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Re: Is Harley

IF, and it's a big IF , demand for Harley's starts to soften. Couldn't Harley just cut it's prices by thousands of dollars and still make a profit and stay competitive? I mean, I live in Japan, and Japanese labor is not cheap. Yet the Japanese can churn out big twins at much lower prices. Furthermore, the Japanese build a lot of bikes in the states, and those bikes are cheaper than Harleys too.
 

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Re: Is Harley

It's fun, isn't it, to end pure speculation of what will happen in several years with "mark my words," knowing full well nobody will be reading it more than a few days from now --so it will never be proven that IMO you are mistaken. It's certainly mistaken to say "nobody" wanted them when they were able to keep from going down the tubes even through the dismal days of AMF. H-D has been making motorcycles (continuously) longer than anybody, almost a century now, and they didn't accomplish that by being purely a fad. Their popularity may swell and wane but they can, and IAL will, continue to prosper for a long long time.

FWIW all that growth in motorcycle sales has gone primarily to 2 companies: H-D and Honda. In spite of that I can agree with you that HDI would not be a growth stock I would pick for the next 5 years. Sales have got to slow down somewhere, but Harleys will not become dodo birds in our time. The guys who *really* love Harleys (I'm not talking about trendoid yuppies who buy them as a fashion accessory) pass that on to their kids before their religion!
 

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Re: Unless I missed something glancing at the 10Q...

One indication of slow Buell sales might be the advertisement I just read in Cycle World where Buell are offering 0% financing and no payments for 6 months on new unsold 2001 and older Buells from dealer inventory. This is not usually an indication of stong sales.

On the other hand, if the "salespeople" at my local HD shop actually knew how to sell something instead of just taking orders, perhaps Buell sales would be better. They must get paid commission only on the amount over MSRP, because they act as if the Buells in their showroom are just doorstoppers.

Harley-Davidson has a lot of room to absorb slowing demand. Heck, their transaction prices could drop 20% without affecting factory income when dealers stop charging premiums. I still have yet to see that around this area.
 

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Re: Unless I missed something glancing at the 10Q...

also it's pretty obvious from the 10Q that based on total percentage of sales, HDI could dump *every* Buell they make at reduced prices and it wouldn't have much impact on their overall financial picture. Buell is still a tiny piece of their pie.
 

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Re: What goes up must come down

The one thing no one in this thread seems to consider is the brand loyalty of posers... not the guys who buy the bikes but the guys/gals who purchase the jeans/boots/tshirts/jackets/etc. Harley may have a slowdown but they are not going bankrupt any time in the next 50 years. With the cash they've got on hand, the loyalty for bikes and 'sundries' and the (now displayed) ability to admit what they can't do and get help (ie they cant produce a v2 under 12000cc with more than 60 hp) to produce a good bike. The Vrod may not be everyone's cup of tea... er Jack D?... but it does prove that Harley will use their resources to produce bikes that people want.

Yeah, I don't like 'em cruisers too pathetic and buells too slow when compared with the best out there but the company? They're here to stay for a looooooong time.

Just my unducated two cents... certainly not sense!
 

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Re: Posing

Some people are posers period! Look around it's not a Harley thing. How many Jeep owners drive off road? How many people that buy $4,000 full-suspension mountain bikes won't ride them off a curb or try to bunny hop? How many posers have you seen boating lately? Now go to a Nascar race there are people posing there or to a PGA tournament, there are also people posing there. Some people pose it human nature.

Generally if you are worried about what someone else will think of you for what you ride, how you look or what you spend - you're probably a poser.
 

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Re: Unless I missed something glancing at the 10Q...

As a former Buell owner I can say that it is nothing more than a poorly made novelty Harley whose performance and handling (stock) can be seriously mauled by nearly any other sportbike in its class. When you finally get tired of its poor finish and average performance, and decide to sell it, you will learn that its niche market is really a chasm into which few venture - not "Harley" enough and, once again, a piss-poor performing sportbike that draws yawns from that market.
 

