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Cruiser Market Saturation?

Or or people starting to tighten their budgets and compromising by getting less expensive metric cruisers? Except for the serious hardcore HD-or-nothing group, there are a lot of great choices for cruiser riders out there. I was in an HD shop last weekend and they wanted $23K to preorder a V-Rod. I think list price is $16,999. Nice bike to be sure, but gouging is gouging. I think the slow economy, market saturation of cruisers of all types, and the consistent over-pricing by dealers will lead to a softness in the cruiser market. HD will take a big hit, seeing as how they are still the least bang for the most bucks. Can or will they ever produce a big-inch bike for under $10K? I'll bet they're working on it. I hope they are working on it.

Bill R

www.greatoldbikes.com
 

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Slowdown AND Product Line

Maybe Harley should consider branching out. I don't want a cruiser, and may never want a cruiser. Chances are I would never consider a Harley, because they don't build anything but cruisers. A triple is fine, and I have ridden fours for years, but have no interest in a twin, especially a lumpy one. I would consider a Harley, but Harley doesn't make anything that I would be interested in. That includes Buells, even thought they are intriguingly radical as they are, because of the engine and the transmission. I wish Harley made a bike I would consider, but they don't. I don't think I am alone, and I don't think that the cruiser niche will grow forever.

The slowdown makes the situation worse, but lack of product line breadth is eventually going to catch up with the Motor Company.
 

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Chances are, things must be slowing down for H-D to some degree. The economy is slowing down and discretionary spending is always the first victim of that situation.



The gouging of customers cannot be totally placed at the door of H-D. Its dealers certainly share a good portion of that blame. They have enjoyed a market that was robust and often over-enthusiastic, with no "sunset on the horizon" for sales/profits.



I have owned three H-Ds, all bought used, during the early 90s. Do I love them? Yes. Do I love the Motor Company? No. They're not lying awake at night, worrying about my financial health any more than I consider their future in a slowing market. The Japs will always have a contender to the H-D image. I admire their tenacity and patience. But at the end of the day, they both sell an image. The only difference is the cost to buy in to that image. Right now, H-D is very costly. What you get isn't measured on the spec sheet. If it was, most people probably wouldn't buy them at the current pricing.
 

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Hard to say... We'll have to see if Harley's market share falls or if the lack of optimism is the belief that 1) the market for motorcycles will not continue to grow due to the sluggish economy, or 2) that Harley sales will begin to represent a smaller portion of a still growing market. I would guess the former rather than the latter. At the same time, Harley has been increasing supply at an amazing rate for the last 10 years; at some point that growth was going to have to slow down. Part of that increased supply means more motorcycles on the dealership floors at MSRP.



One possibility is that people that entered the market on Harleys now want something different. Is that number large enough to offset those moving to Harleys from other brands? Who knows. It would be amazing if Harley could sustain the same growth they have since the mid-80s. I can't think of many brands that have/could.



 

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Re: Cruiser Market Saturation?

A big inch bike for under $10K? They did that way before anybody else did. And if you don't consider the Sportster 1200 "big inch" enough because it doesn't weigh enough, they could do a lower-profit Dyna decontented the same way a base Sportster is for under $10K any time they feel the need to. No development needed. People wanting to customize would buy 'em like hotcakes just like they do 883's that don't even come with a rear seat. But as long as the factory decked-out Big Twins are selling well they've got no reason to do that.
 

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Predatory dealer practices will eventually hurt Harley Davidson. For its part, the motor company has been content to sit on the sidelines and watch this occur. While I presently own a pumped up Dyna, my next bike will not be a Harley. Dealer practices are the reason that I just can't bring myself to purchase another Harley.
 

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If other Harley buyers have had the experience that I have had then I can appreciate a reduction in sales. My 2000 Harley has left me on the side of the road twice for the same problem. They had the gall to charge me for it the second time even though it wasn't fixed right the first time. Add to this a lying dealer and the politics envolved in even getting a new Harley then its not worth the hassle. After waiting over a year for a Softtail Deuce I just gave up and bought a new BMW. I'm glad I did because the BMW turned out to be a real surprise. Really a much better engineered bike than the Harley. One thing I never understood was why Harley ships their bikes all over the world but makes their own countrymen wait forever for a machine.
 

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Buell

The Buell division is just what you are talking about- Harley branching out. This will be an interesting year for Buell, as we will see haw the new Firebolt holds up on the street and the track, and if they can make enough to satisfy demand.

