hell. Right. We launched Slingshot, saw all this excitement in the first year.
Early adopters jumped on the rig, and it was like, "Oh, this is going to be so cool." Then you started to see, quality wasn't really where we wanted it to be in our product. Right? Stick shift is a challenge in our product, right? When you think about the U.S. right now, people who drive stick, Edmunds says about 11% of people know how to drive stick. If you look at the automotives in 2018, 1% of the cars or the vehicles sold were stick. Okay? We launched a product with stick. Makes it kind of tough when you go through that way. Our brand, just because of the way we are built, it was all about performance. When you listen to your customers, they want fun. It wasn't about huge performance.
It was what this vehicle says about me and what I can do and have fun with it. When we look at that over the course of time, it's like, okay, launch the product. Now we got to self-correct. Right? That's what we'll talk about as we go through. We sat with 1,500 people and said, who came in and demoed a Slingshot but didn't buy. Why didn't you buy? The first thing was is price value. They're saying, "Listen, it's a cool rig, but it's not at the level of quality that I expect." The fit and finish wasn't there. It's not what I wanted to enjoy. Too many noises. We had a RAD issue, the rear angle drive issue, and noises and so forth. We have to go back and rework the unit. Second, not a lot of onboard storage.
Well, you know we have to stick under the 1,7 50-pound restriction for a motorcycle. We have to make sure every time we want to increase storage, we have to take weight out of the vehicle to open up storage. Okay. We're working through that. Last is, I'm not really shopping this against a trike or a Spyder. I'm shopping against other bigger items, okay. Boats, RVs, and so forth. I want an opportunity to try it before I buy it. Try it for a little bit more than a demo ride around the block. That's where Polaris Adventures, one of the most popularly rented vehicles in Polaris Adventures right now. It's really helping us get people to initiate into Slingshot. It's a really good opportunity for us to build that brand.
We know that we had a quality challenge and over the last five years, Mike Donoughe and the gang have been doing a great job of getting that stepped up every year. This latest edition that we'll launch, you'll see the video on, is going to be our best unit ever. We're really excited about where that quality's going to go. We'll look at this video right here. Got to click it again. We were able to show the dealers in a private showing last night, the Slingshot dealers, and they are ecstatic about the new vehicle and where it's going to bring their business. We just have to, like I said on stage last night, clean through some of the current inventory that's out in the field, and we'll do that.
We have enough inventory to get us through the balance of the year and so forth. We're ready to really take Slingshot to the next level with that. The challenge that we have, sitting with some of our best dealers is, even if it's a great product and you're not doing the right things in your dealership to retail the product, you're still not going to drive to the growth that you can have. Again, we sat with our best retailing dealers now and said, "What are the things that drive success?" It was real simple in five areas. We call them the Five Pillars, is you got to understand your customers.
As Pam said is our dealerships are really kind of banking on the same old powersports customer coming through the door when there's a lot of opportunity with new customers coming to Polaris and coming to Slingshot. We have to make sure we're doing that. When you show stock vehicles, it's just not exciting for the customer. These are folks who are look-at-me customers. They want to see all the bling. They want to see underglow. They want to see wraps. They want to see all the fun stuff, the customization on these vehicles. They want to demo it. Okay? It's not just a, "Hey, take a spin." It's an actual, "Let me take it out for about 30 minutes or so.
Let me get the understanding and enjoy it. We have one dealer in Florida who actually takes the person on a demo and then stops them midway of the ride right in front of a mirrored glass on a furniture store and takes pictures of them. He goes, "It is a closing gem." He goes, "They walk away with a big picture of themselves." They come back and they say, "This is for me." It's that kind of attitude and mentality that folks are looking at for Slingshot. We have to have ambassadors in the store who live and breathe this type of lifestyle. After that, it's access, it's finance. It's getting to use it through Polaris Adventures. It's all the different things that we can do to make sure Slingshot is spread around. I was reminiscing with Scott last night.
I was a DSM here in 1998 when we launched RANGER. You saw the pictures last night of that old RANGER. We could not get the dealers to take four RANGERs, just four RANGERs when we first started. They were just so opposed to it. I'm not saying this is going to be RANGER-level business. We're in that same mode. We've seen this before. We have to make sure we retrench and go after it with the right product, the right brand. We get after it with the dealers and helping them. We see this in spades. We have this dealer down in Alamo Powersports, Dave Sears. He came onto the business about a year ago. He's the new general manager of the store. They were only doing six units.
With the right steps, Dave's at 45 units this year with a personal goal at 60 of Slingshots retailed in one year. We see the proof points that Slingshot can work if we get it right with the right dealers executing the right plan. The last slide on Slingshot, this is what it looks like. It's not the stock units. We had an event in Huntsville, Alabama. About 250 Slingshot owners showed up, these are just mild showing of what they do to their rigs. It's so cool to see and so invigorating to see how much energy is around Slingshot and where it can go. We'll switch over to Indian, just briefly going through where Indian's at. We know that the industry is challenged. We understand that. We also understand what the demographics about the industry are.
We understand there's huge opportunities for Indian as a lifestyle brand and a motorcycle group. We're excited about where we're going. Over the last six years, you can see our growth, both North America and internationally. If you see, we built from one platform to four. We're still in that mode of filling out and rounding out bikes into segments that we can still play in. That's where we see our growth, and then where we see our growth is acquiring more customers via through gaining share, but also, as Pam spoke, acquiring more customers that are going to come into the Indian brand that are non-white. We have a lot of opportunities when we go forward with that. Really, where we focus, where we can win is how we take care of our customers.
We've gotten the data back, like I said, is we're at a 75 right now in terms of Net Promoter Score. This is huge on what we want to go after in terms of our customer obsession strategy is making sure not only did you buy an Indian, but you feel that we have a loyal customer, but you feel an organization that supports you at every step of the way, if it's through the prospecting phase and when you buy in a dealership, and then after you own. That's what we make sure we're doing it all the time. We want to build a lifestyle brand, and you notice through this picture here, it's a lot of different things to capture a lot of different people. It's not the same old, same old. We still go to Sturgis.
We still go to Daytona Bike Week. We'll continue to do that. That's kind of ante for poker here in motorcycles. Evel Live and the Artist Series, and we have Indian Motorcycle on tour, and all the different hooligan things that we do and different personalities is a way to continue to build that lifestyle brand around Indian. We do this, and it resonates around the world, and we continue to be more innovative in this area. We're not always the same old, just going to the motorcycle shows and just trying to peddle motorcycles. It's about communicating a lifestyle for Indian with our consumers and prospects. You see racing. Racing is fun in Polaris' culture. We love to win. As Scott said, we're extremely competitive, ridiculously competitive.
When we got into racing, it was cool to get that, but it was a way to promote our brand around the globe, and you could see the actual benefits beyond winning is where we get our impressions and what it's done for our brand globally. Hooligan racing and flat track racing has taken off overseas, and it's really helped us in that sense, and you get great personalities into the brand. Again, it makes it closer to the consumer, closer to folks who can enjoy Indian. We talked about lifestyle brand. Actually, last week was the grand opening of our Lynchburg store. So we partnered with Jack Daniel's to open up a store around our Bottles and Throttles Don't Mix. It's just a non-motorcycle store that sells apparel and all the different things.
Jack Daniel's on their distillery gets about 500,000 people a year, of which 30% are motorcycle riders because it's on a ride route. Those are the kind of things that we'll do to attract more people into our brand. Of course, you saw last night that we were going to celebrate Scout, the 100th anniversary of one of the most iconic bikes. It's going to be so cool if you saw it last night. The pictures don't do this justice, but it's just another way to continue the Scout platform. It's another way where Scout's attracting new riders to our brand and to the industry. We're excited about where we're going to take Scout, and there's a lot more to come in the mid-size bike, as you see with FTR and Scouts as we go forward.
Furthering that is we have to make Scout a wider opportunity for customers. You see some of the touring accessories. This has been an ask by a lot of our consumers is, "I love my Scout. It's powerful enough. It's big enough for me, but there's not enough bags. There's not a fairing," and so forth. Listening to our customers, turning that into product opportunities where dealers can make more money, and we can satisfy more customers. We got about 400 dealers around the globe. This is going to be a big push for us over the next five years. We want to do this smartly to make sure that every same-store sales are still profitable and growing. We want to make sure is that we're adding dealers, particularly in ride routes where we have a service.
We have to make sure that they have a lot of confidence in us in terms of the service infrastructure as they go out and ride. A lot of opportunities here in the U.S. as well as outside to grow in our dealer count. Slingshot, we're about 375. We think we need to be around 300 - 325 of the right dealers pushing that, selling that brand. We'll be working with our dealers through that. We think we're good on Slingshot, a lot more growth in Indian around the globe. Ken mentioned earlier, in motorcycles, we manufacture in basically three places, Spirit Lake, Opole, and Huntsville. I got asked last night by one of the analysts, we want to make sure we're clear, is we're only building motorcycles for Europe in Europe. We're not repatriating bikes back to the U.S.
That's a point of clarity that we got to make sure we have. Great facilities. The teams are doing great. High quality coming out of the plants, very safe, and a lot of opportunities for us to help us on our overall profitability. Last slide, talking about profitability. We are really aggressively driving after profitability in all these different areas, and one of the areas I want to just pull out and talk about is design to value. It's a new capability that Mike Donoughe and the team are working on with us, and it's really driven off of making sure you get the customer insights right, the pricing insights, all the different design insights and so forth to make sure you have the right plan and design before you go into making bikes.
Making sure on the other end, when you have the bikes, that you've created enough value, right? It's simple, but there's a process to do this well, and that's what we're following here as we develop our new bikes and making sure in the future that we're growing the business very profitably.
Okay. Thanks, Steve. Question? Craig.
Sure. The question is, we saw about $150 million from Harley in promo over the last trailing 12 months. How is it impacting us, and is this the new normal? We hope it's not the new normal. This was really outside as they were continuing to say, "Hey, we don't promo." They've always done that in their finance side of the house. We saw August 1st last year, they kicked into a different gear on promo where it was actually rebate dollars directly to consumers and then dealer cash. What's nice to say is that we gained share all through that period. It's a challenge for us. We're not going to play in that game. It doesn't do us any good to be in that business. We'll do the right things, and we see the values of trade-ins and so forth.
Why you see us introduce, we always have these trade-in cash for the consumers because it's about working through their deal, to get them out of their old bike into the new bike. We do that. We do reasonable financing. We won't go chasing Tier 4 and Tier 5s as they're doing right now. We're going to continue to play our game, and we think our brand is strong enough, and we think our products are compelling enough to overcome it. Yeah. We've done studies. We can handle about $1,500 to $2,000 premium to Harley-Davidson, and we're fine with volume. Once it starts exceeding that, then that's where we see some challenges. We saw through the period in our mid-size bikes, they got really wild here in Sportsters. Again, we decided not to chase it. We think the Scout's strong enough to fight that off.
Okay, Tim.
The question is, you see us moving more to a mid-size bike segment. How are you going to contract and grow in that space? How it's pretty tough competitive fight. It is a tough competitive fight. I think there's three things that we can do, and we can do really well, is, first off, it's American brand. When we play the American brand, with authenticity, which we can do in Indian, around the globe, it really works. That's why you see it over in Europe when we go to EICMA and so forth. It works in spades. They want American products. Number two is you have to have great bikes. I think when you look at Scout and FTR, they are phenomenal bikes. We have to make sure that we have those bikes. It's really about financing.
It's not about dollars off. It's can they have access to financing, get them in. Then third is lifestyle. It is crystal clear to us with those customers coming in that mid-size segment and FTR and so forth, if you're not really concentrating on how they use the vehicles and where they want to use them, and what you can do in terms of accessories, apparel, who you associate with, what events you're going to. We crush it in Wheels and Waves, which is in Biarritz, France. The reason why we do is because we're the first American brand in there, and we're supporting that. We have the playbook on how we're going to go after these customers, and we're really confident we can do it. Think about it. We're just getting there. I mean, FTR just came out. Scout came out about three years ago, right?