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Re: Unless I missed something glancing at the 10Q...

Obviously you're not one of the loyal following I was talking about. Most sportbikes produced in small numbers have terrible resale. Even worse resale value than Japanese big 4 sportbikes which are pretty dismal themselves. If you want decent resale get a metric cruiser; if you want by far the BEST resale get a Harley. Even members of a niche bike's "following" don't want to pay much for a used one because they know they don't have to! Only guys trying to sell one with a bunch of debt on it seem to think they're worth big bucks. Don't buy such bikes unless you can pay cash and afford to take some depreciation.
 

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Re: What goes up must come down

I'd seriously recommend that if this clown is your broker you think about an OLB. Dude, you compare EH and Titan to HD! You are really showing your ignorance of the motorcycle market and its financial performance.

First, EH failed because they could not produce a motorcycle at an adequate margin to cover their costs. i.e. - they generated negative cash flow

(around $2K) on every bike they produced and sold to dealers.

HD has great margins in this sector. Remember the gouging occurs at the dealer level not the MoCo. Demand would have to go away overnight for the company to feel an immediate impact to its pring (not likely).

Titan - does not even deserve a response.

Diversify - read HD's history. They used to sell motorhomes called Holiday Rambler and years back they used to manufacture bomb castings (this was after AMF). HD's stock was always somewhat depressed because of their diversity into things other than their core motorcycle line. The valuation multiples have all gone up since Holiday Rambler was sold.

With Harley's size and investment banking coverage dontcha think some young idiot investment banker tries to sell them a diversification strategy monthly? With the value of their currency they could easily buy Polaris, pay a huge premium and have the deal be completely accretive to earnings. Guess what? They won't and shouldn't. Most companies don't diversify they diversify. The MoCo has strong margins and has had strong predicatable growth. The MoCo needs to maintain that financial performance with the introduction of new "core" products like the V-Rod.

Don't make the mistake of trying to apply text book Economics 101 principles to Harley. You sound like some inexperienced retail (boiler room) broker with "what comes up must come down." Tell me why it must come down and to what level. How would curtailing HD's annual units to 170,000 a year affect their sales, margins and cash flow. Growth may slow, but to equate that to bankruptcy is ridiculous.

Read "Well Made in America" to learn why HD's management is completely different from what it was in the late 70's. Plus, HD is a public company so its shareholders (the ones that you think should sell) are scrutinizing the company which was not the case in the late 70's.

nuf
 

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Re: Is Harley

It had to happen. The people who were willing to pay $3,000 - $8,000 over MSRP are now owners of HD motorcycles. Others who may still want an HD motorcycle simply are smart enough to not pay these stealer dealers. The poor dealer attitudes, poor custmer service, poor maintenance work, poor public relations, poor everyting expected from a dealer has caught up to the consumer. Some who would buy yesterday may never buy HD because of how they have been treated at the stealers. It's both the stealer dealers and the HD corp. unwillingness to stop it, that has caused people to shop elsewhere. HD has been laughing at it's customers for years, but just might not have the last laugh. The paying customer will decide who is really in charge.
 

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Not all dealers are that way...

Sounds like you've experienced one of the opportunistic carpetbagger dealerships that have popped up (or been bought out) just to cash in on price gouging. IF you go to a dealership that has been around for decades when times were much leaner, and is still owned by the same family, they don't treat customers that way. They are friendly, provide good service, and have fair prices (which may mean a long waiting list as well, unfortunately). Some are even very interested in getting riders of any brand together for events that improve the public image of motorcycling and the cameraderie felt between all. Foreign bike dealerships rarely do that IME, though I'm not saying there aren't any. Stereotyping is ugly and inaccurate even when applied to Harley dealers. They are not all alike.
 