You can bet your boots that a smaller, lighter, cheaper-to-make liquid cooled v-twin motor is in development to replace the sportster as well as power a new generation of Buells, which will deprive a lot of guys like me of the excuse to not buy American. Think SV650 with fat grips.

In 1995, I test rode an S2 and thought that Buell would have some great sportbikes in 10 years- looks like we're on our way to seeing that.

Another realm is the dual-sport/off road bike. Harley has some experience with this segment, as they built several thousand bikes for the Royal Army. This is a category nobody has considered yet- the Dual Sport Cruiser- a lightweight single with plenty of torgue and some of the groovy 21st century style of the V-Rod. I think it would be big with the huge population of folks who live in rural areas and need functional, cheap off-road vehicles but would love to "buy American". Laugh if you want, but it's a niche Harley could exploit if they wanted to.
 

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Here's the way I look at it.



One, the economy is slowing. That takes a hit on what people are willing to spend for toys. Boats, vacations, cycles, et al always see a hit at the start of a downturn.



Two, many of the folks that could and would buy a Hog have. Demand for HD's is peaking. With that HD will have to shift from getting new customers (not a problem in the recent past) to keeping current customers (definitely a problem with HD's dealers rep).



That leads to three. HD introduced many new people to motorcycling to this past decade (thanks HD!). The problem is that those folks have owned their Hogs for several years now and many of them want something different. Something like their friends Goldwing. Or that guy down in Marketing's Futura. Or that chick with the FZ-1 who scoots by at 8:38 each morning on the way to work.



This desire to try out different bikes will affect HD shortly because of their narrow product focus. Will it kill them? Nah. After all, how many guys on a CBR 600 have thought, just for a moment, I wonder how I would look on a Fat Boy? But Honda makes a line up of cruiser's to sample from if you want to try that kind of bike. HD doesn't give you that choice.
 

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I think the economy is certainly a factor, and the "shopping for a bike" segment of the riding public is increasingly better informed; thus, more deliberation and discretion is evident in the "decision to buy" process. An educated market raises the bar for all manufacturers. I see evidence of a slowdown in HD dealers' showrooms - unsold 2002 models (and the occasional 2001 remnant) gathering dust and fingerprints fairly consistently. It's becoming a common sight to see any number of Big-Twin models (not just Sportsters) languishing on the floor. Another indicator is the "used/formerly owned" motorcycle market; prices are dropping, and trade-in offers (what the dealer will give for your old bike) are almost insulting. Ask a lending institution about loan terms for a new (or used) bike - that can be a rude awakening. Admittedly this is not a favorable phase of the economic cycle, but I think other factors may be significant - and may still be considerations when the economy improves.
 

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I agree with you, Heronboy, Harley simply does not offer a diverse selection of motorcycles. They have 3 basic abilities: the cruiser, being the Sporster, the Dyna, the Softail, the VRSCA, and their variants; then there is the tourer, being the Electraglides, Road Kings, and the few variants there; then you have the sporty Buell models, who are cursed by trying to compete with sportbikes while using a cruiser motor.



Sure each bike they have may differ, but their functions remain the same.





I am sure there are going to be some people who think "harley only makes cruisers, crotch rockets are for japanese companies." But, if some of these folks would do a little research into harley's past, in other words further back then 10 years ago when they learned harley cruisers were the "in" thing to be on, Harley made sportbikes. Into the Early 30's, the harley/indian rivalry was the Honda/Yamaha rivalry of today.



I think it would be good for harley to back to its roots, from 70 years ago when they were a company proud of their engineering prowess. They used to push the envelope. Motorcycling still needs the pushing of the envelope today, and i think that japanese progression has stagnated enough that harley could jump into a new market dominated by the japanese and do well through original thought and design. Make a true sportbike under the Harley name that is cutting edge, competitive in the top racing series, and make it for sale at a competitive price (right now competitive would be around 17 grand, being competitive with Ducati, which is similar to harley in its "mystique" and reasons for people to buy it)



I think this would expose harley to a much larger consumer group, and beside that i think it would invigorate their entire line of motorcycles. This way harley could have something to offer to the guy in marketing with the Futura, or the chick with the FZ-1.