I mean, we're new to it yet, and we're still making great strides.
Okay. Jamie.
Possible.
[inaudible]
I'm not sure. The question was if we have the transmission right, and then how big is the market for Slingshot? We don't have a big number like we're going to see this grow into thousands or hundreds of thousands of people wanting to buy Slingshot like we did with RANGER. I think we have to go really learn about it. I think there's a great opportunity when you look at a corollary to motorcycles and so forth. We could see ourselves being highly successful if we're in the mid-teens on these types of bikes, or on Slingshots if we were just solely selling them. I think we got to think about Slingshot in a different way, is that when we go through rentals and we go through usage in Slingshot, and then it circles back to purchase.
What we're seeing a lot of right now with our dealers who are in rentals, I think that's the opportunity that we have to get our heads around yet, that we see if we're at 10,000-15,000 units with that type of a business model, we'll be highly successful with Slingshot. This isn't a quarter of a million units RANGER business. We're really clear on that. We're very grounded on that. It is a fun opportunity that extends our brand, that has some opportunities through both a different ownership model and then buying.
Okay, we have one more. Gary, we will take.
Conceptually, how are you thinking about electric?
Conceptually, how are we thinking about electric? There are two ways. I think it's still a slow burn. We're going to be a fast follower in electric. I think there's a long time before motorcycles get to electric at the price that people are willing to pay for, and that we can make money at. The second piece is that part of being in the greater Polaris business is other parts of our business are working on electric, so our ability to fast follow is really fast because ORV is developing it, CGD may be developing it, and so forth. We think we're positioned well, but as we're growing Indian, we still have a lot of focus on growing out in other segments before we have to worry about getting to electric.
We know with confidence in the back our brother and sister divisions are already working on it that will help us get there fast.
Okay. Thanks, Steve.
Thanks.
All right. Up next is Mike Dougherty, President of International.
Thanks, Steve. All right. Happy to share with you what we're doing around the world over the next 15 minutes. The international business, it's a pretty reasonable part of our overall business. It's about $800 million, we just topped $800 million last year. We started getting serious about international about 20 years ago, when we established our first-ever subsidiary. That's our own people overseas doing business with local dealers. Since that time, we've opened up 14 other subsidiaries around the world, and that's where we see the most growth, where we decide that we're going to invest in the business and invest in the dealer network and invest in our services, and that's really where we grow the fastest. Now we have over 3,000 employees outside the United States, including our factories.
We have six manufacturing locations, two different research and development facilities, over 1,400 dealers outside North America, and we do business in over 120 different countries. Last year, we also tipped over the 60,000 units shipped overseas, so significant business. It's a little bit different mix than what we see in North America. Less than half of our business is actually off-road vehicles. We have a large Global Adjacent Market business, primarily in Europe. Motorcycles make up a higher percentage of our overall business overseas than it does in North America. We've been growing the last few years. A couple of years ago, we were about $650 million. Now we're up over $800 million. We expect to grow again this year. We're up about 5%. We have a little bit of headwind right now with currency. In constant currency, it's up about 11%.
You can see the large part of our business is in Europe, Middle East, and Africa. We call it EMEA. I'll stand over here. Asia Pacific's a growing part of our business, and Latin America is still the smallest, but again, a growing part of our overall business. I'll go through the various regions now. Europe, Middle East, and Africa, again, our biggest region, and also our fastest-growing region, which is nice. We have strong fundamentals. We're direct in most markets throughout Europe, direct with our own subsidiaries. We have a headquarters over there. The motorcycle group last year launched the FTR 1200 primarily for the European market, and that's really helped us out this year in growing our overall revenue and our motorcycle revenue. Indian's up 38% year to date in Europe.
While the motorcycle market is experiencing some downtimes in Europe right now, we're actually up and gaining quite a bit of share. Actually, in June, we sold more motorcycles in Europe than we did ORV for the very first time ever. We expect that trend to continue over time. We've got a lot of runway for the overall business in Europe for motorcycles. ORV pays the bills for us. It's still our largest business. We have a leadership position, but there are challenges with our ORV business, primarily from Asians coming into the market selling lower-priced stuff. We don't chase that too often. We try to focus on the higher profit margins in the side-by-side business. Snow has been a good story for us. We've had good snow in Scandinavia and Russia the last couple of years. We've been gaining share.
The snowmobile group has given us more relevant products for the Scandinavian customers. We're seeing nice growth in that business. The transformation of our motorcycle business to become more global, focused on Europe, now we're building bikes in Poland, as Steve mentioned, is really going to transform our overall business, primarily in Europe. Latin America is a good market for us. Mexico has been a huge success story over the last five years. It's actually our most profitable market, and one of our fastest-growing. RZR's the key product for us in Latin America. With the new model year 20 announcement that Musso showed last night, we're super excited about what we can do in Latin America, in particular Mexico. Brazil, the revenue's down just a little bit, but the profit's up in Latin America.
We found Brazil to be really just too difficult to do business in for our motorcycle business. Last year, we exited the Indian business in Brazil. Maybe the regulations are a little bit easier, but the taxes are just so high on the bikes there. If you don't build motorcycles in Brazil, you just really can't compete, and we just don't have the scale yet to do that. Maybe sometime in the future we can go back into it, but we're focused on our off-road vehicle business, primarily throughout Latin America. Asia-Pacific. We're gaining scale in Asia-Pacific. For a long time, our primary business was in Australia and New Zealand. It was our largest overall subsidiary, our first subsidiary. It has the largest off-road vehicle market outside of Europe. It's also a pretty significant motorcycle market. Really, the last couple of years have been very challenging.
Economically, Australia's challenged, FX it's challenged, and the weather's been very difficult. Both the ORV business and the motorcycle business, the overall markets are down double digits. This is about the third year that it's been down double digits. We've been growing our share, but it's hard to grow the business when the market's down so much. Fortunately, we've planted some seeds throughout the region, and China's really starting to come to life for us. We launched motorcycles, I think, three years ago in China, but just heavyweights last year. What we're seeing now is China's the fastest-growing market for us. It's actually our most profitable market for us for motorcycles. Despite the tariffs and the challenges we have with trade with China, people love Indian motorcycles in China. They love the premium bikes. They're delivering us great quality, and we're seeing great results.
Excited about the future for motorcycling with Indian Motorcycle in China. As Scott mentioned last night, we're setting up our new subsidiary in Japan, and that's going to be opened in the fourth quarter of this year. Japan's the third-largest motorcycle market for our types of bikes in the world, and we just really underperformed there with the distributor. We're going to go set up our own subsidiary, expand the dealer network, and bring great Indian products to market. We expect to see significant growth in Japan over the coming years. We have a joint venture in Vietnam, actually, in Hanoi, that we set up a couple of years ago. That could be an opportunity for us in the future to really unlock some potential for the Southeast Asian market. Our long-range plan is to help build the powersports.
We partner with the business units. We try to enable their growth. RANGER is a critical business for us, the most consistent, the best profit. We think that has a lot of runway for us overseas. Continue to win in snow. Globalize the Indian brand and really drive PG&A penetration. That's where all the money's made. We're going to pursue new markets. The company is very dynamic. We're doing a lot of different things. We have to make those things more global, and enable the growth for our smaller business units and the ones that are growing fast. We have an infrastructure now in most of the key markets outside North America, and we help these guys build the capabilities over the time. We're focused on profitable growth.
We've exited some of our less profitable areas, less profitable initiatives, and focusing on building the premium brands like RZR and Indian, leveraging our operations and doing a shared services model where we can and leverage our infrastructure. That's it. $1 billion, I should say that. Right now, the plan is to get it in 2022, but we're hoping to maybe pull that forward one year if things go our way.
Okay. Any questions for Mike? International? Oh, there's one.
All right.
[inaudible]
Last year we did just over 60,000 units.
Okay. Good. Thanks, Mike.
Thank you.
Next up, Steve Eastman, PG&A. There you are.
Yes, sir.
Good morning. I'm going to focus primarily on the powersports aspect of the PG&A and aftermarket business, and then Craig Scanlon will get up after my presentation to talk about Transamerican Auto Parts in particular. I'll hit a couple of slides that just illustrate how we think about the full portfolio. Just to start things off, we're in a really good place right now. The PG&A aftermarket business has a lot of momentum, particularly in the powersports piece. Broad growth in PG&A dollar per unit penetration, that's the take rate. We pay a lot of attention to how we're performing there as whole goods units ebb and flow in the mix changes to ensure that we're gaining market share. We have a significant portfolio second half new product introductions, and hopefully you got a chance to see some of that on the floor last night.
It was highlighted in a few of the presentations. When we accessorize these vehicles, we really show consumers all the different ways that they can use them, and we also address different segments. We're really proud of the second half launches that we have. We're making big strategic customer-focused investments in distribution and digital. You probably heard about the multi-brand distribution center we just opened in Fernley, Nevada. I've got a slide on that in a little bit. We're also making big investments in digital to connect our customer experience across our digital platforms, but also to enable e-commerce. We know consumers, particularly in aftermarket, if they don't attach accessories during that initial purchase with their vehicle, often don't return to the dealer. We need to make sure we have the channel and the tools for those consumers to buy online.
We're leveraging our portfolio and our scale to extend our competitive advantage. We have unique advantages over really all of our other competitors, and that's what this slide highlights. The mix of OEM PG&A product lines and the things that we learn from those product lines and our aftermarket brand portfolio is unique in our industry. The access that we have to channels, obviously our Polaris dealers and our e-com channel, but also other OEM dealers, business that we do for other OEM competitors in some cases, and access to warehouse distributors and traditional big box retailer gives us a unique competitive advantage. What does that look like? Over the last eight years, we've seen a 22% compounded annual growth rate in the business. We're approaching a $2 billion PG&A and aftermarket business now over the next few years. The portfolio's diversified.
It's about half aftermarket and half OEM. We've accumulated a tremendous amount of learning through the integration of the brands across the calendar at the bottom. We're using that learning to get better and better as we think about other organic and inorganic growth opportunities in the future. How's the first half going? I mentioned momentum. You can see on this slide that we're seeing strong performance virtually across every aspect of our product mix. Accessories is leading the way. It's largely an accessory ORV and U.S. story, but we have tremendous opportunities to grow across the globe and across all of our businesses, and we're seeing that momentum today. As we look forward, the way we think about the business, the strategy that we're deploying is a flywheel model, right?
We've got to make sure that we're thinking about every aspect of our business to ensure a great customer experience and that we gain market share in the process. We look at brands, product leadership. We look at all the different customer access and service mechanisms we have. Obviously on the back end, we need to make sure, particularly in parts, that we can service our dealers and our customers exceptionally well to keep our customers riding. These are important to the overall brand perception for all of our whole goods brands as well. On brands and product leadership, we have over 275 new accessories that we're launching essentially now at the dealer show. We also have a lot of momentum in our apparel business. On one of the earlier slides, I highlighted that our apparel business is running up 20%.
We're really proud of that, and this is largely about unique product innovation. We're using a lot of customer insights to get better. We're doing all of that in concert with our partners in whole goods, and we have the highest level of integration in our vehicles that we've ever had, which makes it easier for our customers and our dealers to attach and remove accessories in ways that are unique for Polaris. On the aftermarket side, Pro Armor, Kolpin, Premier OEM, 509, Trail Tech, and KLIM are big powersports aftermarket brands, and there's some pretty exciting things that we're doing here to leverage these brands. For example, the Trail Tech gauge here called the Voyager Pro includes a RIDE COMMAND group ride feature.
It's compatible with RIDE COMMAND, which makes it possible for our riders, our owners who ride Polaris vehicles and have a RIDE COMMAND device, to connect with their friends and families who may not be riding a Polaris vehicle and participate in their group ride. On the Pro Armor side, with the launch of the new Pro XP yesterday, we also launched a whole line of Pro Armor accessories on the same day. The aftermarket's going to take some time to catch up to us in that regard. On customer access and service, I should have probably changed the order of these from left to right. Perhaps the most important part is what we're doing online. Consumers increasingly are going online to get information to research and buy.
