jstark47 wrote:-Holiday wrote:back on subject, kinda:
why does harley even need to make the bikes themselves all that competitive with the japanese and euro bikes? I mean, such a huge percentage of the revenue comes from non-bikes sales...............Harley has no pressure to make their bikes better then the competition as long as they keep selling those hats, and stickers that go on the back of pickup trucks.
I think this "huge percentage of revenue from non-bike sales" has become a bit of an urban legend. Let's take a look at Harley's 2005 business results. Gross revenues from sales:
Harley Davidson bikes: $4,183,500,000 78.3% (yeah, that's 4
billion )
Parts and Accessories: $815,700,000 15.3%
Merchandise (includes Motorclothes): $248,900,000 4.7%
Buell bikes: $93,100,000 1.7%
Miscellaneous: $2,000,000
There's also $191,600,000 in operating income from Harley Davidson Financial Services.
248 million bucks from clothes, hat, stickers, etc. is nothing to sneeze at, but it's less than 5% of their income. The lack of pressure to make the bikes 'competitive' (assuming one accepts the premise of that statement) comes from the demand for the bikes themselves. More than 325,000 bikes shipped in 2005, somebody sure wants them. Harley is a cash engine at the moment. Whatever you think of their bikes, branding, etc, there's no doubting their business acumen so far. Hopefully the management will continue to make correct business decisions.....
