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[amigo Jorge]

More sales trouble for Harley-DavidsonPosted Jun 09 2009, 04:23 PM by Kim Peterson Rating:  Filed under: Kim Peterson

Spring is the most important time of the year for Harley-Davidson (HOG). It sells about a third of its bikes in April, May and June, analysts say, as the weather warms up and bikers itch to hit the road.

After the horrible year Harley has had, I can only imagine the company was hopeful for a miracle this spring. That didn't happen. Analysts at UBS say retail sales at Harley plummeted 35% in April and May, according to Barron's.

And so Harley's problems continue. Americans still love their motorcycles, they just don't love brand new Harleys. Here are the problems the company faces now:


--The used motorcycle market does a brisk business.

--Harley buyers are getting older. Only 12% of buyers are under 35.

--Harley offered no-money-down financing to subprime buyers who either couldn't or wouldn't repay their loans. As a result, its financing arm is in trouble with delinquent loans and credit rating concerns.

--The company has cut back shipments to retailers in hopes of bringing down inventory. Harley also had to close plants, lay off employees and cut production this year.

And the share price? I thought it was in recovery, but the price has been sliding since the beginning of May. Last year at this time, shares were nearly $40. They plunged below $9 in March, bounced back above $20 in May, and these days are lingering in the $15 to $17 range.

Friday, Citigroup cut its rating on Harley to sell. Barron's thinks the stock may have topped out in May. 

[Brinks]

Interesting, all of the dealers I have spoke to in the Chicago area have reported better sales than last year, in fact, most of their floors have quite a bit a space for more bikes.  Maybe Kim Peterson rides a HONDA 

[ultrafxr]

Yeah, I don't get it.  My dealer says his sales are good.  So there is some disconnect or he is just putting up a good front not wanting us to know how bad things are.  Time will tell but the showrooms see less busy than in years past.

[grc]

I've only stopped in at three dealerships recently, but they all had more bikes sitting on the floor than I can remember in the past 15-20 years.  And don't forget, many of these dealers have bikes still sitting in crates in the warehouse, in addition to what you see on the floor.

There are no doubt some areas of the country where the well heeled haven't felt the effects of the recession and they continue to buy overpriced toys.  So it wouldn't surprise me to find some dealers doing pretty well, just like some auto dealers continue to do well.  But the overall industries, bike and auto, continue to be in the dumper.  Dealerships which have to rely on the average Joe are hurting, because even if Joe still has a job he may not feel like risking $20k-$30k until he knows he will still have that job next week.  And unlike the wealthy dudes, Joe probably needs financing and that is still a big problem.  Easy credit is dead, at least until this all blows over and everyone forgets how we arrived at the big recession in the first place.

Jerry

[BillH]

Talked to my sales guy, who is also a friend, and he said their sales were off by 30% in April and May.  He has been their top salesman for years and now he is looking for a part time job. This is a large dealer in Austin.

Bill

[JCZ]

It's not looking to good here in Nor Cal, either.  The four dealerships around the Sacramento area all have motorcycles out the door and no traffic going in the door.   It's not looking good.  And the lines at the parts counters are gone, too.

[charlie]

Around here harleys are selling as well, that reporter must be a honda rider.

[skreminegul07]

My daughter is in sales.  They had a May that was better than last May.  April was about the same.  They just got sent another unexpected allotment.

[JeffsHogPen]

I spoke to a Salesman at Cajun H D. He said sales were a little down but he had more cash buys than he had before. Everything is down. so we all just have to make it through this down turn and get by. I took a 12% paycut in March. I did not like it but I still have a job.

[Sierramadre]

Harley doesn't know how to retail their products in a down market.  They've had their way for the past decade without any real competition- basically selling every bike they could produce at full list price. Now the world has changed and Harley is still operating with the same old arrogance.  No owner loyalty program. No incentives for first time buyers.  No conquest program. No special financing. No discounts for repeat customers. Lousy customer service and inept salespeople.  Just the same old 'if we build it, they will come' mentality.  They better wake up soon or the game is going to be over.

[SBB]

Harley doesn't know how to retail their products in a down marketHarley has a great marketing department. IT'S A DOWN MARKET. Harley is up there with Coke, Nike and Budwiser in knowing how to market. How many people you seen with Coke, Nike or Budwiser tattoed on their arm or chest?.  They've had their way for the past decade without any real competition-NO COMPETITION? What is a goldwing, a venture, a voyager or any of the Beemers? How about the Shadows or the Vulcan's?  basically selling every bike they could produce at full list price. Now the world has changed and Harley is still operating with the same old arrogance.  No owner loyalty program. No incentives for first time buyers.  No conquest program. No special financing. No discounts for repeat customers. Lousy customer service and inept salespeople.  Just the same old 'if we build it, they will come' mentality.  They better wake up soon or the game is going to be over.

OK, after 106 years lets count the Motor Company dead.
They are a bunch of idiots that have been selling us crap for 106 years.

WAIT, in order to sell there has to be buyers.
If it's really that bad of a product then who is the real idiot?

The entire world is experiencing recession including Harley.
I'm even thinking of lowering the 01 SERG price to $72,500.00 for AJ.
We all must make sacrifices to get by.

JMHO

SBB

[Rooster]

OK, after 106 years lets count the Motor Company dead.
They are a bunch of idiots that have been selling us crap for 106 years.

WAIT, in order to sell there has to be buyers.
If it's really that bad of a product then who is the real idiot?

The entire world is experiencing recession including Harley.
I'm even thinking of lowering the 01 SERG price to $72,500.00 for AJ.
We all must make sacrifices to get by.

JMHO

SBB
[/quote
 

[FLSTFI Dave]

Harley doesn't know how to retail their products in a down market.  They've had their way for the past decade without any real competition- basically selling every bike they could produce at full list price. Now the world has changed and Harley is still operating with the same old arrogance.  No owner loyalty program. No incentives for first time buyers.  No conquest program. No special financing. No discounts for repeat customers. Lousy customer service and inept salespeople.  Just the same old 'if we build it, they will come' mentality.  They better wake up soon or the game is going to be over.

I guess  you did not see the full MSRP for a 07 or new sportster on trade in for a new big twin?  They ran that from Dec until the end of March.  I thought it was great to get 500 more for my wifes 2007 883 Low than I paid for it new.  Not to mention the good chunck of money they took off the 2009 FLSTC Heritage I traded for it for the wife.  Seems to me that was showing lots of customer loyoatly, full MSRP for the trade, and below MSRP for the new 09.

I also got a very good deal on my 09 SERG, and 20% off all the accessories for it. 

Two of the sales men I know had record sales months in both March and April.  They were alloted 4 SERG for 09, but to date have sold six.

I do not think the problem is the MoCo.  I feel it is in how some of the dealers chose to do business.  I have four dealers (different owners) with in 75 miles of me.  The one I do business with is not hurting and is doing very well.  But they treated customers good even when business was great.  I am thinking one of the other dealers will fail this year or next, they are not doing well.  However they treated customers like crap when business was booming.

[RedDevil]

This is definitely a sign of the times.  I was recently down in Ft. Lauderdale for a conference and I spend one free morning I had running around to the local dealers.  Of the four dealers within 25 miles of my hotel, three were owned by Fat Bastard.  I don't know what he's still selling his SE's for at Destination Daytona, but he had two SERGs at every dealer down there and they were asking $32K for them.  Even the evil FB sees something?   

   

[Cvostu]

I think I remember that he was asking 9k over MSRP for the  CVO back in March at Bike Week. I did remind the sales guys that there is a recession going on. They just nodded their heads and replied "hey, I just work here." What's he thinking now I wonder.