The configurator, which we've built up over the last couple of years, generates about 50% more dollar per unit interest when they build a vehicle online. That translates through our leads. When customers go into the retail stores, we need to make sure that the stores are stocked, that our dealers are stocked, and we work very closely with our sales teams on the mechanisms to do that, including merchandising and packaging. On the left-hand side of this slide on marketing, it's really important that we get catalogs in front of our consumers. They're very inspirational. They show consumers what's possible, and they're organized in such a way that helps them make the right fitment decisions for their vehicles. What we're doing, in addition to giving these out in the dealers, when a customer registers a vehicle, we mail the catalog to their home immediately after.
We find that that drives a significant amount of traffic back to the website and back to the dealers. On back-end efficiency and scale, we leverage category management. It's not a new model. It's not unique to us. What we do with this is we invest heavily on the insights and analytics side to gain an edge, to gain insights into what consumers are looking for and to make sure that we have those solutions built into our product pipeline. Product lifecycle management allows us to execute at a very high level. Of course, as Ken talks about, we leverage VIP and Lean to constantly find ways to build new margin opportunity into the portfolio. On back-end efficiency and scale, the other big piece is our distribution network. We now have, inclusive of the TAP distribution, about 1.7 million sq ft of distribution.
More importantly, we're getting closer to the customer. Opening up the new distribution center in Fernley, Nevada, was a really important step in that regard. It's a big bet. We went live on July 15th. We started shipping our first orders. It's going very well. This allows us to service our Southwest and West dealers much faster than we've been able to in the past out of our Vermillion distribution center in South Dakota. We'll have probably close to 25,000, 30,000 part numbers in that distribution center by November. Importantly, it's the first distribution center that does two things for us. One is it's multi-brand. We built this distribution center. We built the infrastructure to support any one of our brands. Instead of having unique distribution centers, this facility will be able to support all the brands as we cross-pollinate across platforms.
We've also invested in goods-to-person automation to improve productivity and efficiency. I'm going to wrap up with just a video that highlights a little bit of an inside look at the MDC in Fernley, Nevada. Lots of room for growth around the desert outside of Fernley. That's it for PG&A aftermarket. Like I said, Craig will get up and talk about Transamerican Auto Parts, but I'm happy to take any questions that you have in the meantime.
Okay, James.
Yeah, the question is, do we see an acceleration, and I think both vehicles and PG&A, when we introduce new accessories. Is that fair to say, or are you referring to the introduction of new vehicles?
Both.
Both. Yeah. The compounding effect of that's pretty powerful, yeah. Where we've seen the biggest lift is when we achieve new levels, breakthrough levels of integration. Probably the biggest lift we've seen over the last couple of years is in the area of cab systems, when we integrated cab systems and the roll cage of the vehicle to accept cab systems more readily. We're also doing that. You probably heard yesterday about the Pulse electrical system as we introduce more electrical components, audio components, and so forth. It's really become plug-and-play, and that's a unique proprietary thing for us. Winches. Vehicles are now designed to be winch-ready, plow-ready. In general, when we achieve that level of integration, it's very hard for the aftermarket to match that, and we see a much higher take rate. Yeah.
The impact on margins is pretty constant, I would say, on gross profit in particular. Obviously, we have a lot higher operating costs. That 50/50 includes the Transamerican Auto Parts business where we're operating a mix of retail stores and so forth. Our operating costs are a bit higher there than it is on the OEM side. We see the mix probably maintaining. It's at least organically maintaining what you see today, largely. No reason to believe that all aspects of that business shouldn't grow commensurately. Can you repeat the question? Well, in general, in the PG&A business, all of our customers are really quite profitable on the parts side and so forth. What we're seeing is a shifting dynamic of accessories versus parts.
The business used to be weighted much more to service parts. We're actively trying to drive that where it makes sense to do so. The accessory business is where we see the biggest opportunity for growth. When we connect with riders, really enthusiast riders who love our products, love our aftermarket brands, we see a tremendous amount of loyalty. We stay with them through their journey. We continue to market to them. We continue to go back to the installed base and showcase new products, new product introductions. We'll invest quite a bit more going forward and going back to that installed base to make sure that we've got product news on the accessory side. As we do that, we don't see a lot of competition, frankly, in the aftermarket outside of what we own.
It allows us to capture higher margins and hold retail.
Okay, any other? Yeah, Laura.
Right. Yeah, we are. We'll learn. We're working with Dematic, in particular, in this facility. In all of our facilities, we've invested quite a bit more in automation, conveyor systems, material handling to gain efficiency and productivity where we can, and obviously, we look at our Lean processes. This is new for us. The multi-shuttle It's called a Dematic multi-shuttle, allows us robotically to go and retrieve smaller parts and bring those to the operator. It's been up and running for two weeks. We're learning a lot. It's going well. We'll measure the productivity and the effect ultimately on the customer experience. If we can service our dealers faster because we're more productive, more accurate, more efficient in the distribution centers, that is something we would go and look at retrofitting. Okay, thank you.
Okay, good. Thanks, Steve. Next up, Craig Scanlon, President of Transamerican Auto Parts.
I think I need that clicker, Steve. Well, good morning. I'm waiting for the clicker. I clearly need to update my photo to be more of a aftermarket auto versus a off-road kind of guy here. First what I'm going to do is I'm going to take you a little bit through what the company is, what our competitive landscape is, and then kind of how we go to market and what the future will hold for Transamerican Auto Parts. The company was founded in 1961, just under 2,000 employees, 95 retail locations. That's up three from just a couple of months ago. Eight proprietary brands, six distribution centers, and then we have one manufacturing and one engineering facility. When I took over about 14 months ago, we had two manufacturing facilities.
We recently consolidated for efficiency. We'll talk a little bit about that in the future here. 100,000 SKUs that we sell. We carry 700,000, but 100,000 are the most important one, about 95% of our business. We're the only vertically integrated multi-channel truck and Jeep aftermarket retailer. We did about $783 million in sales last year, and that's about 65% 4 Wheel Parts and the rest is in our Transamerican Auto Parts, our wholesale business. What do we want to be when we grow up? We want to be the industry leader in Jeep and truck accessories. How do we want to do that? We want to do that from our industry-leading go-to-market, whether that be in our retail go-to-market or our wholesale go-to-market. We want to do that through our proprietary brands as well as our third-party brands that we offer.
To give you a little bit of an idea, about 33% of our sales are through our own proprietary brands. The rest are through third-party brands that we sell. One of the big changes we've made over the last 14 months is, if you look at the retail side, 14 months ago, that was run by three different leaders. The retail stores were run by one leader, the e-com was run by one leader, and our DSI, which is our dealer services business, was run by a different leader. Each one of those leaders were fighting for the same sales.
Now we have one integrated team that looks at it from a customer approach as to, I don't care if I buy from 4 Wheel Parts, whether it be online, in your store, or I buy online and I pick it up in your store, or I go to your store and buy it and you install it for me. The customer doesn't care. We had to have one leader looking at the customer and not looking at kind of the infighting of sales there. Same approach with wholesale. We have one leader over top of all wholesale. A big thing here is we're kind of moving from the approach of we'll sell to anybody, to now we're selling to people who have an investment in wholesale and are selling to a retail customer. That's more profitable for us. In the past, any sale was kind of a good sale.
We have a competitive landscape, and you'll see from this presentation maybe versus different presentations, we have select competitors as well as partners, because as you go down through this list, there's a lot of people on this list that are both competitors but also partners. If you look at just the brands piece, most of the people in that brands piece, we are their largest retailer in North America. ARB, Warn, Fox, BFG. We don't look at them as competitors, but yes, we also make brands that compete with them. That's one thing that's different from our business and makes it a little bit more complex. When you go in down into the wholesale piece, once again, we sell to Keystone, we sell to Premier, we sell to Meyer, but they also sell to our brick-and-mortar customers.
As we manage through some of the things in the future, those are things to contemplate, that are a little bit more complex than maybe just the, if I was Ford, I'm competing with Chevy. One of the big things we had to do over the last 14 months and why I feel so good about the opportunity for growth is we've established the foundation. We're not sitting here today going, "Okay, this is what we need to go do." We went and did it 14 months ago, and now we're going to be able to reap the benefits of it. The first thing we had to do was develop a vision and strategy for the company, and it seems very simple. Well, it wasn't. There was about 15 different fighting initiatives going on. We kind of boiled it down to three big things.
One, we have to grow 4 Wheel Parts. 4 Wheel Parts is the one thing that we offer to customers that nobody in the world offers. We have a national chain of stores that allows you to either buy in store and take it home and do it yourself, buy online, pick it up in store, and do it yourself. Buy online, pick it up, come to the store and we'll install it for you. You can do so many different things through our 4 Wheel Parts channel. It's one of the things we're most proud of and a great opportunity for us. The second thing we need to do is expand our product portfolio. When you start to look at what we do at 4 Wheel Parts and what we do at the company is a lot of it is really gauged towards the Southwest.
That's where our original stores were, and that's where we're most comfortable. We need to expand that. When we open stores in Minnesota or Maryland or Pennsylvania or Maine, we have to have products that are tailored to those customers. It seems pretty simple, but 14 months ago, we didn't. Now we're getting closer and closer to that, but we still have a ton of opportunity there. The last piece is we need to strengthen our brands. In most cases, our brands have been the case where it's a me too, right? It's, we'll give you the best deal. Instead of saying, "We build the best winch in the market, let's go market it and sell it as a premium winch." That's the three big things we're focusing on as a company.
Once we established that, we had to align the organization. We did a restructuring. We have a lot of new leaders over the last 14 months that are in place now and operating at a high level. We needed to consolidate 4 Wheel Parts, like I said before. We had also consolidated our B2B business under one leader, so we didn't have multiple people trying to compete for the same wholesale customer. We created a category management structure. In the past it was brands. The Pro Comp brand would be competing with the Smittybilt brand instead of saying, "Okay, Smittybilt's going to be our winch brand, Pro Comp's going to be our suspension brand." Instead of having competing products and them trying to sell to the same customer, but basically the same products with a different badge on it.
Next thing we need to do is we need to centralize marketing. Before, all six of those channels had their own marketing teams, likely not the most efficient way we could do it. We created one centralized marketing team that is creating messaging across the whole entire company and is now a place where the brands can go, the stores can go to one integrated group that creates an efficient and also streamlined marketing approach. We streamlined marketing, like I told you before. We had two manufacturing facilities. We took the two manufacturing facilities, moved them into one manufacturing facility, and then upgraded that manufacturing facility's capabilities through some additional tools for them to use. Last, we needed to eliminate waste in engineering. What would happen a lot is they would start projects.
They didn't have a PDP process like we have at Polaris. We just created some process in place and didn't keep the engineering teams moving in different directions all the time and said, "This is where we're going," and allowed the engineers to do what they do best. The next, obviously, we had to strengthen the process and capabilities once we did all that. We did that. The end all be all is we had to shift the culture. In the past, the culture was focused on sales at all costs. Now we're focused on sales, but let's do it profitably and let's grow the company. We took a step back when we first took over 14 months ago, and now we're able to actually say, "Okay, let's get this thing moving forward in a really positive direction." 4 Wheel Parts growth.
That's a massive undertaking for us and it is a huge opportunity. We did it through two different things here. We have to transform the operating model, and then we also have to drive continuous improvement. I'm not going to go through each one of these things on the screen, but we can look at just establish go-to-market planning. A year ago, we'd be sitting there in the middle of July and saying, "What are we doing this weekend on retail promotions?" Two weeks ago, I was looking at August already. In a month from now, I'm going to be looking at November. That's how much better we're getting at it. That seems very simple and like why weren't they doing that before?
The beauty of it is now you have the store folks who have to execute these programs, working with the promotions teams, and now working with the marketing teams. Everybody's working together and coming up with integrated approaches, and now we're going to launch a new program in August, and the marketing team will already have all the training and all the materials in place to go and put that out in the marketplace for our customers. Then the store folks will already have training in place on August 1st to understand what they have to offer to their customers. Seems simple, but we weren't doing it before. We're doing it now. The second piece is driving continuous improvement.
