Continuation of the Harley Sales Saga

[Jacine]

"Harley-Davidson Announces Unsurprising Fourth Quarter Dip, Staggering Overall 2009 Income Plunge
Friday January 22, 2010
Harley Davidson Harley-Davidson's just-unveiled Forty-Eight Sportster will get its fair share of attention among H-D enthusiasts today, but the Motor Company's bottom line is sure to take precedence in the mainstream news.

Not surprisingly, the last quarter of 2009 wasn't kind to Harley-Davidson, with a fourth-quarter net loss of $218.7 million (which translates to a $0.94 slip, per share.) Overall revenue for 2009 was $4.29 billion, compared to $5.58 billion in 2008, a 23.1 percent drop. Income in 2009 plummeted a staggering 89.7 percent from 2008's figure of $684.2 million to $70.6 million, which Harley attributes to lower motorcycle shipments, the exit costs associated with the discontinuation of the Buell lineup, and non-cash charges related to Harley-Davidson Financial Services.

As for the future, Harley-Davidson anticipates shipping between 201,000 to 212,000 bikes worldwide, a 5-10 percent drop from 2009 figures. President and CEO Keith Wandell admits that, "We believe 2010 will continue to be a challenging year," a frank depiction of Harley's struggles in a marketplace which experienced a precipitous 41 percent drop in overall U.S. bike sales last year."



Still it would be nice to make 70.6 million.

[allworld]

Unless HD can attract younger buyers then they will continue to struggle.
Traditionally HD sells high end bikes at a premium price to older people who will ride them on weekends or only ride them about 3K-5K miles a year. At that rate how often will the same person buy a new one? The numbers don't add up favorably for HD, if there is plenty of low mileage used HD MC's on the market and increased competition, as well as a soft market for MC's in general how do they think they will increase revenue.
They dropped Buell, when they should have expanded the lineup into products that would attract younger buyers, introduce a line of touring bikes in the 700-800cc range, as well as bikes for beginners with a full line up of accessories. You can buy all kinds of things with the HD logo on it so why couldn't they do the same with Buell?
Much like Buick, HD needs to reinvent themselves that get buyers to buy.

[kz1000st]

Unless HD can attract younger buyers then they will continue to struggle

There's an old joke where the punch line goes " Do you have anybody approaching retirement? Answer-I don't know anybody going the other way."

Harley will always have a built in audience among motorcyclists because they're always getting older. I'd rather they rode big Jap V-Twins, but they're not listening to me.

[hardd1]

dunno, I luv my hog.....2005 Road King...red, of course......Harley has never catered to the beginner riders, they do offer the best riders course however....many,many female riders receive the schooling and are seen on the Big Hogs over Harley's entry bike "Sportster"....yes, they are pricey but so is Vespa. Not uncommon to see a 30+ year old Harley or Vespa on the road...in the years to come I doubt there will be any 30 yr old Wildfires,Tanks or Roketas seen on the road...Harley and Vespa merely represent the "gold" standard of bikes

[qwertydude]

The difference is I see more 30+ year old Hondas on the road than Harley's and these Honda's are not chromed out 30 year old showpieces ridden for 10 miles to the bar once a month. Nope a lot are old nighthawks and even classic CB750's with over 100,000 miles on the engines. That to me is a gold standard, true quality that shines through a product, not branding.

Now I wouldn't say Harley targets experienced riders just old ones, no when I think experience I think high performance pushing the envelope, none of which Harley does except pushing the envelope of seeing just how many parts bin combinations they can piece together and hawk to their customer base saying new and improved now with new chrome grips or new and improved flat paint. Really not any sort of envelope pushing there.

[earlwb]

Basically all the big motorcyles are for the baby boomer generation. Older folks who want to ride motorcyles. The baby boomers used to be able to afford the big expensive bikes. But with the "recession" (a depression actually) the baby boomer's money evaporated. So not many people around who can throw descretionary money out for a big expensive motorcycle. All the brand name motorcycle companies that have big expensive motorcycles have the same problem. Their target market evaporated with the recession. But unlike Harley the other brands still, more or less, had smaller motorcycles they could sell.

[tastroman]

Not to mention the growing Harley hate that is popping up on many brand neutral websites. With Harley riders described as dressing like pirates and for show only owners, the negative connotations justified or not, can not be helping their bottom line. The argument against riding a Harley seems to have changed from unreliable to uncool. IMO they really messed up when they dropped Buell.

