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Old 18th October 2017, 15:19   #1
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Default Harley-Davidson: Sales down, profits down

Jalopnik has an interesting discussion on this.

Quote:
Revenue fell 9% to $1.2 billion in the third quarter as the Milwaukee-based company retained guidance for shipping 241,000 to 246,000 motorcycles to dealers world-wide in 2017, down 6-8% from last year.

Harley, seeking to grow its customer base, has embarked upon plans to add 2 million new riders in the U.S. over the coming decade, and grow its international business to 50% of its total annual volume. The company is working to expand its appeal to women, minorities, young adults and city dwellers.

The challenge of the targets remained evident in the third quarter. Harley’s U.S. motorcycle sales dipped 8.1% to 41,793, while its international retail sales were off 4.6% to 22,416.

Harley said its U.S. market share increased in the latest quarter and its sales decline wasn’t as steep as the broader industry.

The company reported profit of $68.2 million, or 40 cents a share, in third quarter, down from $114.1 million, or 64 cents, the same period a year ago.
WSJ

If you read the Jalopnik discussion, you'll see that most people don't want to buy a Harley because:

- Of safety reasons (my reason too for not buying a Superbike). See how many commenters mention distracted drivers on the road

- Millennials burdened by student loans

- Harleys are too heavy and / or too expensive

- No connect with the brand which is known to have a following by rebellious types in the USA

- Poor handling and / or reliability

- They prefer motorcycles from other manufacturers

- How many of these are applicable to India? IIRC, Harley's India sales are down from what they were a year or two back

Another related discussion we'd had sometime back - link (USA: Motorcycle sales fall by 50% in a decade).
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Old 18th October 2017, 15:37   #2
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by GTO View Post
- How many of these are applicable to India? IIRC, Harley's India sales are down from what they were a year or two back
In India, the reasons would be different.

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Of safety reasons (my reason too for not buying a Superbike). See how many commenters mention distracted drivers on the road
This is valid is India.

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Millennials burdened by student loans
They are not the target customers of HD in India as it is expensive, IMO.

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Harleys are too heavy and / or too expensive
Harleys are as expensive as several other superbikes and that wouldn't deter a buyer in India. Weight remains a concern.

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No connect with the brand which is known to have a following by rebellious types in the USA
This would be valid as HD is relatively new in India and the connect seen in American market is not seen here. In India, Royal Enfield wins this round for sure.

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Poor handling and / or reliability
Not sure about this but cruiser will have a different riding style and handling limitation. Reliability could be a concern but more important is the service provided by the dealers. From what we read, the dealers of some other superbike OEMs are worse.

If this can happen to HD, something similar could happen to RE in future.

Last edited by GTO : 19th October 2017 at 11:43. Reason: Please QUOTE posts the right way. Correcting
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Old 18th October 2017, 17:01   #3
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Default Re: Harley-Davidson: Sales down, profits down

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- No connect with the brand which is known to have a following by rebellious types in the USA
.
That’s an interesting observation. Although in reality most HD owners are far removed from the stereo type Hells Angels guys. Although they might like/try to look like them.

Even in the USA these bikes cost a lot, more then family saloon by the time you spec it out. So actually a large part of the HD owners are people who have the financial means to buy themselves such an expensive bike as a toy/hobby. Which means your typical professional crowd of engineers, lawyers, accountants etc.

Why they all dress up in leathers and try to look like Hells Angels during the weekend is beyond me. Each to its own.

Although I have no statistics, my impression when we lived in the USA and when I visit, HD are mostly used for fun/relaxing cruises, i.e. not the daily commute to the office so much (except some hard core type perhaps)

The other thing, again no statistics just my own thoughts/observations, HD owners, certainly in the USA, tend to be not very young, to put it mildly.

Not to offend anyone, but your typical HD rider in the USA is a guy pushing 50/60 with a beard and big beer belly. As to my earlier comments, during the week he holds a very respectable, well paid job and during the weekends he dresses up in leather and rides his HD. It’s what they do, its what they like

Nothing wrong with it. I do the same, except I have no beard, (almost) no beer belly, but I used to ride my bullet during the weekend and now my classic cars again. Its’ what I do, it’s what I like

But somehow I do associate HD with older folks. Not sure how these sort of bikes appeal to the young (professionals) in the USA or India.

There was a huge HD plant just outside Kansas City when we lived there. They did factory tours, very interesting. Not much automation in those days. Heavily unionised. I learned a lot about working with Unions from some of the HD Management who were happy to share their knowledge/experience with the 'loony lefty" guy from Europe.

Although I don’t think I will ever get a HD myself, I must admit I do like most of their models. Not so big on the leather though.