I'm not going to go through all four of those boxes either. One of the big things we were doing in the past was if we had a store in California and you went to the store in California, it looked exactly like the store here in Brooklyn Park, Minnesota. I've lived in both places. I can guarantee you that the folks in Southern California aren't doing the same things to their Jeeps and trucks as the folks in Minnesota. Along with that is the dynamic stocking and merchandising. Really cool name for if you sell a lot of this, make sure you have a lot of this. If you don't sell a lot of this, make sure you don't have a lot of it. The traffic and store hours. We didn't do door swings. We didn't know when people came to the stores.
We added that about six months ago. We now know when people go in our stores. They go in early in the morning, they go in at lunch, and they go in at night. If you had the stores open on a Sunday, they'd probably go in then too, because we're a retailer. We've been testing out extended store hours. We've been testing out Sunday hours, we're also testing out how can we be more efficient with our staffs in the store because our staff in the store is a high expense. How can we be more efficient with the people we have? We're finding a lot of ways to make the stores operate at a more efficient and better fashion to grow retail, but also be more efficient at the same time.
From our wholesale piece, I will tell you, this is the area over the last 14 months that we've actually been kind of bringing it back down a little bit so that we can grow it the right way. If you look at the mix between where we are today and where we're going, it's quite different. Today we sell through our brick-and-mortar stores. There's 10,000 brick-and-mortar customers across the whole entire company, 1,300 of them matter. 1,300 independent stores that have established businesses and have an infrastructure in place. The wholesale distributors are of the folks that we sell to that then sell to a brick-and-mortar store. We sell to somebody, and then we compete with them to sell to a brick-and-mortar store. National accounts is a place where we really don't play today.
National accounts, I won't go in any names, but they're large retail chains that probably can sell a lot of our proprietary brands that we don't sell to today. As you look in the future, the big focus is going to be on the brick-and-mortar stores and servicing them in the right ways. The second piece is growing our national accounts. There's a whole lot of bullet points there in the bottom, but we're going to do a lot of it through our evolving the sales process and enhancing what we do to be a better wholesaler to these folks, as well as making sure we actually don't just open doors every day and have a phone ready, but have people calling on them to provide the services that they need. From a marketing approach, two things we got to do.
We have to drive the lifestyle and build the brands and make people excited about 4 Wheel Parts as well as our brands. Second, we're a retailer, we have to be able to drive traffic to our stores. A whole bunch of things on there. One thing we have to do is know the customer. Reach new enthusiasts, develop dominant influencer teams, and expand the social presence. One of the big things we've done here is 4 Wheel Parts Studios. We created our own studio group with our own filmers and our own producers and all that good stuff. As a retailer, we have to be able to move very quickly. As a chain that has 100,000 SKUs, it's not like Polaris, where we can spend six months and film videos on a new machine. We have to be able to turn real fast and get new content up online.
That allows us to do that. From the retail standpoint, like I said, we have to have the go-to-market materials in place and ready to go at the store, so when somebody sees something online or on TV, when they walk in the stores, it says the same exact thing. One example of this, just real quickly, of one of those 16 boxes on that page, is what we've done from just a social following. We've very quickly created a 4 Wheel Parts official team. We've grown our impressions by 221%, and we've grown our followers online by 21%. Doesn't seem like a big deal, but this is a massively efficient way to market. It's just one of the few things that we've done, and that we're very proud of. Wrapping it up, what does the long-term success for Transamerican Auto Parts and 4 Wheel Parts look like?
We have to focus on the customer. We got to generate revenue and profits, and we have to drive rigorous execution. What does that look like? That's 4 Wheel Parts growth, new product development and brand clarity on our products. Excuse me, didn't mean to hit that. Category management aligns us to the customer. Then we have to grow our B2B channel through, like we said, through our brick and mortar, and also being a better wholesaler. The next one is really important. We have to actually focus on the customer through data and research and being customer-centric. In the past, the company had a lot of people that have been here for a long time, and it was great, but they relied on their guts too much. What we've said now is one of our mantras at the company is brains and guts.
Have a gut instinct on something, but back it up with data, so we don't fail as much. Organizational capabilities to drive engagement. What the second half looks like, we're going to have accelerated growth. We have to overcome some tariffs, which we've done in the first half, we have to grow our 4 Wheel Parts business while growing our DSI expansion. Rapid e-commerce growth, which we've had in the first half and especially here in the third quarter already. We have to manage out our wholesale disruptors while expanding our brick and mortar in our distribution, around our distribution centers, excuse me. We have to leverage investments, optimization, and cost down and outsourcing to make sure as we're growing all this stuff, we're doing it in a profitable way. That's the presentation.
If anybody has any questions, we'll open it up right now.
Yep. Thanks, Craig. Any questions? Craig?
Craig, you've run several Polaris businesses in the past. What would you say this brings to Polaris specifically?
I would tell you the beauty of this business is everything we do here is incremental, would be one thing. I also think the beauty of the business is that it's not the fact that it has a huge addressable market. It's not the fact that it has all these great brands that we haven't really built out yet. It's not the fact that it has the stores. It's the ability to develop our products or third-party products, and then go strictly to retail and control the whole process. If you think about what we've done at Polaris through the years, we have dealers, right? We could do a whole bunch of great stuff here, and then we rely on the dealers, and vice versa, dealers rely on us.
Here, if we do something great, it's so easy to go straight through the retail channel, and so fast, and so that piece. I also think it's a marketplace where what we've done at Polaris through the years, and what they've done through the years, by mixing those two cultures together and getting some great people from Polaris and getting some great people from TAP, we have a lot to learn from each other, and we can accelerate this and become a very tough competitor in the marketplace.
Yeah, Joe.
I have a couple questions. Are you ready for Jeep in terms of being better aligned with Jeep and the Gladiator?
No. That's one of the misnomers in the company is if you look at the total marketplace, Jeep is about 7% of the total marketplace. We spend a lot of time focusing on Jeep, and for the company, it's about 20-some % of the company. I would say we were behind the curve on the JL. We are back up on the curve. We have everything you would need for a JL, whether it be our own products or a third party. I think in answer to your question about the Gladiator, yes, we are ready to go on the Gladiator. We had one of the first Gladiators hit the ground in the country. We actually flew some folks over to the East Coast, picked up the first Gladiator, and drove it straight through the night back and started building products for it.
I would say from a standpoint of the company, Jeep is important, but we've also kind of gone too far with Jeep. If you look at the addressable market, mid-size truck is far bigger than Jeep. We're adding a lot of new products and brands to go after mid-size truck. F-150s, they'll sell more F-150s this year than Jeeps have sold in the last six years. I would say yes, to answer your question, we are absolutely up to speed on JL. I'd also say that the marketplace is looking at JL and saying they're not seeing the upfitting on the JL like we've seen on the JK. We will see that in JL in the next couple of years. I think what you need to do is you have to have those first customers come in and buy the JLs.
Some of them will build the JLs right off the bat, but it's the second and third owners that really start putting money back into the JLs. It's not just us. We have a lot of third-party vendors that sell products for the JLs, and everybody's a little slow on them.
Any other questions for Craig? Yeah.
There's two types of e-com. There's wholesale e-com, the e-com I was talking about, and there's our retail e-com. That's our retail through marketplace, whether that be Amazon or Walmart Marketplace, and also our 4wp.com websites. We're excited about both of those. I would tell you the drop ship e-com customers we're moving away from. That's why when you saw on the slide it say click and mortar, we're very excited about customers who have their own warehouses. If you're an e-com customer like Summit or Quadratec, we're very excited about their business because they have an infrastructure and they have an investment in it. We love to sell to them. If you're going to be somebody who's just going to go and compete with us on the marketplace, all you're doing is driving down our retail prices.
We're moving away from those drop ship customers and moving more towards anybody who has infrastructure, and then moving more towards what we're selling to Obviously, we wholesale to Amazon. We're very excited about that business, but we also sell on Amazon. Both those businesses are doing very well. In fact, our pickup in store in Q2 was up 33%. We're doing some install projects with Amazon. We've expanded that from five stores to 20 stores. That's some really exciting business for us because what you get there is you get the first and second bite on your brand products, but you also get the sale online, but then you get the opportunity to get that customer in store and either do install, where we have high profit on the install and the service part, but then a second shot at selling them more product.
We're pretty excited about that.
Okay. Thanks, Craig.
Sounds good. Thank you.
Up next, Bob Mack, President of Boats and Global Adjacent Markets.
Good morning. I used to get up here and tell everybody that I got to talk about all the slow, unfun parts of Polaris, but now I have the military business and the boats business, so my life's gotten a little bit better. I'll start with adjacent markets. I think about adjacent markets really in three pieces. It's the commercial government defense business, Aixam, and Polaris Adventures. A little more detail on those. If you think about the commercial government defense business, it's really four big brands, GEM, Goupil over in France, Taylor-Dunn out in California, and then obviously Polaris. Makes a wide variety of products, electric, gas, diesel, and sells to a wide variety of customers. Really mostly commercial. We do a little bit of consumer GEM, but most of that business is really commercial.
We don't talk a lot about Aixam as a company, but Aixam's a great business we have over in France. They make what Scott referred to it last night in his presentation as a quadricycle. It's a vehicle that's sold under a standard called the L6 standard in Europe, sold to unlicensed drivers. We've owned this business for several years. It grows fairly well. We're the market leader, and it gives great financial returns. A really good business, just not something that we talk a lot about here in the U.S. Polaris Adventures. Polaris Adventures is really our first foray into the sharing economy. We'll talk a little bit more about it later in the presentation. We started this in 2016, and it's been just a great effort. A couple things to talk about. Things are moving well.
We've had a good first half of the year. I feel good about where we are. Our government business we don't talk about a lot, but John Olson and that team that run that, done a really good job selling packaged RANGERs to police departments, fire departments. You'll see them around here in Minneapolis. That's been a really big growing business for us, and our vehicles are really uniquely suited for it. That's been kind of fun to see. We launched a new diesel work vehicle that we sell to the rental companies, think Herc, United, people like that. Partnered with Kubota on a new engine. That's been really well-received. Couple years ago, we combined the Taylor-Dunn factory in California. We moved production out of one of the Polaris factories on GEM, moved it in with Taylor-Dunn.
I will freely admit that has not been the most positive experience for the first couple of years, but that's on track now. Ken and the team jumped in and really helped us, and that factory's becoming a really good performing asset for us. If you look at it by product, fairly balanced. GEMs the biggest piece, but in total, pretty good diversity across the products. By region, kind of interesting, most of Polaris tends to be a little bit North American centric. Mike alluded to this a little bit in his presentation, too. This business is about half North America and half Europe. We do have a lot of opportunity in Asia, Pacific, and Latin America. There's good room for these products in those markets. We just need to upgrade our sales force in partnership with Mike. Then also, we have opportunities across the segments.
We make great products like Goupil in Europe. We don't sell those products in the U.S. GEM and Taylor-Dunn make great products in the U.S. We sell very little of that product in Europe or in Asia. We've got some things to do internally that'll help us drive some more growth. You look at the business, what we're really focused on, these top four, urbanization, sustainability, electrification, and autonomy, those are things that make sense. You think about what's going on in the world, this is kind of the direction things are going. I'll give some examples of these. The last two are a little bit different. Deployability, Scott talked last night, and I think Chris did too, about the drone that was shot down by the military vehicle. That's really an example of deployability. Everybody took all my thunder for today.
I finally had a good story, and it rolled out last night. The MRZR has become sort of the ubiquitous light tactical vehicle for the military. Lots of companies, I believe it was a Lockheed Martin system on that vehicle that took down the drone. Lots of companies are using it to test new weapons and to help the military put new weapons in a place where they can do good. Pretty cool that you shoot down a drone with a vehicle on the back of a ship. The sharing economy, again, Polaris Adventures, something new for us the last couple years. Goupil. Goupil's a business we've owned since 2011 over in France. Goupil has really a range of three main vehicles. This is a G4. This is our partner, Picnic.
