Harley Davidson Financial Woes

[Theweapon52]

It all comes down to how a particular brand markets its image, when i think of harley davidson i think of that rebel-bad "O Ring" biker guy. I think when it comes to cars and motorcycles that japanese and european companies have a more attractive image for somebody who is looking to buy a first bike/car. There are a number of factors as to why Harley is losing more sales than most and i think the biggest of them all is they are usually 2nd or 3rd buys for riders and not the all important first bike. I find that most companies have the same strategy as tobacco companies and that is to hook them young or when they first start.

Having said that i doubt harley will need a bailout or will disappear off the map because the group of people riding harley davidson product are pretty gung-ho about their machine. As Stated before, everyone is losing sales and it will probably result in downsizing, not a company disappearing for good.

[dr_bar]

It funny people are talking about sale of bikes going down...

At this years Motorcycle Show held locally, retailers reported record sales of bikes at the show. The M/C instructor that I was doing some work for at the show, reported his best year for numbers of people enrolling in his classes... Is there really a recession happening in BC???

[Theweapon52]

It funny people are talking about sale of bikes going down...

At this years Motorcycle Show held locally, retailers reported record sales of bikes at the show. The M/C instructor that I was doing some work for at the show, reported his best year for numbers of people enrolling in his classes... Is there really a recession happening in BC???

Thats weird, When i bought my bike the sales guy had said he had seen a 20% decrease in overall sales for the store and it was like 11% or something for bikes specifically. Good news to hear not everyone is suffering though.

[RockBottom]

It funny people are talking about sale of bikes going down...

At this years Motorcycle Show held locally, retailers reported record sales of bikes at the show. The M/C instructor that I was doing some work for at the show, reported his best year for numbers of people enrolling in his classes... Is there really a recession happening in BC???

Thats weird, When i bought my bike the sales guy had said he had seen a 20% decrease in overall sales for the store and it was like 11% or something for bikes specifically. Good news to hear not everyone is suffering though.

Wait a minute--since you're Canadian, are you talking about a metric 20% or in fahrenheit?

[RhadamYgg]

Thanks for the economics lesson, it took me right back to all those long, boring hours spent in the classroom when I took it in school. The point I was trying to make is that the majority of people have misinterpreted Harley's recent profit loss and current financial state as being based solely upon a downturn in sales, when in fact the majority of that loss comes from the financial arm of the company.

As for the whole widget thing, I said a cheaper product, not a better one. Whether we're talking motorcycles or particle beam accelerators, a "Made in the USA" tag does not always mean an inferior and/or overpriced product.

But, specifically with regards to Harley, at the time they applied for tariff protection they did have an inferior, over priced product. However, the company turned around in a short time and began to rapidly improve their quality and reliability issues to the point where today's bikes are vastly superior to the AMF era ones. Whether or not you or anyone else feels they are inferior to any other brand is a whole other topic, but consistent sales totals of over 300,000 units per year is not the mark of a company that wasted it's time, money and effort under the protection of a tariff on their competition.

Actually, I think they have some pretty reasonable bikes, with the exception of price. They are targeting price with some new bikes, I understand.

They just aren't me, that's all.

I'm with you - the article they pointed out that a lot of the weakness for HD is the financial arm. They did continue to state that consumers having trouble getting financing was hurting their sales.

Which also has nothing to do with the quality of their product. I'd love to have a V-ROD with ABS. It is just wayyy out of my price range.

RhadamYgg

[RhadamYgg]

Don't think they need a bailout. They're complaining cause they only made 65 million in profits for their investors last year. The poor buggers. I wish I'd only made 65 million last year.

Yeah, but they borrowed to pay for operating costs - if I recall correctly. That is usually a very bad sign.

RhadamYgg

[RhadamYgg]

They can always divest themselves of the financial arm - and find someone to buy it for pennies on the dollar owed.

It will damage their ability to sell bikes, though - not having their own lending arm.

RhadamYgg

[flynrider]

But, specifically with regards to Harley, at the time they applied for tariff protection they did have an inferior, over priced product. However, the company turned around in a short time and began to rapidly improve their quality and reliability issues to the point where today's bikes are vastly superior to the AMF era ones.

This is true. By the time the tarriff was requested Harley was kind of an industry joke. They only sold to a small group of hardcore loyalists. I naively bought a new Harley in '83 and it was a big mistake. It leaked oil on the showroom floor and broke down on a weekly basis. I sold it within 6 months.

The tarriff really had me stumped. Japanese 4-cyl bikes in the 750-1100cc range were the hot sellers at the time, but I couldn't fathom how increasing the costs of these bikes (via tarriff) was going to help Harley's business. Someone in the market for an Interceptor, KZ1100 or GS1100 was not going buy a big V-twin from Harley, even if it was cheaper. I think the advent of the cruiser style, V-twin bikes in the mid 80s and Harley's huge leap forward in quality (Evo engine) were the deciding factors. I don't think the tarriff made much difference at all, which was why Harley requested that it be lifted early.

[koji52]

I think it's of upmost importance to note that the author of that article is short on Harley-Davidson. He's going to print the most gloom and doom article he can possibly write. You need to do research for yourself before drawing conclusion from one person's opinion. NOBODY knows what will happen in the future, not even the experts. It's the panicky, just-read-the-articles investors who have amplified the market downturn. Absolutely ridiculous.

[RhadamYgg]

I think it's of upmost importance to note that the author of that article is short on Harley-Davidson. He's going to print the most gloom and doom article he can possibly write. You need to do research for yourself before drawing conclusion from one person's opinion. NOBODY knows what will happen in the future, not even the experts. It's the panicky, just-read-the-articles investors who have amplified the market downturn. Absolutely ridiculous.

Interesting point. I didn't notice that. I wonder if he's got money that HD will go down. If so, and it doesn't go down in stock price he's probably going to owe somebody a lot of money.

RhadamYgg