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Author Topic: Dealer closed due to unpaid bills.  (Read 1980 times)

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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #15 on: July 18, 2019, 08:14:30 AM »

Here's what I don't understand.

If the economy is doing so well, the best it's been in a long time, then why are sales lagging? Why might a dealer sell a bike to someone who doesn't qualify? Why does a dealer have to sell a bike to people who don't qualify in order to survive? Where are the people who qualify? There must be qualified buyers out there. Maybe the consumer has gotten wiser and would prefer to spend their money on a reliable Honda, than a grenading M8.

Where are all the folks with $30K in disposable cash ready to buy a new bike?

This is sad all around.
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Re: Dealer closed due to unpaid bills.
« Reply #16 on: July 18, 2019, 08:49:38 AM »


This is more and more common in our highly leveraged economy.  Working on the edge using other people's money can be profitable, right up until the bills come due and you run out of other people's money.  Don't forget btw that H-D also owns some responsibility for scenarios like this one.  They constantly pressure dealers to take bikes even if that dealer isn't comfortable doing so, and the Harley distribution system rewards those who take more bikes and punishes those who scale back.  Dealers who finally worked their way up to a decent allocation of bikes are loathe to give up any of that allocation, so they allow the pressure to override their business sense.  Then you have the easy credit the entire vehicle industry has been offering customers who really aren't the best credit risks, once again nothing new as the industry as a whole never seems to learn from past history.  In many cases the dealers share in the losses involved in failed consumer loans and repossessions, especially with the manufacturer's lending subsidiaries.

It's always sad to see these things, I've spent enough time in the auto business to have witnessed many such downturns and failed dealerships over the past forty plus years to realize these things will never be eliminated.  It's just too easy to become overextended, and it's too hard for many in the industry to recognize and admit to themselves they are in over their head.  Unfortunately it's the employees and communities that suffer due to no fault of their own.  I don't know of any fix for that.

Jerry
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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #17 on: July 18, 2019, 09:09:59 AM »

This is more and more common in our highly leveraged economy.  Working on the edge using other people's money can be profitable, right up until the bills come due and you run out of other people's money.  Don't forget btw that H-D also owns some responsibility for scenarios like this one.  They constantly pressure dealers to take bikes even if that dealer isn't comfortable doing so, and the Harley distribution system rewards those who take more bikes and punishes those who scale back.  Dealers who finally worked their way up to a decent allocation of bikes are loathe to give up any of that allocation, so they allow the pressure to override their business sense.  Then you have the easy credit the entire vehicle industry has been offering customers who really aren't the best credit risks, once again nothing new as the industry as a whole never seems to learn from past history.  In many cases the dealers share in the losses involved in failed consumer loans and repossessions, especially with the manufacturer's lending subsidiaries.

It's always sad to see these things, I've spent enough time in the auto business to have witnessed many such downturns and failed dealerships over the past forty plus years to realize these things will never be eliminated.  It's just too easy to become overextended, and it's too hard for many in the industry to recognize and admit to themselves they are in over their head.  Unfortunately it's the employees and communities that suffer due to no fault of their own.  I don't know of any fix for that.

Jerry

That's great insight into how dealers operate in this cut throat environment. However, it doesn't answer the question that if the economy is doing so great and people have much more disposable income, why are sales lagging? Why are sales being made to people who don't qualify? Why aren't people buying Harleys?

Why aren't people taking that all trickle down cash created by this booming economy and buying bikes with it?
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Haird

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Re: Dealer closed due to unpaid bills.
« Reply #18 on: July 18, 2019, 09:19:55 AM »

That's great insight into how dealers operate in this cut throat environment. However, it doesn't answer the question that if the economy is doing so great and people have much more disposable income, why are sales lagging? Why are sales being made to people who don't qualify? Why aren't people buying Harleys?

Why aren't people taking that all trickle down cash created by this booming economy and buying bikes with it?