They deliver groceries to your home in the Netherlands, and they're expanding around Europe. These are all lithium-ion powered vehicles. This year, we launched a smaller version of this vehicle called the G2, and next year we'll launch a bigger version called the G6, and Picnic is actually partnering with us on the G6 because they want more capacity and more speed for their delivery. Really good model. In Europe, you're seeing a big move to electric vehicles in city centers, and Goupil has a great brand around the region, and it's been a great business for us. Government defense. We talked about the MRZR. This is the MRZR X. MRZR X is a diesel-electric hybrid version of the MRZR, and the military ran a competition called S-MET, and what they're trying to do is get to the next generation of tactical vehicle.
These vehicles had to be autonomous, they had to be able to be driven by remote control, they had to be electric, and they had to be mobile, certain size, things like that. We had the only real optionally manned vehicle, and that turned out to be really good because, if you talk to the SEALs and the different Special Forces guys, they don't really have a lot of interest in something that if there's a firefight, they can't jump on and drive. Because when you want to go, you want to go. And getting on an electric vehicle that's doing five miles an hour, really not where you want to be.
Pretty cool, because we did this where it's autonomous, it's electric, but it's still got the same diesel engine that the standard product has, and this thing will do 70 mi an hour, and you can get out of the firefight. This program's kind of the testing phase of it's winding down, and they'll pick a production partner, and we feel pretty good about where we are. Adventures. As I said, we started this business in 2016. Started it with two locations. This model is we rent vehicles to owners of outfitters, we call them. People that are at trailheads or at resorts, and they rent vehicles to customers like you who are there on vacation. If you've had that experience, in a lot of places, it's not great. The vehicles are old. The outfitters aren't well-run.
We thought there was a better way to do this. We worked with these folks to develop a model where we provide the software, we provide the booking, we do all the waivers, we provide insurance, we provide the service, and obviously, we provide the vehicles. We've built a great network. In two years, we've gone from two locations to 120. We've done 65,000 rides already this year, and our Net Promoter Score is 82. That's a really high score. People really like this model. It's growing fast. We really like it. It's kind of the start of our strategy to expand alternate access to our product. Pam talked about how much more diverse that product or those users are. It's been a really great model, and the team's done a great job. Now we'll talk about boats.
I think this will run a video. Okay. A lot of people ask, why did we get into boats? It's actually been interesting. I left here last night, went to a restaurant, and had a group of dealers who sat around where my wife and I were sitting, and they asked me that. When I introduced myself, because they all had Polaris shirts on, they asked me, "Well, why did you go into boats?" Well, I'll tell you why. A few things. Boats is a good market. As Scott said, 70% of the world is covered by water, and we weren't in anything marine. In terms of expanding the customer base, that's something to focus on. Also, when you looked at the opportunity, the business we bought, Bennington, Godfrey, Hurricane, Rinker, was the largest privately held boat company, $631 million in 2018 revenue.
A great entry point if you were going to get into the market. Great brands. Bennington's a super brand. We'll talk more about those in a minute. The pontoon business model is actually really attractive. You source your engines from outside people, so you're not inventorying those. It's mostly assembly. It's built to order. The inventory is low, the working capital is low. The asset base is fairly low because it's not intensive manufacturing. It's a business model that makes sense from a cash standpoint. It's also a little more resilient from a downturn standpoint because so much of the business is direct labor. You have the ability to fluctuate that as you move up and down production. We thought from a boat standpoint, that was an interesting segment to get into. We got a great team.
Jake Vogel and the team were here last night. The Bennington folks that were running the business are still running the business. They report to me, but we've left that team in place and supplemented it with some folks from Polaris. That's gone really well. There's also a lot of customer overlap. We don't have great data on this, but we know more than 50% of the people that own an off-road vehicle or motorcycle also own a boat. Something there that we really think we can grow. Those of you that follow the marine industry, you've seen this graph probably a million times. You look at the parts of the marine segment that are growing. Pontoon is one of the fastest-growing segments, has been.
Obviously, this year hasn't been as fast as the last few years, but we've taken some shares, so we feel pretty good about where we are this year. If you're going to be in the boat industry, this is a good place to be. Think about our brands. Bennington obviously is the premier. You see that boat out in the lobby? That's a $200,000 pontoon boat. That is the showcase Bennington product. I probably got that question 25 times last night walking around out there. That's the top of the top end of what we make. Great boat for boat shows. You get people in the door. When you really look at the market, the average boat buyer is buying a $35,000, $40,000 a boat. Bennington covers the whole range. Number one pontoon in the market and a great legacy. Godfrey's kind of interesting.
I'll talk a little bit this a bit more a couple slides from now. Godfrey actually started the pontoon business. They sell under three brands, Sweetwater, AquaPatio, and Sanpan. We're moving that back to kind of more under Godfrey, with those being series instead of individual sort of brands. A great company that sort of was neglected. They were owned by private equity for a while, had some tough times, but a really good history to build on. Hurricane, if you're familiar with deck boats, Hurricane is the inventor of the deck boat. The team calls it the Kleenex of the deck boat. When people think about a deck boat, they think about Hurricane. It's been underinvested in, and we're changing that. Rinker, I'll kind of talk about this on the next slide.
What Rinker gives us is a really good factory in Syracuse, Indiana. We've been able to take that factory. We're working on Rinker. It's a good legacy brand. Also at the end of last year, we bought the assets of Larson and Striper from Irwin Jacobs. We've been able to take some of those boats and put those into the Syracuse facility and start to build them and bring those brands back. Having that facility really has allowed us to do that. Great group of people, really good boat-building legacy. What are we focused on? When we did our long-range plan, we talked about what are the things that Polaris does, that Powersports does, and how does that look versus the boat industry? I think in general what you'll see, towboat guys aside.
The towboat guys sell a high-end product and they're pretty good at what they do. If you look across the rest of the industry, the boat dealers, the boat manufacturers, a lot less sophisticated than what you see here in Powersports. We benchmarked a lot of different areas and said, "How do we leverage Polaris to move faster and do better things with our boat business?" I'll talk about a couple. Web and digital. We launched a new Bennington website two weeks ago following the Polaris model, using a lot of that technology. We'll expand that to Godfrey, Hurricane, Rinker, Larson by end of the year. We're also leveraging our lead management. Rather than going out and building a whole new infrastructure, we take all the great things that Chris and the Indian team have done, and we'll bring those into boats.
We get a lot of acceleration learning from Polaris. We're also doing that on the innovation and Lean side, all the process, all the capability Ken's team has. We can put that into Bennington. Godfrey. This is a dealer meeting show time for boats, and we just came last week from the Godfrey Hurricane meeting. This was the first on-water dealer meeting they've had since 2006. We do the Bennington dealer meeting on water. It's in two weeks. They'd never done that at Godfrey. They hadn't done it in years. We took all those assets and we said, "All right, we'll do Godfrey at the same facility." Brought the Godfrey dealers in. Eight new Godfreys, six new Hurricanes. Really good product. Dealers were really excited about it, and we had a really good reaction. I think that bodes well going into next year. Questions?
Sure. The question was, how much of the slowdown you've seen in boats do you think is weather related? How do we look at inventory coming out of the season? I'll take that in a couple pieces. I think the majority of the slowdown is weather. I think there are some economics. We had really tough weather pretty much around the country in June. We had tough weather here in the Midwest going up through May. That part's been tough. I will say what we saw when we had good weather was great sales. It was sort of unbelievable to watch. You'd sit and you'd look at the retail numbers coming out of the weekend, and if you looked around the country and you looked at a weather chart, if it was warm, we sold boats like crazy.
If it was cold and rainy, we didn't sell anything. It didn't matter the region. If it was warm in Minnesota one weekend, it was a great weekend. If it was cold, it wasn't. You look at going through June. June was tough for the whole industry. July has been really good. A lot of what didn't happen in June got delayed into July, which tells me it's more weather than economy. I won't say there's no economy impact. I think people with the tariffs and just general tone of the news, there's a little bit of trepidation. What we heard from buyers coming in over 4th of July weekend, the dealers would say, "Why are you here now? I've been talking to you for two months." They said, "It's warm.
It's warm and I want my boat." We feel good about where we are. I think the July retail, for at least us, I can't speak for the industry, helps us get to where we want to be from an inventory standpoint. I think the industry's done this. Everybody's pulled down production as the sales weren't materializing in May and June. We certainly did. We feel good about where we sit today and coming out of the dealer meetings, we'll have a good sense on where we're going next year.
You talked about the goal of target [inaudible].
We don't have a specific, Adventures needs to get to this level by this year. I will tell you that when we have the opportunity to grow it and I need people or resources, Scott and Mike give them to me. We're not putting any throttle on Polaris Adventures. We've been adding people and capability at a pretty good clip. My personal goal is, there are 100 top riding locations, 100 top resorts, and I want to have them all. I'm pushing the team really hard in that direction. We're also expanding it. We took it to Indian to do rentals. This year we're doing some of that with ORV at dealers. We're kind of pushing the boundaries of Adventures. It's a good platform. It gives us things to build on for other new models. Second question.
Conversion.
Conversion. We're targeting a 1% number. You'll see higher, you'll see lower. We don't have a great feel for that yet. We're working with Chris's team and Steve's team on how do you better promote to that person, right? How do you drive that conversion? What's the activity that makes them convert? As we build out our CRM systems and the investments we've been making on technology, it's getting a lot easier for us to track that. Joe. Some of it's engine dependent, but I would say six weeks. Yeah. Some models, the value stuff you get faster. That's why the dealers, the great thing about Bennington in particular is the dealers, they're starting to stock for next spring season. We don't struggle too much for orders, even in the transition into the new models.
Robin. His question's about what drives boats demand going forward? How's that look?
Yeah. I think it's like a lot of these industries, I think it's demographics. Boat owners are older than you might think. That said, if you look at the dynamics of the boat fleet in the U.S., the replacement rate on boats had historically been 3%. It's been running just above 2%, really the last several years. There's a view that the fleet is getting old. I think the average boat age is 21 years right now. We think that's going to provide some kind of cushion in terms of even a slowdown because the boats out there are just getting older. I think the other thing that really drives boats is you really look at what parts of the boat industry are doing well, it's pontoons and it's ski boats. The reason is family, right?
Both of those things are a family-oriented activity, and so as the millennials are having children and building their families, you're seeing people move into one of those two segments, and we think that will continue to benefit us.
Jim.
Yeah. One, we saw the legacy personal watercraft market. Other question, Freedom Boat Club.
Yep.
Is Polaris a different model or Freedom Boat Club? [inaudible]
Okay. Wow. Okay.
I don't know if you need to respond to PWCs, but the Freedom Boat thing.
Okay.
I'll reply too.
Sure. Personal watercraft, obviously Polaris was in it. Obviously, we've looked at it. It's a market a lot of our dealers are in. It's a crowded market. If you really look at the product that's successful, it's the $6,000 Spark and the $6,000 Yamaha EX, which is the competitor to the Spark. That's where all the growth is. I'm not sure coming in as a repeat entrant into that is probably going to be the most financially rewarding strategy. It's not something we're too focused on right now. That meet your answer? Freedom Boat Club. Boat clubs in general is a really interesting market, right? Freedom's a big customer of ours, and as are a lot of other boat clubs. We do pretty well with boat clubs. Adventures has actually experimented running the back office software for some boat clubs.
Is it something we could do? Certainly. We have to be measured in how we do it. I think Brunswick will have some of this challenge, right? They're an engine manufacturer, a boat manufacturer. Now you're a boat club owner. There's some things you could step into there that could be challenging. We are very aware of what's going on in boat clubs. We spend a lot of time with them, and it's certainly something that we'll look at, and we could leverage the Adventures model.
What was the third one?
Oh, engines.
Engines.