Jeroen
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Old 18th October 2017, 19:03   #4
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Default Re: Harley-Davidson: Sales down, profits down

There was a similar and more detailed article which had come out a few months back (unable to locate that now) about how HD is seeing its sales plummet. This is a reflection of how youngsters entering the job market are facing challenges on multiple fronts i.e. expensive student loans to be repaid, quality jobs which are difficult to come by, uncertainty in global economic conditions and last but not the least, shifting consumer preferences which value 'experiences' rather than expensive acquisitions. This generation, especially Americans, have learnt the hard way how profilgate ways lead to economic misery. And lets face it, HD bikes are more a lifestyle that you buy into as opposed to a rider who is just happy to ride the crap out of his bike. At least in India, the Harley brand 'association' is an expensive proposition where many riders pay more and ride less. One needs to be infatuated with a brand to commit to an association where you are charged an arm and a leg just to be a part of a so called brotherhood. Many would prefer to spend that money on gear and fuel instead and enjoy what a bike is meant to offer, i.e. riding.

Moreover, as pointed out, HD bikes are not known for their handling and may be daunting to ride for a rookie, which many in their target audience are. If one wants to start riding, there are many alternatives which are nimbler, easier to ride and more importantly, does not cost a kidney to buy and own. I feel smaller, cheaper 'gateway' models are the way forward for them. Else the brand will also go the way of the stereotypical leather clad, bearded, badass Harley rider, which is gradually to extinction.
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Old 18th October 2017, 19:30   #5
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by hothatchaway View Post
One needs to be infatuated with a brand to commit to an association where you are charged an arm and a leg just to be a part of a so called brotherhood. Many would prefer to spend that money on gear and fuel instead and enjoy what a bike is meant to offer, i.e. riding.

Moreover, as pointed out, HD bikes are not known for their handling and may be daunting to ride for a rookie, which many in their target audience are. .
Very valid points. Iím far from an experienced biker. My 15.000 km on my 1975 Bullet in India are the only ones I have covered ever. Still, I do wonder how well HD are suitable for India. Maybe some of them, but certainly not all. I have been out on rides with the occosional HD. Speed bumps were certainly a challenge for certain HDs.

Also HD has it roots in the USA thus, American Highway cruising. Smooth straight road, no curves. I see HD as typical cruisers, whereas certainly in India you tend to be better off with something that can cope reasonably well with all sorts of road conditions. These days they do have some models that sort of cater for a more non_USA Highway environment

Of course, highly personal and therefor debatable, but I find HD just donít fit in India traffic and or roads. They look out of place.

i have a few Indian friends who own HD (the 750) and they are all very pleased with it. So far, they also seem pleased with the dealers?! But then again, although it has a HD badge, do we really consider it a HD?

Jeroen
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Old 18th October 2017, 19:33   #6
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Default Re: Harley-Davidson: Sales down, profits down

Not sure how insightful this article is.

It's only a report for last year which more or less tracks the global economic scenario.

The impact of the new Softail range and the resurgence of Trump's 'Murica is yet to be seen.

They have had worse days and better days, either way, just hope they keep rolling along.

Cheers

Ride Safe
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Old 19th October 2017, 09:23   #7
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Default Re: Harley-Davidson: Sales down, profits down

I will not agree with the 4th point, that is
Quote:
No connect with the brand which is known to have a following by rebellious types in the USA
Whoever is a bit passionate about Motorcycles knows Harley Davidson.
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Old 19th October 2017, 10:42   #8
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by Sheel View Post
I will not agree with the 4th point, that is Whoever is a bit passionate about Motorcycles knows Harley Davidson.
True, but the question remains would whoever buy a HD? This point is about Ďconnectingí to the brand. Itís one thing to know and or be aware of a brand. To actually buy a product of the brand is a very different thing.

Many manufacturers in just about all industries struggle with this very same topic. Especially with globalisation. Just because your brand worked in one country doesnít make it an automatic succes all over the world.

Jeroen
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Old 19th October 2017, 11:51   #9
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by ashis89 View Post
This is valid is India.
All the more so in India, I'd say! We have such poor road sense.

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Originally Posted by Jeroen View Post
Even in the USA these bikes cost a lot, more then family saloon by the time you spec it out.
Now that you mention it, yes - that is so true! In the USA, cars are much cheaper, but it's not the case with Harleys.

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Originally Posted by Sheel View Post
I will not agree with the 4th point, that is Whoever is a bit passionate about Motorcycles knows Harley Davidson.
The stereotype that Jeroen spoke of absolutely fits. Outside every Dunkin Donuts on the east coast of the USA, you'll see the same rebellious-looking, older Harley guys hanging out in a group.
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Old 19th October 2017, 12:54   #10
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Default Re: Harley-Davidson: Sales down, profits down

There might be various reasons why Harley is not selling enough outside US.