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Re: LimeSqueezr: Did you not notice HD´s butt got waxed

I ride to work daily with my Royal, thank you for asking LimeSqueezr. I also get lots of extra points for doing that in Caracas, Venezuela. Traffic is infernal and there is no respect whatsover even to the most basic rules.

Back to the question about HD valuation. There is a lot of misguided opinion out there "they sell everything they can make". In fact, the production is carefully adjusted to create the waiting lines. This is purely a marketing gimmick – there is technical reason why they could not increase the production, say, ten-fold.

The waiting line - vaseline tax - perceived invest grade valuation scheme works beautifully as long as the desirability factor is high. And it has been. However, now is the first time in history that someone beat them in their own low grunt game – and with such a resounding manner.

When you park your HD 80/88 in front of local diner, next to your friend´s VTX (this is assuming you belong to the ultra-liberals who can even have friends with jap bikes), the chicas will probably like your badge more – and the looks of the VTX. But make no mistake, anyone knowing anything about biking knows who´s got the beef.

cruiz-euro
 

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Re: LimeSqueezr: Did you not notice HD´s butt got waxed

Cruiz, as I've stated many times before, I don't own a Harley but am more knowledgeable of them than somebody in Venezuela since I live just a very short ride from where they're made and know individuals who work there personally. The bike I ride is not made there, nor Japan (my handle is a hint). I am NOT a die-hard HD fan (though I've owned a few, I've owned more Japanese bikes) my main "beef" is with people who post here who are so clueless about Harleys they might as well be from another planet but they think they know it all because of what they've read on the internet.

BTW whatever it is you slip your "chicas" to make them hallucinate that you are attractive must be some really potent stuff if it can even make them like the looks of a VTX!
 

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Re: Not all dealers are that way...

LimeSqueezer,

Sorry to burst your bubble - was a HD fanatic and owner (still am) and decided to see what the inside was like so took a PT job with a HD dealer. What a mistake - made me look at HD in a very different light (from legend to business). This guy survived the radical '70's, complained all the way to the bank about how he had to cash in now because he didn't know when the gravy train would end. All this while sending his daughter to medical school in NY. He only upgraded (and by upgrade I mean add a building, not the new glitz and glamour in the new HD dealerships) when HD forced his hand. His dealership is one of the old time ('under' his house). He will NOT SELL AT MSRP. His business plan: I'm near a an HD dealer that kills customers over MSRP, so I'll sell over MSRP but under the other dealer. Those new buyers looking for HD bikes and want them bad naturally scour nearby dealers and he gets his share of them.

While I'll give it to him for knowledge of the bikes, especially old ones, he's no better than the new 'gouger' dealer (like Mike's Famous). However, there are good dealers out there, as you mention, but you have to look and ask Q's. Making generalizations about the 'old time' dealers is doing so without factoring that America's economy is based on profit and what can I make. Money will make you do funny things....
 

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Re: Not all dealers are that way...

Thanks for making a good point, that even *positive* generalizations have their exceptions. He's unusual because most of the ones who were *just* in it for the money got out in the very lean years when there wasn't much being made by even the strongest dealerships, and it looked like H-D would fold altogether. When the price gouging ends (and most everybody agrees that will end someday even though H-D will survive) then he won't have the grateful and loyal clientele of the established dealers who just said no to "vaseline tax." I hope his kids are all out of college by then.
 

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Re: V-Rod

We all know how well that's going? I'd say very well seeing as I personally know 4 people that sold their Harleys and bought 3 Hondas and a Suzuki. Around here I see far more Hondas than Harleys. Now that doesn't mean that there isn't a lot of Harleys around here but it does mean they aren't being ridden. The rich kids can only by so many more bikes that they can't afford to ride. Its only a matter of time before Harley is in another slump and begging the government for help.

Now they COULD possibly get some management changes and become a reasonable company but they've been backing their "stealers" for so long I don't see that happening anytime soon.

As for the new V-rod. They can't claim "american made" anymore. So who exactly is this bike going to cater to?
 
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