Indian Motorcycle Completes Final Phase of Rebirth With Introduction of Its Powerplus 100 V-Twin Engine

GILROY, Calif., Jan. 15 -- Indian Motorcycle Corporation, the oldest manufacturer of American motorcycles, today announced its first new Indian engine in half a century, taking the final step toward regaining its prominence as one of America's premier motorcycle brands. The new engine represents a return to Original Equipment Manufacturer (OEM) status for Indian Motorcycle and marks the final phase of the company's comeback, begun in 1998, after a 45-year hiatus.

``With the roar of this new V-Twin engine, we mark the final page in the rebirth of an American icon,'' said Frank O'Connell, CEO of Indian Motorcycle Corporation. ``Coupled with new products we will unveil in the next few months, I think motorcycle enthusiasts across the country will be surprised and delighted. They've waited a long time and now that wait is over.''

Introduction of the new engine completes a three-year, multi-million dollar design and manufacturing project. The engine is both distinctive and unique while remaining true to the styling and performance indicative in Indian's longstanding heritage.

Indian's powerful 100-cubic inch (1638cc) 45-degree, V-Twin Powerplus(TM) 100 engine is the largest displacement engine manufactured by an American OEM motorcycle company. With its signature serrated, billet-aluminum rocker boxes and stout, rounded cylinders, it recreates the unique look, robust feel and guttural sound of the original Indian engines which have won the hearts of motorcycle enthusiasts the world over since 1901. The new engine reaches back to the classic Indian powerplants of the past to re-create, with modern technologies, the authentic heart of the Indian motorcycle which will beat in 2002.

The significance and importance of this new Powerplus 100 V-Twin engine is revealed in the fact that the renowned Petersen Automotive Museum in Los Angeles, which houses one of the premier auto collections in the world, has asked to include the new Indian Powerplus 100 V-Twin engine in its permanent collection as an example of landmark styling, technology and design.

Indian Motorcycle Corporation's experienced management team is led by CEO and avid motorcycle enthusiast Frank O'Connell. O'Connell has an accomplished background heading branded consumer product companies lifestyle brands such as Reebok, Skybox and HBO Video. Since joining Indian Motorcycle, O'Connell has made key staff additions, primarily from the automotive industry, to bring in new skills and further strengthen the management team.

Indian's brand loyalty and resurgence is most evident in recent retail sales figures. Sales rose 77% from 2000 to 2001, with the company selling more heavyweight cruisers (900 cc plus) in Dec. 2001 than BMW, Kawasaki, Suzuki or Polaris/Victory.

``Our sales figures speak for themselves,'' said Frank O'Connell, CEO of Indian Motorcycle Corporation. ``These numbers are a direct reflection of the passion behind the brand.''

In June 2001, the company secured the sale of up to $45 million of preferred stock to the Audax Group, a leading private equity firm based in Boston, MA. Proceeds from the Audax Group investment is being used primarily to invest in designing and engineering the continued development of a broader line of proprietary Indian motorcycles, selectively broadening the Corporation's dealership base and expanding the existing organization with strategic hires.

Indian Motorcycle Corporation, based in Gilroy, California, was formed in 1998 to re-launch an American icon. The original Indian Motorcycle Company, which built the first American-made motorcycle in 1901, was a leading motorcycle manufacturer for almost 50 years. Although Indian Motorcycle products were out of production from 1953 to 1999, the Indian brand is still well known to motorcycle enthusiasts because of its reputation for reliability, innovation and distinctive styling. Indian Motorcycle currently designs, manufactures and markets three premium heavyweight motorcycles and a broad range of related products, parts, accessories, riding gear and lifestyle apparel. For more information on Indian Motorcycle Corporation, please visit www.indianmotorcycle.com .