Engines, probably the most commonly asked question I got when we joined the boat industry was, are you guys going to make an outboard engine? The answer is no. You look at the space, right? You got great suppliers, Yamaha, Mercury, Suzuki, Evinrude. We sell all of them. We're engine somewhat agnostic. We have a big partnership with Yamaha, from a marine engine standpoint. If a customer wants to put a different brand on their boat, that's fine. Dealers really drive a lot of the choice of engines. You'll see, I think we have three different engine suppliers out there on the boats today. I don't see us going into that space. It just doesn't seem like there's enough financial opportunity.
All right. One more, and then we got to move on.
A lot of it's color. We will let you build your pontoon. Some folks in the room have done it. You can build a pontoon at a very detailed level on our website if you want to do that. You can customize color, tubes, engine, different options, color of canvas, type of seating, all the audio. Kind of like Chris talked about with Factory Choice, we're already at Factory Choice. Every boat we build is a custom boat. It was either configured by a dealer or by an actual end customer. That's what drives the time is getting if you want seats with orange trim, we're going to figure out how to do that. It just takes time to get the seat manufacturer to make them.
Okay. Thanks, Bob. All right. Up next, Chris Musso, President, ORV. Bob.
Good morning, everyone. Just so I can level set, how many of you were able to be there last night at the show? All right, great. A lot of you saw it. It was a great show. I thought Scott and Steve did a great job. I thought my team did a really nice job of building everything. It was so fun to see the dealer reaction to the new products. Excited to be here and be able to be talking about it with you more this morning. I thought it might be useful for you just for me to give you an overview of the off-road vehicle industry to start out with. Utility side-by-sides is the biggest segment by far, about 43% of the units. Our estimate for industry is about 47% of the revenue. Now, this does not include accessories.
If you included accessories on this chart, everything gets accentuated. Next, ATV, about 35% of the units and a much smaller portion of the revenue. It's in decline. Low single digits, but it is declining. Then you've got the rec side-by-side, about 15% of units, a larger portion of the revenue, and the same thing with crossovers. Crossovers and rec over the past three years have both been very good growers. Right now, crossover is outgrowing rec pretty significantly. I also thought it'd be useful for you to see the customer demographics. This is kind of just to make the auto guys jealous. We're excited about our customer demographics. It's a younger crew than you see in most of auto, and it's also a higher income crew. Let me just give you a picture of who these people are.
The average rec or the typical rec consumer might be a concrete contractor in Arizona, works hard all week, plays hard all weekend, usually in one of our RZRs, and they live for it, right? The crossover customer, kind of a little bit older, dentist in Minneapolis, right? That's the way to think about it. Lives in suburban Minneapolis, takes their family out, goes in the crossover and does it. Utility customer, a bit older yet, either a multi-acre homeowner or a rancher or a farmer, and more and more hunters that are going out. They use this thing to work. They use it to We say they measure their day by what gets done, and this gets the stuff done for them, right? They love the machines that do that.
ATV, the ATV customer, kind of my age, and typically grew up riding three-wheelers and four-wheelers, right? They love that straddle handlebar experience. Somebody asked me last night, like, "Why would you pay this kind of money for an an ATV when you could get a side-by-side?" I'd say, "Why would you ever buy a motorcycle when you can get a sports car?" Well, you buy a motorcycle because it gives you a different experience, and it's the same thing with ATV. These people love ATVs, and they typically are where there are trails, right? Northwest has lots of narrow trails, and that's where they tend to ride. Just to show you a little bit on ORV owners, this is now more Polaris data. We've got about three million customers.
We look at lapsed, meaning they haven't bought anything for 10 years and then our active owners. We get about 4% repeat buy every year. That's a big competitive advantage for us is that customer base. Overall, the off-road industry is very healthy. It's got a deep customer base, and we're excited about where it is. To give you an overview of where we are, number 1 in all the segments, as you saw last night. We've got about twice the installed base versus others. Honda is the second, and they've got a lot of lapsed customers, a lot of the customers like me who used to ride when they were young. We've got about 90 international sales locations. We're excited about the growth that's happening in international.
Lots of new products that we've been launching and a great side-by-side volume year to date in 2019. We're excited about the growth in the business. We're excited about the way the business has been growing. We think we can continue to grow it as we introduce new product and as we spend time with our dealers and push them out. Also wanted to give you a little more color on the competitive situation. You heard Scott talk about it, you heard Scott and Mike talk about it on the earnings call in that it's been a tough competitive year, right? Let me take them. You've got different competitive dynamics by the categories. In utility, the main competitors there, the biggest competitors are Deere and Kawasaki. You've got Can-Am and this year we've started CFMOTO and they're quite a bit more.
The competitive environment is aggressive but not as aggressive as rec is. You see Can-Am driving quite a bit of promo. Weather's been a challenge this year. We think we probably lost a couple points of growth this year because of weather. What happens is, particularly in utility, remember a lot of farmers and ranchers buy them. We've seen farmers that didn't plant until very late in the season. When you haven't planted, buying a new utility vehicle may not be at the top of your list, right? We saw some challenge there. In recreation environment has gotten much more aggressive over the course of this year. You can see up there, Can-Am has been very aggressive with promo. They've also introduced a new trail offering, which got them into a segment that they weren't playing in.
Honda Talon entered in, and they entered into the 64-inch space, which I talked to you about last night, and they've been able to sell some units as they've gone in there. Crossover has been more stable. Yamaha's come up with a new entry. It's been the fastest growing segment lately, and we're excited about crossover. ATV, you see Honda has in the past, a long time ago, been pretty aggressive in ATV. They hadn't for a while, and then lately they've gotten aggressive again at the very low end. The big bore space, it's been pretty attractive. Some of the products that we introduced last night have been pretty attractive. Overall, our share is down to flat, depending on the segment. A lot of the share loss that we've had has been in youth and low end, right?
As you saw on the previous page, we did raise our price. We knew that when we raised our price, it would damage some of our value offerings. That's allowed us to focus our promo on the more premium offerings. That's what's driven the business we've done forward. We think that one of the big advantages that we have is our complete product line. When I say that we have the broadest product line in off-road by far. We've got a complete product line in ATV, complete product line in entry, an exciting product line in entry, and a fabulous product line in premium.
What that's allowed us to do, particularly as we face the tariffs and some of the other challenges we've had, is it's allowed us to move our promo, let me say that, to focus on some of the more premium segments so that we can continue to grow. That does not mean, and I want to be very clear, that does not mean that we're abandoning value in any way. We continue to compete well in youth. We continue to compete well in the value segments. We use those, we maintain those, and we use those to enter customers in. We're finding more and more I mean, the story used to be that you'd enter an ATV and then you go to side-by-side, and then eventually you'd end up in a RZR.
That's still the story to some degree, but we're seeing more and more customers coming through used and more and more customers coming through entry side-by-sides. As we do that gives us more opportunity to take advantage of this broad product line that we have. Our goal is to meet the customer needs at all levels and then to attract them to move upmarket. As we move upmarket, as you saw last night on the premium side-by-sides, not only do we get better margin and better growth, but the accessory dollars are just fantastic in that space. All right. This is the same strategy that I showed you last year, and it's one that sits very consistent, right? Customer-centric approach, product innovation. We want to be the best partner to our dealers, and then we're entering into new markets.
As last year, I'm not going to talk to you too much about the new markets, know that they're there and know that they're pretty exciting as we go. This highlights our strengths. When I say it highlights our strengths, that customer centricity, when we've got 3 million customers out there, and frankly, 3 million customers that really are pretty passionate about Polaris. Yesterday, when I was driving down here, I was behind a red Chevy pickup that had the vinyl lettering, Polaris on the back. I see that all the time. They love it. They love the brand. We can know them better, and we can activate them better and grow better. The products, you've seen the product, got a really broad product line.
The partnership, we've got dealers that are big and a lot of them that we can leverage and get to know better. As we do this, we're able to continue to grow. You saw this yesterday. We just like to put it up there because we remain very excited about being number one in all these segments. We're going to continue to defend that as we go. Let me talk to you about the customer-centric approach. I'm not going to spend a ton of time on these things, but three things, right? One, the brand is true north. I hope you noticed last night the difference in how the brands feel. As you saw the videos, those brand videos, the one with the RANGER with the doors opening, it always gives me goosebumps to see it because I think it does capture the customer.
With the RZR one, it says, "Then there's us," and it's got that RZR jumping off. They're very different customers, different people. Sometimes people will own both machines, but often, they're passionate to RZR or to RANGER. The way that we message, the way that we develop products, the way that we activate them digitally, that's all different by brand. Second is deep customer insights. We have lots and lots of sources of customer insights, just like you would expect from a company like us. We also have millions of customers. We also have dealers who are just unbelievably passionate about our machines, who are constantly giving us feedback. We have a team that's deeply experienced here that we can leverage. You take all that and we can sense and we can feel needs in the market that others can't.
That allows us to create products and messages that work, that resonate better than others. The last one is personalized journey. We've invested quite a bit in understanding better our customers and understanding who they are and kind of what their digital journey is. There was a big hole at the dealer website. Customers are spending more time now online than they are in the dealerships, which is a big shift over the last couple of years when they're shopping for one of these machines. They had been spending more time on the OEM side, but now they're spending more time on the dealer side. As they go to that dealer side, it kind of turned into a black box for us.
Now that we have the dealer web out there, we're able to understand how customers are acting on dealer web. We're able to create new leads, and that's driving a lot of growth. That also allows us to personalize the messages to those customers in a much better way than we could before. Imagine if you're a customer who's owned a machine, financed a machine, you're 33 months into your loan. We send you out a very specific promo that says, "Mr. Smith, you're 33 months into your loan. If you want to maintain this same $400 a month payment, here's a promo to help you offset that down payment and you can get into a brand-new RZR." It's very effective as we've been doing, and our dealers are doing a great job following up on that.
We're excited about where we can take customers, and we're excited about where we can take personalization. On innovation, you saw some breakthrough products last night. What we try to do is we try to find the balance, try to find the boundaries, and then we just try to push on them just a little bit. Imagine a person inside a Ziploc bag, trying to punch out, and how the Ziploc bag keeps stretching. That's how we see the market. We're there, and we're pushing it, and we're stretching the market as we go. You saw that with Sportsman. You saw it with RZR. You saw it with RANGER.
Factory Choice is a gigantic step, and we want to make sure that you guys understand it because Ken Pucel and his team have stepped in, and it's taken a lot of effort, a lot of investment on our side to make our factories capable to do Factory Choice, but it completely changes the game. On the surface, obviously, it changes the game for the customer because it makes it so that the customer can get the product that they want. It really changes the game for the dealer. What that allows them to do is to have unique inventory. We learned this from Chris Wolf from what he drove in SnowCheck. That when a dealer has unique inventory, they're able to really sell that value to customers and they're able to drive margins, accessorization, everything around Factory Choice.
It really is a game changer, we're very excited about it. Of course, accessories. Steve Eastman is one of my heroes because I watch what he does in the accessory space. We've been closer together than ever as we've been launching this RZR and as we've been launching the RANGER, trying to just drive the hell out of accessory uptake. Our dealers get it, and it's working. Just to give you a little bit more overview on Pro XP. I hope you had a chance to crawl around in it. You're going to have a chance to ride it today. Just watch how you feel when you drive this machine, because I think you're going to find out that this creates analyst heroes, and it's pretty fun to drive in these things as you go.
Some of you guys have asked me. I just want to hit this one head-on. Some of you have asked me about the 181 horsepower. One of our competitors came out with 190 horsepower or has announced 195 horsepower machine. We haven't driven this machine. Our racers have raced against it. We can't obviously take their competitive machines apart, but the racers believe they've been racing against the powered-up machine and that our 168 horsepower with the transmission and clutch upgrades that we've got in this machine have been smoking it. Right. We're excited about that. Here's how I think about it. Obviously, it's inconvenient for us not to have the claim around the biggest horsepower. In a turbo engine like this one, really what you're looking for is you're looking for drivability.
