Harley is a business.... MSRP? the salesman ask the owner what should I sell it for? the owner says as much as you can 
Why don't some of these high management car guy's tell us the mark up on a new car or truck?
As a retired management guy from the auto industry, I'll see if I can respond to your question. I don't keep up with this stuff as much as I did when I was in the business, but I'll offer the MSRP and Invoice data for my wife's 2010 Ford Edge as an example of a vehicle that is in the price range of late model CVO's, since I happen to have those items here in a folder for her car. Her Edge had a MSRP of $36,495, and the dealer invoice is $34,536, for a gross profit of $1959. The dealer (and I) also gets a 3% holdback, so let's say that would be an additional $1036 for a net of $2995 profit on a $36k vehicle sold at MSRP. Now let's take a $36k Harley. The dealer invoice would be approximately $28,800 and I don't know how much holdback, if any, they get after the fact. So the Harley dealer gets a gross of $7200 at MSRP on a vehicle with the same $36k MSRP as the Ford where the gross is $1959.
We always come back to one simple fact in all our discussions around here about why Harley can get away with the stuff they do. That fact is that while the automotive business is highly competitive, the Harley market isn't competitive at all. When you don't have any competition, you can charge whatever you want.
For some history, the auto business worked on an average dealer markup in the 20-25% range back in the 60's and early 70's, with higher markups on the lower volume luxury cars and lower markups on the basic models. There was no meaningful competition from outside the Big 3, and the Big 3 seemed to be happy enough with their slices of the pie to not undercut each other too much. Then the world and the market changed drastically in the mid and late 70's thanks to double digit inflation and gasoline shortages due to an embargo. As the manufacturers costs increased drastically, their sales decreased drastically due to sticker shock. They also started seeing a real influx of competition at the low end from the Japanese, which further restricted the ability to raise sticker prices. The answer was to reduce the rate of sticker price increase by decreasing the dealer markup. Those 25% markups were cut in half, and then over the years cut again. Add in to the mix all the added costs for mandated (and needed IMHO) safety standards and economy standards which placed even more pressure on prices, and we have reached the current state of affairs whereby prices keep escalating and margins keep getting smaller on the products in the most competitive segments of the market. For those of us old enough to remember all this stuff, this is the period in history when dealerships started selling all kinds of add-on crap of no real value at jacked up prices to try to make up the difference in profit margins under the new business climate and lower markups. Things like $500 paint protection packages for instance, that cost a dealer about $20. Same for interior protection packages, tape stripes, etc..
Anyhow, to make a long story short, Harley and it's dealers will continue to rape their customers until the heavyweight motorcycle market in the USA becomes truly competitive. Since the early 1990's, any Harley dealer who didn't become a multimillionaire had to be the worst business person in the world. You would think they could be satisfied with the huge profit margins they enjoy relative to most other retail business, but as we all have learned over the years there are many greedy folks who will never be satisfied until they screw every single person walking through their door out of every nickel they can.
Jerry
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Topic: After 27 years I changed (Read 15580 times)