[kz1000st]

Riding a Harley hasn't been about mainstream thought for the last forty years. You leave logical thinking behind when decide to become an owner. Pushrods, air cooling, two valves and having to rebuild them every 40,000 miles makes them a different animal. It's the "Mystique". Like any disease it will spread again.

[qwertydude]

Jan 25, 2010 8:30:20 GMT -5 tastroman said:

Not to mention the growing Harley hate that is popping up on many brand neutral websites. With Harley riders described as dressing like pirates and for show only owners, the negative connotations justified or not, can not be helping their bottom line. The argument against riding a Harley seems to have changed from unreliable to uncool. IMO they really messed up when they dropped Buell.

blahhhblahblahhhbbbbbblahhbbrrrrbbbb.ytmnd.com/

Recognize it? Harley has become a joke.

[kz1000st]

OK, but read this article about Honda sales.

www.motorcycle-usa.com/582/5626/Motorcycle-Article/Honda-Releases-2009-Global-Sales-Stats.aspx

Down from 391,000 to 204,000 in America. Sometimes sales figures are just numbers. I'm not seeing any articles about Honda USA dropping dead either. Can you say "Let's introduce the expensive VFR 1200"

[tastroman]

I I were heading Harley I would be more worried about the changing perceived image of the Harley culture by the under 40 crowd than I would about recession sales slumping. The economy will turn around (hopefully), but reversing the negative stereotypes created by Generation X and Y and then expecting to sell them a $16,000 motorcycle 10 years from know is their real challenge. I'll say it again, they never should have dumped Buell.

[kz1000st]

Jan 26, 2010 9:36:29 GMT -5 tastroman said:

If I were heading Harley I would be more worried about the changing perceived image of the Harley culture by the under 40 crowd than I would about recession sales slumping. The economy will turn around (hopefully), but reversing the negative stereotypes created by Generation X and Y and then expecting to sell them a $16,000 motorcycle 10 years from know is their real challenge. I'll say it again, they never should have dumped Buell.

I agree. But when those generations get tired of bending over a sport bike and go looking for a cruiser I think their answers might surprise you. I'm a baby boomer and if I bought a V-Twin it would be Japanese. I'm into modern day thinking, not water pump technology, yet my peers are buying appearance, not tech. These same people buy Camrys with vvTi. Don't be too sure that Gen X and Y won't fall for the "allure" when their backs give out. Not everybody's like Triumph Guy.

[tastroman]

I hear you. It almost makes me angry that Harley did not do more R&D when the money was flowing. I really want Americans to be able to manufacture a motorcycle and would hate to see Harley go under. I just do not know whats going to save them at this point. As quirky as Buells are, they at least demonstrated the excitement of American innovation. Now, Harley has all of its chips in one basket.

[kz1000st]

Jan 26, 2010 10:22:53 GMT -5 tastroman said:

I hear you. It almost makes me angry that Harley did not do more R&D when the money was flowing. I really want Americans to be able to manufacture a motorcycle and would hate to see Harley go under. I just do not know whats going to save them at this point. As quirky as Buells are, they at least demonstrated the excitement of American innovation. Now, Harley has all of its chips in one basket.

See, the thing is, look at Victory Motorcycles. They're everything Harley should be. Modern, well made, and now, good looking. Yet they're called Copy-Cats. Made and designed in the USA, How do you win? I'd even buy one of those first. Harley is stuck in a market of dunderheads. If they change their design, their faithful will yell. Face it, the V-Rod is a modern design. Didn't sell in big numbers. If they switch to a more modern design with water cooling, oh my won't the Budweiser crowd be calling the new bike a Jap motor.

I saw a Buell 1125R. Fabulous bike. All first class ideas for a super sport bike. No place to put a beer cooler or sissy bar though.

[allworld]

Truly you can't please everyone.
I agree HD should not have dumped Buell, that could have and should have been their youth brand. Keeping tradition alive, HD needs to that as well.Negative opinions shared by the next generation on prospective buyers is why they need a youth brand.
It is not like they can't design and develop new products, that will appeal to a larger market. Sure there will always be the hard core Harley purist, and that is a good thing.At the same time, you develop a line of products that incorporate 21st century engineering. They could have several name plates if marketing becomes an issue.
I really don't see a robust future in limited appeal and products.