My European counterpart calls Harley's not a bike but "Raw Material".

I personally feel European's are more inclined towards technology and that is not what exactly Harley is all about.
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Old 19th October 2017, 14:54   #11
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by amit_purohit20 View Post
My European counterpart calls Harley's not a bike but "Raw Material".

I personally feel European's are more inclined towards technology and that is not what exactly Harley is all about.
interesting perspective and I agree I wouldnít call HD high tech or very innovative.

In general I found that Americans tend to have a very different approach to cars and vehicles in general. Itís much more functional. They feel Europe and some far east manufacturers are just sticklers for details.

A friend of mine ran a huge very successful car paint and repair shop just outside Kansas City. When he visited us in the Netherlands I took him to a buddy of mine who runs a similar shop over here. He just could not believe his eyes. Why would anybody put so much time and energy in fixing dents and scrapes to the level of perfection where it as good as when the car left the factory.

Same with American cars. Panel gaps until recently wouldnít even get noticed in car reviews because it just not that relevant for the average American. In our eyes it was all a bit crude and unrefined. But lets be honest, who needs suspension or good handling if you only cruise on highways or drive in huge rectangular city blocks? Comfort is the only thing that matters.

These days they have come a long way in bringing their cars up to (western) standards. Probably partly also due to globalisation. And when the Japanese and Korean imports are more reliable, cheaper, offer more features and pay a lot more attention to details and finish, even the most Nationalistic patriotic American will ultimately start to waver.

Again, it comes down to what a brand stands for, what it likes to be perceived as. Not sure the HD brand, freedom, highway cruising, rebellious is something that appeals universally.

Jeroen
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Old 19th October 2017, 18:42   #12
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by Jeroen View Post
To actually buy a product of the brand is a very different thing.
Just like me. Have been hearing about Harley's since I could decipher A for apple and I just don't know what models it has. Not my type of bike and I would never buy one.

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Originally Posted by GTO View Post
The stereotype that Jeroen spoke of absolutely fits. Outside every Dunkin Donuts on the east coast of the USA, you'll see the same rebellious-looking, older Harley guys hanging out in a group.

Last edited by Sheel : 19th October 2017 at 18:50.
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Old 20th October 2017, 09:57   #13
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Default Re: Harley-Davidson: Sales down, profits down

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Originally Posted by ashis89 View Post
This would be valid as HD is relatively new in India and the connect seen in American market is not seen here.

In India, Royal Enfield wins this round for sure.

"Chalk and Cheese".

The "PRIMARY" reason why Royal Enfield sells in thousands in India is because people "COMMUTE" on it. Price it more/at par with the Maruti Alto.. and then watch the fun.




Last edited by payeng : 20th October 2017 at 09:59.
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Old 20th October 2017, 10:16   #14
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Default Re: Harley-Davidson: Sales down, profits down

As far as Harley in India is concerned, they really failed to keep maintenance costs in check. Heard from an owner of the Street-750, that the front mudguard costs 21K, that is absolutely ridiculous for a made-in-India motorcycle. Even assuming that the mud guard was imported, 21K is way too much. Heck! even the large bumpers of cars wont match this pricing.
This cost of spares has been one of the reasons Indian buyers are shying away from even the affordable Street-750 variant.
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Old 20th October 2017, 10:39   #15
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Default Re: Harley-Davidson: Sales down, profits down

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As far as Harley in India is concerned, they really failed to keep maintenance costs in check
Provided they started of their quest for volume market share. I am not sure Harley ever wanted to sell volumes in the first place. Harley's 750 and 500 were IMHO meant to allow people to take baby steps into the world of Harley. They were not costly today, they have been costly for ever. The made-in-India Harley's are/were meant to maximize their bottom line and it did to an extent.

Harley Davidson is not for the common man who can stretch and buy a bike. It is for someone who does not mind buying and spending exorbitant money on beautification and accessories of that bike. He knows what he is getting into. Into the world of Harley and its hog life. So it is an informed decision and i would be surprised if he did not do that homework.

Quote:
This cost of spares has been one of the reasons Indian buyers are shying away from even the affordable Street-750 variant.
If 5L is affordable, people should not crib about cost of mudguard which one will probably change once every accident. Harley is losing its sales not because of cost. To me the options and variety the market is now throwing at Indian buyers are just too attractive and they come with better safety, reliability, smug value and most importantly the sporty feel.

At 10L one now has so many options and at the price of an affordable 750 one can stretch and get a N650 or ER6N. Ninja 1000 has basically changed the mind of 1 or 2 Harley enthusiasts to reconsider what makes sense when it comes to buying and owning a motorcycle in India.
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