You can tune it so that you can get a bunch of peak horsepower, but it's very hard to drive and you don't get the speed out of it. What we did on this one is we have more horsepower for sure, but we have way more torque and we have a way flatter torque curve. When you drive it today, when you get it into a corner, just tap it a little bit coming out of that corner and you'll see that that thing will just shoot right out because you've got the power where you need it. Think about Ford when they introduced the V6 with the twin turbos versus the V8.
It was a huge gamble that they took, but the take rate on that V6 is very high because everybody realized that even though the horsepower is not quite as high as it was in the V8, the overall drivability and the overall torque is much better and it creates a better machine. That's what we're going for on this one. This is a much better machine in every way than the last one. I love the Turbo S. I really love the Turbo S. If I get into this one and then I get into a Turbo S afterward, it's just a whole different level. It's a great machine. The RANGER 1000, this one we aimed at the heart of the market, just like we did on the RZR, by the way. We shot for that 64-inch extreme part of the market.
On the RANGER 1000, we aimed at the heart of the market, this one's all about comfort. It's all about utility because remember, that's what this customer wants. You can carry more, you can spend your day working in this thing. You get home at night and you still feel good. That's what we were going for because that's what makes a RANGER. When we talk about a RANGER, we talk about ride, we talk about handling, we talk about the ability to do work because we want somebody to be able to do everything that they want to do and then do everything that they want to do in their personal time, too. This machine does a phenomenal job at that. When you drive this one, watch the way the throttle tip-in works.
Just watch how smooth everything is as you drive the machine because it really does change the game as well. In all of these things, we've been able to really engineer accessories. From the beginning of our development process, we're developing accessories. A bunch of the auto guys have reached out to us over the past year saying, "Guys, can you teach us about accessories? Can you teach us how to do it because we believe that Polaris is doing a great job at it?" You look at the numbers there, the PG&A dollar per unit up 48% over the last three years. That is a staggering number, 48%. That means that our dealers are doing better. That means our customers are happier. That means our investors are happier because this is a great business.
Steve and his team have done a great job and we're trying to work very closely with them so that we always market it this way. I think you heard me last night tell the dealers that I never want to see a bare RZR again. I hope that at the show, that's the last time anybody sees a bare RZR because we want to sell it with accessories. Our customers, when they buy it with accessories, they're happier as well. All right. Let me shift gears and talk to you just a little bit about snow. Obviously, it's not snow season, but we don't get a chance to talk to you too much about it. Like Rec Offroad, snow pivots around innovation, and we introduced some great stuff this year.
Chris Wolf and his team introduced two products that help drive our leadership in the mountains. Those RMKs, the Khaos and the EVO. Also driving in the performance flat land with the INDY. We're really excited about what's happening in product innovation, so are our customers. The next one is around personalization. Snow is doing Factory Choice as well, but their Factory Choice is like Factory Choice on a whole lot of steroids, right? You can get to really specific products. You can change the colors of the spindles and the colors of the arms and the colors of your graphics on these machines, in addition to a bunch of the performance upgrades. What that's driven is that's driven pre-sales through SnowCheck way up.
Our SnowCheck sales are up on average. If you look at the average of the last two years versus the average of the previous eight, they're up by 66%. What that does is that takes out a lot of the risk of what happens with weather as you go forward because these things are pre-sold. It keeps customers talking about it keeps them excited. It's amazing to talk to a Snow guy, a Snow customer who's ordered SnowCheck in March, because then they spend the next five months on the configurator and on the accessory website figuring out exactly what they're going to do when they get this machine because they're so excited about it. SnowCheck's a great model, and that's what's led to Polaris being the only company that's gained share over the last couple of years in snow.
I also want to talk for a second about international. That SnowCheck that we saw in North America has also killed it in international. We feel great about that. We've introduced some products. Introduced a new RANGER Diesel in Australia in March, April. A few months ago, we introduced a RANGER Diesel. It's a much better diesel than we've ever had before. In partnership with Kubota, had a Kubota engine in that. The big thing is we changed the bearings and everything, and so that thing is just a monster workhorse. The RANGER Diesels, they see a lot of use in, like, a New Zealand dairy, where you're driving up around. People put these great big cages around them, and they ran their cows, and they did do all kinds of stuff that you can't really imagine with it.
It's a really heavy machine, and it's made for it, and it's selling great. We've also done a bunch of LEs in Mexico and in Scandinavia, which have been really excited, really great uptake. Now as we drive the pro class with Pro XP, we're going to see good uptake there as well. We talked to you last night about being the most preferred partner. We're excited about where we are and humbled, but we got a long way to go. I mean, we want to be even better. Dealers have been pushing us hard on profitability. The reason I was late this morning is because I was in our dealer business meeting with about 2,500 dealers, talking to them about our plan around profitability. What you see up here is the 4 Ps of Polaris dealer profitability.
Different than the ones you all learned about in business school, fitting for our market, right? The first is product, right? When I talk product, we talk about innovation in whole goods because we know that's what gets people through the door. We also talk about innovation in accessories. Guys, I can't tell you how good accessories are doing for us and how good Steve and his team are doing on accessories. We really are doing everything we can to drive it. We also talk about Factory Choice. I can catch you afterward and tell you about how I shopped for vehicles before I joined Polaris because it involved calling a bunch of dealers around me and asking them if they had the product and how cheap somebody could sell it to me.
Factory Choice is a very different story because you call the dealers and you ask for the product, the dealers say, "Well, I can't get that product," you realize how limited it is. When you find the dealer who's got it, you rush up there you buy that machine. It's selling faster. It's doing great, right? We're excited about product, our dealers are excited about where we are in product. The personalization piece, this ties into promo. Dealers will tell you, very consistently on surveys, they'll tell you that we're the most efficient and effective at promo for them. We're excited about that. If you really want to get efficient and effective in promo, you've got to do it personalized, right?
You've got to send it to just the customers that are going to be incremental because otherwise you're giving promo away to everybody, right? We're really focused on using this personalization that I talked about within promo, and dealers are excited about that. In the programs, I introduced two new programs to them this morning. The first is a dealer certification program, and that's silver, gold, platinum, asking them really to do the activities that help them to drive five profit center activity. The way that we're doing it is we're not just asking, we're actually paying them to do it. We changed the holdback structure so that as a dealer becomes platinum, they're able to make considerably more money. Like an average dealer might make $50,000 a year more by doing this.
We're excited about where we can go with the certification program. We also introduced a new rental program today, and the rental program is designed to be able to do dealer demos and also to be able to do service loaners in addition to rental. Dealers are going to take this, and some of them are going to take it and they'll just do demo and they'll do service loaners, and then they'll get good used inventory at the end, kind of like you get from a Mercedes service department. Others are going to take it, they're going to rent the heck out of it, and they're going to turn it into a six profit center. Then the last one. Well, I guess I should mention the MAP policy.
We continue to have the industry's tightest MAP policy, but we did change it a little bit so that we gave a little bit more leeway on value models so that they can use those to get traffic going. Because one of the advantages of having the broadest industry lineup is that you can have value models that get people through the door and profit models up on top that they can use to be able to continue to drive profit. Then the last one is in primary market. We don't sell franchises. We don't have exclusive territories or anything like that.
In fact, we think it's better for our dealers to be able to compete a bit in a market. What we don't want is we don't want them selling 1,000 mi outside of their area, because when they do that, we can't give the customer service that we want. We can't give the customer experience that we need, because if anything goes wrong with that machine, nobody wants to drive back 1,000 mi and try to get it fixed. We're introducing a new primary market program. We're going to do it in an even-handed and fair way with our dealers as we go, but we'll be rolling that out over the course of the next 18 months. I introduced it for the first time just 45 minutes ago.
My phone's lit up with texts from dealers since then, and the basic message is, "This is exactly what we needed." One of them wrote and said, "Hey, my team and I," he's one of our bigger dealers, "My team and I wanted to stand up and applaud because this is light years ahead of our competition, and this is exactly what we need." We're excited about it, and we think we can really drive better dealer profitability as we go. At the end of the day, with Polaris, what you've got to do is you've got to drive profit in all five profit centers for a dealer to really be profitable. We're going to help them do that. In summary, we think ORV continues to be a great opportunity. As I said, we're number one in powersports.
We're number one in the brands that we've got. We've got products that will beat all competitors. If you bring them and you put them head to head, we shy away from no one here. We've got the largest customer base. We're building loyalty. You heard me last night talk about stadiums full of customers. That's exactly how we think about it. As we do our job right, we're going to need bigger stadiums, and we're going to need more stadiums because we want these customers in and we want to keep them moving. We're really focused right now on being the best dealer partner, and we're going to drive that. With that, let me take some questions.
Okay, we'll take some questions for Chris, and then we'll go into more general. Okay, Joe.
Yep. Mm-hmm. Yeah. Let me tell you, the average side-by-side buyer who buys a machine typically goes out and rides with somebody else and feels it first. They ride with somebody who knows how to drive, and then they see what they've got. I think as they feel it, that'll drive it. I'm not as worried. I think if you just come in, if you're a complete newbie and you're like, "Side-by-side looks cool," then maybe you're looking and saying, "I just want to buy the highest horsepower." By and large, it's going to be they will have ridden in something. As word of mouth gets out around this, that'll help. If you look at what we emphasized, don't think for a second that we couldn't have made a much higher horsepower engine. Obviously, we could.
If you look at what we emphasized in this machine, we emphasize rider comfort, we emphasize versatility, we emphasize capability, and this machine just blows everything else out of the water with that. Yeah. I'm glad you got that nuance. I probably should've said it better. Thanks for the question.
All right, Craig.
Thanks.
Mm-hmm. Yeah. Okay. Two things. All right.
Yeah, the question is the value segment now that the new RANGER 1000 competes in that.
Okay. In value segment, to be clear, we're still the biggest in value segment. We're not going to let that go. We can't bring ourselves to just I don't like to lose share, but I like to lose money even less. As we look at what people are doing, we know how much they cost, obviously. They are losing money to be able to buy share in the value segment, and that's not an approach we've been willing to take. We will defend it as appropriate, but we've really been disciplined as we've been going. I'll leave it at that, but just know that we're being disciplined with our investors' money as we go through this while continuing to be able to support our dealers and continuing to be able to grow. The RANGER 1000 is not necessarily a value product.
We've got the RANGER 570 that's our value product. In fact, the XP 900, which the RANGER 1000 is replacing, has continued to sell very well through the space. The RANGER 1000, it is a more price-conscious customer. We say the customer who respects the value of a hard-earned dollar but still needs to get the job done. The value product's not going to be able to get the job done at the same level as the 1000. We don't necessarily think of it as a value entry per se. That said, I think it is an extraordinary value for the customers who buy it because it can do so much. When I talked to dealers last night, they're like, "Really?
For 13 grand, you're going to give them that much? We said, "Yeah, we are." We think we're going to see a bunch of migration from the value segment up to that segment because they're going to see what it can offer. Do you remember last year when I told you how I felt like some of our competitors were really well-disciplined and really they were following that? Something changed. Somewhere in the beginning of this year, we saw a switch flip, and we saw some behavior move from where it had been in the past to much more aggressive, do everything that we can to take share. Certainly, if we think something's getting way out of line, we'll step in and help it get back in line. We call it the blow our brains out promo plan. We choose not to do that.
Yeah.
Okay. Yeah, David.
Well-
The question is, does currency have any impact on promo?
We do think currency has an impact on promo, and we do think the strong dollar is probably driving some of it. The problem is all of that assumes a very rational set of behaviors across the industry. As Scott said last time, some of the stuff that we're seeing is baffling to us. To be clear, when you think about promo, you got to realize that promo, when you apply promo, I think of it kind of as a fixed cost and variable cost. The fixed cost is the cost of the stuff you would've gotten anyway, and the variable cost is the cost of the units that you're getting. When we think about promo, we say we don't want to apply so much promo that for the incremental units that we're getting, it becomes unprofitable.
If you take that same formula against some of the behaviors that we're seeing out there, it is not in play. I guess what I'm saying is, given the behavior that's happening right now, it doesn't seem profit-maximizing to us, and so we're not sure what would happen in a dollar environment.