[earlwb]

Well they quit making the VRSC types of liquid cooled engine motorcycles. They quit making the Buells too. Now they have only old obsolete air cooled big twins and a few Sportsters (the rumor mill says they want to quit making Sportsters too). So now as the emissions programs tighten more, they eventually will hit a point where they cannot get a air cooled engine to pass emissions tests anymore. it may happen a lot faster too, rather sooner than later. of course maybe they are expecting a government bailout or exemption from the emissions rules.

Of course they could move manufacturing to China and sell bikes over there where the market is exploding and going up in leaps and bounds and the emissions regulations are weak. They don't have to sell here anymore.

[rallyrrr]

Where Harley messed up was putting that hand clutch, foot shift, rear suspension, shock absorbers, overhead valves and oil pump on the best bike ever. You kids don't know nuthin' about real mororcycles.

[rapidjim]

As one of the "old crowd" I have to chime in here. Harley has always been the "outlaw" of motorcycles. It isn't for everyone and probably never will be. The Japanese bikes have always "copied", or tried to copy, the look feel and sound of a Harley at a cheaper price. The fact is a Japanese bike will never be a Harley. It is like trying to compare a Vette to a Datsun 280Z, the 280Z may look like a Vette but it isn't.

Parts wise, overall parts for a Japanese bike are just as expensive, if not more than a Harley. Sure the outlay of cash to buy a Harley is more than a Japanese bike, but the resale value is a lot higher for a Harley. Where I am located, we see more Harleys on the roads than others, second to that is "crotch rockets" which appeal to the younger crowd.

I have owned several different brands of motorcycles over the years, Kaw, Triumph, BSA, Norton, Honda, Yamaha and Harley. For me, I enjoyed my Harleys much more than the others, and have always made money when I resold them, I lost money with the others. I have to admit, the Honda Goldwing I owned was a great machine, but road to soft.

Rallyrr got it right when he said "Where Harley messed up was putting that hand clutch, foot shift, rear suspension, shock absorbers, overhead valves and oil pump on the best bike ever." I do enjoy riding my 50 pan over my FLHTC, foot clutch, tank shift, hardtail and all.

Jim

[JR]

My MY MY the old Harley is going to die folks still can't see it!! LOL

www.prb.org/Articles/2008/usbabyboomers.aspx

Now look at the present estimated Baby Boomer's like myself!! 78 million strong!! Hmmmm see what they're doing! Moving!! Yep! to where? Cheaper places to live! Myself I already live in a state that's 65% retirees and cheaper to live than most! Want to come around on a nice riding day and count motorcycles on a basis of how many of what in every 100 you see?

Real easy to see 100 motorcycles around here in a day and with spring coming will see a lot more! Worried about affording them? Living cheaper means you can afford the "NAME" the sound, like I've said before can hit a house from mine with a rock that own 3 of them, they don't even own a car!

Lot's of folks come through this state to enjoy the beauty and enjoyable rides, Arkansas opens it's arms to riders of all kinds, big tourism business and I'll make it easy on you with the counting, easily 8 out of 10 have the sound, the "Name" the ride! Very very few crotch rockets, may even be as many scooters as them! BTW they don't give them away either!

But just two days ago did pull up to the gas station in the little town of Oppelo about 10 minutes from Petit Jean State park and there was a group of Honda trike riders, 12 to be exact! Visited with them a spell great bunch of them retired baby boomer's all man and wife teams, beautiful fully decked out machines, too rich for this old boys blood!!

Did ask about how much one would set a guy back now and the cheapest one in that dozen was $28,500!! Makes a Harley look cheap!! LOL JRR

[allworld]

I'm thinking more along these lines.:


I think this is the type of bike that would attract a younger buyer, bring more people into their showrooms, and demand a premium price tag.

[JR]

Jan 27, 2010 10:17:31 GMT -5 allworld said:

I'm thinking more along these lines.:


I think this is the type of bike that would attract a younger buyer, bring more people into their showrooms, and demand a premium price tag.

[allworld]

it's not the actual vehicle, but the style and design concept.
Think out side the box.

Put a little work into the design, and development. I would like to see more concepts turned into actual products, HD style is getting a little long in the tooth.