And what about Buell? Buell seems to have put enough of his philosophy into streetbikes, so let it stay that way. let the Buell line use variations of a Harley sportbike motor to power badass, ballsy STREETBIKES. Think Firebolt on roids, and sport tourers like the ST, but with 130 rwhp and 90 lb ft in a bike the size of the Ducati ST4s. This way the strong racing recognition would be to Harley, not Buell, and would truly be going back to the Harley motor Co. of old.
 

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I live in Greensboro North Carolina. If you check the classified in our local paper, you will find 50 to 60 Harleys for sale and maybe 10 to 20 bikes of Japanese, Brit, and Italian origin. The sale of the Yuppee fashion accessary "Read Harley" has slowed. Most of the Harleys for sale in my area range between 17k to 25k. The average miles on each machine is between 800 to 1500 miles..... I just ordered a Yoshimura RS-3 race system and EMS engine manager for my 2000 GSXR750. I will not be selling any time soon. Why would anyone pay that much money for a bike then turn around and sell it. With all the used Harleys on the market, The "Company" may have a difficult time moving units. Good Luck Yuppee Harley.
 

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I dunno which is the cause, but it might be a good thing for Harley fans. Maybe a lower demand will help bring prices back down nearer to MSRP. This wouldn't hurt HD, just the dealers that inflate prices... At any rate, they will always have somewhat of a market to those that will buy just because it is an HD, or American, or both (regardless of actual quality).
 

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For a good-sized, nearly 100-year-old company, boosting your earnings 26%, as HD recently announced, is a tough act to follow. They're probably just guiding the analysts to not expect the same kind of growth next year. Of course, I haven't heard the conference call, so what do I know?
 

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I just purchased a Harley and I can say personally it will probably be my last. Who really wants to sit on a list for 2 or 3 years just to be rewarded by paying retail or about $1,500 over retail for a motorcycle. Yes, you can probably find one on the floor at a local dealer. Guess what, just for finding the bike you want, you win the prize. You get a full lubrication and in addition a good butt ramming for paying upwards of $3,000 to $6,000 over retail.



It's my personal opinion that there are bikes too numerous to mention which are as good and most better, that are available without the wait and the price ram job. Is Harley slowing down? It is in my household!!
 

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$20k discretionary purchases are the first victims of a slowing economy. They're also the first thing to get sold for hard cash in times of household belt-tightening. This means reduced demand, as well as a glut of used bikes in Cycle Trader. H-D's increased production capacity doesn't help, either.



I don't think the explosion of new brands and models is to blame. Last summer at WSB in Monterey, I noticed there were very few bikes with "character", because most of the bikes were late-model. Everyone who wanted a new bike bought one in the latest economic boom.



Most motorcycle manufacturers have kept supply in synch with demand and economic conditions, or are a small piece of widely diversified corporations. H-D has built capacity to meet unsustainable levels of demand. Their only two products are motorcycles and licensing their brand name...and the latter is very difficult to market without the first.



Tough sledding ahead for The Motor Company.

 

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Harley is reaping what they have sown. Since the bail out they have treated the buying public as though they were doing them some kind of favor to sell them a bike for 20% over MSRP. Well, screw them. This whole Harley thing was bound to collapse when the "rugged individualists" figured out that 400,000 others had the same bike. It's been 20 years since guys named "Spider" and "Hombre" have been able to afford one of these overpriced motorcycles, and they are the ones who created the mystique. Frankly, if the middle-aged investment bankers and lawyers stop buying, maybe Harley will be forced to make and sell bikes for all of America instead of the fiscal elite. Personally, I wouldn't give them the steam off my ***** no matter what the V-Rod looks like.
 

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I think Harley will show a slow down because of a couple of factors. One is that they

do not really have a low displacement cruiser to compete with the Jap cruisers.

The sportster is a bit of an enigma in that it is not really a cruiser so there is a little

bit of a hole in Harley's market. Also when those small displacement buyers want to

move up they may stay with a previously good experience and never consider Harley in

their future choices. Second is that when people have to pay over retail I think it really

bothers them so much that it will turn them off to the brand all together. All that being

said it's something I think is corrected simply by introducing a new frame for the

sportster motor or even an entirely new bike. As far as the paying over retail thing goes

I am allready seeing Harley's advertised for retail which is probably a result of the slowing

of the economy. One last thing. I currently have a cyclone which I am very happy with and

find the maintenance very simple to perform. 9000 miles only one problem occurred.

Oh by the way has anyone heard any rumors about Harley replacing or implementing

major changes to the sportster line ????
 
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