Polaris Industries wins ATV contract with German army

Polaris Industries Inc. has long made military all-terrain vehicles for U.S. forces, but it's expanding its reach overseas.

The Medina-based company announced Thursday that it secured a contract to provide ATVs to the German army.

Under the deal, Polaris will customize its MV850 ultralight tactical vehicles for the German army and special forces. The vehicle was originally designed for U.S. Army use in Iraq and Afghanistan.

While Polaris would not disclose how many vehicles it will deliver or the dollar amount of the contract, officials said the deal was a victory of sorts. The contract is Polaris' first with the German military and broadens its roster of international military sales, which include sales to Israel, Canada, Norway and Singapore, said Polaris spokeswoman Donna Beadle.

Polaris Defense General Manager Rich Haddad said in a statement that international militaries are increasingly looking at Polaris military vehicles because of the company's "ability to make modifications to our commercial off-the-shelf technology and to insert customer requirements quickly."

Polaris offers several unique options, including its airless or "non-pneumatic" tires, which can withstand nails, railroad spikes, glass, and war-torn terrain without going flat. Polaris also offers military ATVs that are electrically powered and have various seating options. The company makes ATVs for two, four or six passengers and offers various rack attachments.

Polaris' international military sales will be more important to growth going forward because of U.S. Department of Defense budget cuts. Polaris' military sales have been affected by America's exit from the war in Iraq and its planned departure from Afghanistan by the end of 2014.

However, opportunities in overseas markets like Germany seem ripe for military sales.

"In July of this year, they [Polaris executives] were talking about leveraging some of their U.S. deals into international military markets," Smith said. "It's something they continue to talk about and emphasize. It's a small piece of their business, but is an opportunity for them to grow."

Though looking overseas, Polaris officials will be the first to admit that the U.S. military put Polaris' defense unit on the map and helped it sell tens of millions of dollars' worth of military products.

Polaris Defense was created in 2005 and went on to sell military vehicles to U.S. Special Forces in Afghanistan, Iraq and to the National Guard.

In 2007, Polaris won its largest military contract at the time, a three-year, $16 million deal to make 1,000 ATVs for the U.S. Army. In 2009, the order grew by $6 million. In 2011, Polaris scored a $54 million contract for military ATVs and parts for use in Iraq and Afghanistan. And last year it partnered with the U.S. Army and another company to develop lightweight armor for military vehicles.

The push into overseas markets and fresh research into unmanned vehicles and lightweight armor give Polaris hope. "Sales were down in 2012, but they still expect 2013 to be a good year," Smith said. "They still expect growth in total military sales this year."