[kz1000st]

That's not a GY6, it's a Honda 50-90-110cc. From this side it looks like the engine on my kid's 50cc mopeds or the MadAss 50cc or 125cc motors. I see a chain on the other side so it could run.

[allworld]

Ok now picture it with a 800cc-1200cc engine.

[kz1000st]

Go back and look at a Buell 1125R Allworld. Amazing bike. Had all the bells and whistles. If they had stayed in business it would have started to sell in bunches. It had everything a Ducati 1200 has plus reliability. It was winning in AMA racing. All the Buells were engineered to strict specs at the end.

Listen I've been around these beer guzzlers. The F motored guys think Sportsters are training wheels, the V-Rod was a Jap bike from the start. If you don't ride a V-Twin with a separate crank/transmission and pushrods-you're crap. They're selling over 200,000 of them now-show me the incentive for change.


Possible image problems? Need to attract a younger audience? I've seen plenty of young Harley owners with beer breath. Need for an water cooled motor? The Indian built 500cc Enfield is air cooled and fuel injected with a catalytic converter. They're submitting it to CARB to sell in California.

I've said it before and I'll say it again. The Victory is everything a Harley should be. How are they doing? Not bad for a twelve year old company, not great for the best built bike in America.

People would buy Harleys if they were still running side valves. It's all about the name on the tank.

[allworld]

Hello kz1000st: Your probably correct, and perhaps my thinking in not the right fit for HD.
Look a Piaggio, they have a several brands under their umbrella, they maintain the Classic Vespa, the Piaggio MP3, and the Gillera GP800, they own Moto Guzi and Aprilia all have there own following. HD has to expand into markets that, collectively cover a broader range of the market.
Yamaha sells more than MC's and scooters, Honda sells lawn mowers to private jets. Daimler sells Smart cars to Maybach.
I can just hear the chatter now if some one like Hyundai buys HD lock stock and barrel. Imagine what the Britt's think of Tata owning Jaguar.

[nickiemcnichols]

I agree wholeheartedly about the Victory motorcycle. Polaris does NOT have all its eggs in one basket, and the Victory is a better bike than the HD. My ex had one, that thing had more power, and was so comfy to ride.
I don't hate HD, heck, guys I've owned 3 of them. They all leaked oil, I almost broke my shin starting one of them, and parts literally fell off. I used to sit in my shed tightening everything the day before each ride.
But, I wonder, is HD big enough for a taxpayer bailout? Maybe the guys from HQ could fly their corporate jet to DC and ask for one...
I still say they're making a big mistake by not building a really nice scooter.

[als01seville]

In the Sunday paper there was an article about how the Baby Boomers are going for TRIKES due to their age, balance and disabilites. And that HD CANNOT KEEP UP WITH THE DEMAND. So when one a company says they are down so many percent over a previous year does not mean they are losing money. All that means is that they did not make the same amount of profit as the previous year. Unless of course they actually lost money, meaning their total cost was more than they brought in.

[kz1000st]

"Hello kz1000st: Your probably correct, and perhaps my thinking in not the right fit for HD"

History Allworld. you had to be there. In the 1960s There were basically English bike owners and Harley owners. (BMW owners were the lunatic fringe). Along came Honda. Yes they added new owners to the field but British bike owners looked at these bikes that didn't leak oil and burn out their electrics and said "Hey??Why am I putting up wth this crap?" Five years later the British bike Industry was toast. Harley was suffering from some of it too but got bailed out by AMF. Later on when things were better they bought themselves back. Since then they think they can do no wrong.
The idea in buying MV was to possibly build small bikes in Europe and sell them here. Of course they ditched that idea at the first sign of trouble. During the 60's they sold the Harley Sprint 350 built in Italy to compete with the Japanese-didn't. Not in the same league with a CB 350. Pushrod single that impressed no one.
Now they've painted themselves into a corner with a big, underpowered, pushrod motor that's become their hallmark. The only thing they can do is what BMW did to the boxer motor. Update it and make sure it looks the same.

[WarrenS]

I owned a 1950 Harley 125. In the winter I had to take the cover off the float bowl and fish out the piece of ice under the float. I put it back together and off I would go. It was heavy for its size and rather slow. Later on they took the battery off and ran it off a magneto with a lighting coil and called it a Hummer.

In the late '60s I had a Honda 305 Dream. All my friends had Harleys, Triumphs and BSAs. I would always wait for them to kick start their engines before I hit my starter button.