Okay. James?
Yeah. Sure.
The question is, how does the lineup compete in the different sub-segments of RZR?
Look, 50-inch is a pretty clear segment. The 50-inch segment, people buy the 50-inch segment because they're trying to get through posts on the trail. The trail has two physically big posts, and if you're not under 50 inches, you can't get into the trail. 50 is kind of its own segment. 60 inch tends to be a value segment. That tends to be where people come and buy. In both us and in our competitors, that's your price segment. 72 inch, we originally designed it, and Can-Am came out when they did theirs. They went for the desert, and the machine is designed specifically for the desert. You can tell everything about that one. When we came out with ours, we did a little bit more of a 72-inch athlete, so it's very good in the desert, but also good in other areas.
One of the limits of 72-inch, one of the limitations, is when you try to throw it into really tight corners, it's hard to do. We find the 64-inch buyers are people who are wanting to be able to use that machine, both on trails that'll have the tighter corners, and then in other areas. It does tend to be a pretty specific area. I think if somebody comes in with a cheaper 72-inch, we've got the Turbo S Velocity right there, and then Can-Am just dropped by $4,800 their 72-inch machine so that it can compete right there with the Velocity. That will take some, but we found that it doesn't take much. It really is kind of a segment that's protecting itself.
Okay. Thanks, Chris. That's it for ORV. Let's move into just general Q&A. Mike Speetzen, obviously Scott Wine is here. Some of the other presenters are still here. We'll still take questions on any topic, but this is kind of more of a general open Q&A. Start with Craig.
Dealer profitability. Last night I got cornered by a couple of folks talking about it. Chris sent a text that he got from one of these dealers after the presentation this morning. It's a big issue for our dealers. What we've done, we do a really detailed dealer surveys. Some of you guys get yours, we get a much more granular level, we're seeing that come around. One of the things we've seen is as we sell more accessories, they do better. We do not try to win on the whole good margin on every product line. If we get beat there, we don't even try.
Every dealer, when they look at their entire portfolio with its volume, whether it's accessories, it's all of the different units they have, the service that they get, they win with Polaris, and that's why we're the most preferred OEM. That said, that's not enough to rest on our laurels. That's why Chris is making this investment in market. It's why he's making this investment in primary market areas. I think you're going to see all of that start to manifest itself in everybody realizing, not that they've always made a little bit more money with Polaris because we're so much bigger. They're going to make more money by a significant margin with us going forward, and that's a pretty exciting place to be.
Yeah, Robin.
The question was, next year's an election year, how do we think that's going to play out on market? The one thing we know is uncertainty is not helpful for anyone. There's likely to be added uncertainty because of that. I will tell you that as I've known from some of my comment on tariffs, most of our customers are Trump supporters, to be honest. I think as he's going to be out there promoting his brand and whatnot, it's probably going to be helpful to us in some regards. Where the election falls out, I have no idea. We think the economy is likely to stay good through the first half. I'm a little bit worried going into the second half of next year, what happens to the overall economy, but we'll be ready for it.
James?
James asked me why I'm so dumb that I'm going out to help our competitors with tariff relief. Quite honestly, we felt like it was better from an argument perspective to help more people. I mean, ultimately, this is about American manufacturing jobs. If you think about the stated goal of the administration, it is to protect and enhance American manufacturing jobs. I talked about last night, we've got 9,000 employees in the U.S. I talked about that we spend $3.5 billion every year bringing our products to market here in the United States. We're the most American company. Providing relief to the powersports industry helps us probably about 80% of what happens. We get 80% of the benefit. I don't mind giving up that 20% and just creating a level playing field.
What I'm frustrated about and why I'm spending so much time in Washington making our case is it is a tremendously unlevel playing field benefiting those that don't invest and reward people in the United States. I think we're getting a receptive audience to that. We just need them to actually do something.
Any other questions? Any additional? Tim.
We're really proud of our military business, but it's still relatively small, still below $100 million. We keep thinking we're going to have this great breakthrough moment. As Bob talked about it, some of these technology opportunities we have, we're making great progress. We're still ultralight utility means almost 100% market share, but we haven't gotten these big programs of record. If you look at what happened, I'll take Oshkosh as an example. They were mostly a commercial business. They got a huge program of record, and then their defense business ballooned. We're close on some of those, and if we get one, we think it'll really propel us into a whole another level. Right now, it's sort of a niche business. It really does help us a lot with technology.
Really, we take a lot of the technology, our partnerships with DARPA, that we can do to bring things better to the especially the Special Operations Command, and take it to other levels, but it's still a relatively small business. Steve, do you want to any attachment rates you're willing to disclose? Well, yeah, but they can't hear you online, so that doesn't.
What I would say is that the attachment rates in general on the off-road vehicles is the largest attachment rates we have across the portfolio. RANGER's the highest attachment rates we see overall. When you think about Factory Choice, we're seeing uptake that's a couple multiples over what we see a la carte in the dealership. Factory Choice, delivering a vehicle to the dealer that's fully accessorized, drives higher attachment rates. As Chris highlighted yesterday, we still see significant uptake on a la carte accessories in the dealerships. Factory Choice is lifting the total accessory attach rate for the business.
Another question, James?
Yeah. Let me lay out, I'll do retail by week for the balance of the year. I'm just glad you asked me a question. I was kind of feeling awkward standing up here. Yeah, we went through the split, and the sales breakdown between the two quarters is relatively the same. You can kind of do the math there. We do have in Q3 a heavier spend from an engineering standpoint. Ken and Scott last night talked about our Project Sunburst. There's a lot of engineering validation that's happening in the third quarter, given the supplier changeover that we've got. Obviously the expense of this dealer meeting, which is not cheap. We do have some mix of products between the two.
Chris, I think, went through and showed the shipment schedule, so you can get a good sense of what we're expecting in terms of when the new products are going to start to ship and when we'll see those going through the channel. I think we've got it laid out in a way that we've tried to accommodate for what we saw from a weather impact. Scott talked about it on the earnings call that we're not anticipating a bunch of that to come back. We have fully adjusted the factory build schedules, to reflect what we saw in terms of the retail mix. We've projected through the balance of the year and still feel good about what we've got laid out.
Great.
Yeah. Go ahead, Craig.
The question is what happens if Craig actually does what he says he's going to do and get TAP turned around and be successful? We're really confident that he's going to do that. As he talked about, it has been a tough slog. There was a lot that needed to be fixed fundamentally there. It is tremendously meaningful from a profitability standpoint as that continues to make progress. Yeah, it's not a rounding error by any stretch of the imagination. What's interesting is because of the retail stores are starting to perform, one of the things that's best for me about this whole event is you get to see how strong the leadership team is. What you don't see is that next level down.
Evan Keller, who went out with Craig to run that 4 Wheel Parts business, he's just killing it, and it's just the gift that keeps on giving. As they continue to make these fundamental improvements, it's going to get better. We think he can be a very strong, very profitable part of our portfolio. I think, Steve Eastman, if you just look at what he's done with our Parts, Garments, and Accessories business, then our powersports aftermarket brands, it's really following that same model. It's not an overnight success story, but it's a fundamentally sound, long-term profitable growth strategy. I'm very confident that Craig, with Steve's leadership, is really going to continue that path.
Laura.
That's what you get for sitting close to Tim, long questions.
[inaudible]
Okay, the question is: looking at all of the customer growth opportunities, how do we figure out where do we prioritize? Is it Latino or Millennial or women? What I would say is that we go category by category, brand by brand. We've actually done extensive analytics and qualitative research to understand for each business, where is the best opportunity. Even as I look at off-road and side-by-side in particular, certainly there's opportunity with Sportsman. When we look at the side-by-sides, RZR's profile today is different than RANGER. Right there, that tells us something. When we do the qualitative research and understand the attitudes and beliefs and who's leaning in, we're picking very specific microsegments. When you look at the off-road customer, it's not the same for every brand. The same is true for each business.
You might say on RZR, we're going to focus on Latinos and millennial, and on Indian, frankly, women riders. The MIC came out and said 19% women ridership, and I believe ours is around 10. Right there you can see for each business, we got to go business by business, and we can't just blanket across Polaris, here's our objective. We've got a team focused on each brand, each category, and doing what's right for them, working very closely with the businesses, because long term, this is their adoption of this and inclusion that's going to drive it forward. In terms of the dealers, look, our goal is we've got to drive the traffic to the dealers. We want our dealers to treat customers right and give them an awesome customer experience and bring them back.
That way, they don't have to figure out when someone walks through the door, how do I talk millennial? How do I talk female? They're going to give a great customer experience, and we're going to work with them on doing that. Then we drive the traffic, they convert and create great experience.
[inaudible]
The follow-on question was where's the biggest opportunity across all of our business units? It's undoubtedly with off-road vehicles, just because it's such a big part of our portfolio. It's the one, except for RZR, which does reasonably well, the rest of the portfolio doesn't. I think Chris is really engaged with Pam and her team, and they're starting to look at those opportunities. I think that's the biggest short-term and long-term opportunity. Because Pam's worked so closely with Steve Menneto, they're already making really good progress with Slingshot and Indian. I think that will continue to grow. Pam, did I get that right?
Joe then Mark.
[inaudible]
I think if I understand your question is why are so many people entering this off-road vehicle space? Is that?
[inaudible]
It's interesting. As you can imagine, we pay really close attention to this. John Deere made a huge push in the side-by-side space and then kind of backed off and reconfigured and took a little bit of a different, a more measured approach. The others, I think it was just a natural that Honda was going to enter the sport rec space. They did it somewhat conservatively, like they do almost everything, but they're red and they're Hondas and they're very durable, and they're going to do reasonably well. I think people are recognizing there's a lot of opportunity here in this space. As Chris said, we're not backing down from anybody. We feel really good about our portfolio, our brands, and our ability to compete and win going forward.
I do think that there is going to be a reckoning when there's ultimately an economic downturn that It takes money to invest, to play. I mean, look at the snowmobile industry, for an example. There used to be, I don't know, several dozen snowmobile manufacturers, and then it got whittled down because it takes so much to compete and win. And ultimately, that same kind of ability to continue to invest and bring new products and new customers into the market is going to narrow it down. Again, I feel good about our ability to compete. Just a quick thing on the horsepower comment. Just a reminder that it's ultimately horsepower to the ground. And Chris Wolf, really proud of his team. For two years, our 800 RMKs competed in hill climb races against a competitor that had an 850 RMKs.
For two years, we were 50 cc's down, and we never lost a race. We know how this works, and I think, really confident that when you ride the product, as Chris said, you'll realize that it's not a horsepower play.
Okay, Mark.
Kind of a similar question. How do you balance the long-term plan with the new product platform? Maybe the horsepower was a good example of this. All of the plan goes into
If I look back a couple of years in my 11 years now, a couple of times we've made mistakes. One time we made a mistake, we had a 1,000cc RANGER, and it was a busy year of product news, and we decided to hold it, and then Honda launched a 1,000cc, and it really hurt us from a market share standpoint. We try to be very thoughtful about what else is going on. Our product planning is a long-range product plan. It's not short-term, so it's about a five-year look. When we went through all of the recall stuff, we spent a lot of engineering resources to address some of the issues and make sure that we had the most safe, most reliable products we possibly could. We got a little bit behind.
I think what you saw last night and what you'll ride today is an example that we're back to playing offense. When we're playing offense, I feel really good about where we are at. A lot of times it's powertrain and chassis, and it's a long-term cycle, so we cannot be reactive. We can't speed things up, so we're just on the profile that we're on. As you know, we lose a lot of trail market share right now. We can't short-term redirect our product planning and get that turned around. We're going to be methodical and make sure when we come back, we've got exactly the right product in the portfolio. We feel like we're back on offense and plan to stay there.
Okay, maybe one more. If there's one more question, otherwise we got to wrap it up here. Okay.
All right.
Good.
Thank you for coming in. Enjoy the ride today.