Mark, one reason, and I know this is off topic but can answer your question, is that with the Affordable Care Act, the "disposable" income that most folks have or have gained with this better economy and would spend on bikes/boats/RV's/4 wheelers is now going to paying medical bills/high deductibles/premiums AND some employers charge more on premiums for "hazardous activities" like smoking, drinking, motorcycle/ATV riding so folks choose not to do these in keeping the costs down.  I'm not saying it's the main reason but it's a big one. 
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Re: Dealer closed due to unpaid bills.
« Reply #19 on: July 18, 2019, 09:33:49 AM »

That's great insight into how dealers operate in this cut throat environment. However, it doesn't answer the question that if the economy is doing so great and people have much more disposable income, why are sales lagging? Why are sales being made to people who don't qualify? Why aren't people buying Harleys?

Why aren't people taking that all trickle down cash created by this booming economy and buying bikes with it?
Harley has roughly 50 percent of the heavy duty motorcycle market. They have the most to loose. Harley has built so many bikes over the past 15 years the market is flooded with low mileage motorcycles, driving down prices. Competitor's are offering really good options. Indian, Honda, BMW, Triumph, Yamaha. All taking away sales, especially in the profitable touring end of the market. Many of these manufacturers are making gains year over year.

Frankly, Harley is not highly competitive if you compare features, performance and value.

Last, the Baby Boomers, the generation that created most sales is now getting old, many have stopped riding, stopped buying bikes and even died.



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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #20 on: July 18, 2019, 09:35:20 AM »

Mark, one reason, and I know this is off topic but can answer your question, is that with the Affordable Care Act, the "disposable" income that most folks have or have gained with this better economy and would spend on bikes/boats/RV's/4 wheelers is now going to paying medical bills/high deductibles/premiums AND some employers charge more on premiums for "hazardous activities" like smoking, drinking, motorcycle/ATV riding so folks choose not to do these in keeping the costs down.  I'm not saying it's the main reason but it's a big one.

Good point. I guess the thing to do is create more tax cuts for those with high incomes, the wealthy and businesses. This will create even more trickle down disposable income for people to buy motorcycles. Then dealers won't have to sell to people who don't qualify and then close up shop.

I can't speak for others, but if I was given a choice between spending money on a new bike, or paying for healthcare to keep myself or family members healthy and alive, I'd pick the health care. I know it sounds selfish and I'll admit it is.
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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #21 on: July 18, 2019, 09:37:29 AM »

Harley has roughly 50 percent of the heavy duty motorcycle market. They have the most to loose. Harley has built so many bikes over the past 15 years the market is flooded with low mileage motorcycles, driving down prices. Competitor's are offering really good options. Indian, Honda, BMW, Triumph, Yamaha. All taking away sales, especially in the profitable touring end of the market. Many of these manufacturers are making gains year over year.

Frankly, Harley is not highly competitive if you compare features, performance and value.

Last, the Baby Boomers, the generation that created most sales is now getting old, many have stopped riding, stopped buying bikes and even died.

Which goes back to my earlier argument, todays consumer would rather buy a dependable Honda than a  sumping M8.
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scottt

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Re: Dealer closed due to unpaid bills.
« Reply #22 on: July 18, 2019, 12:43:05 PM »

Which goes back to my earlier argument, todays consumer would rather buy a dependable Honda than a  sumping M8.
Honda is but one of the competitors taking sales from Harley. So is BMW with the K1600B or Bagger, the new Indian motorcycles, the Yamaha Venture, the new Triumph models. Lotta great competitors, way more today than 10 years ago. Harley is really not competitive in the touring line.

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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #23 on: July 18, 2019, 12:52:29 PM »

Honda is but one of the competitors taking sales from Harley. So is BMW with the K1600B or Bagger, the new Indian motorcycles, the Yamaha Venture, the new Triumph models. Lotta great competitors, way more today than 10 years ago. Harley is really not competitive in the touring line.

Are the other makers also held to the EPA guidelines? In other words if I buy a Honda/BMW/Indian/Kawasaki/Triumph and decide to change cams and "tune it", will it void the power train warranty like a Harley?

I wonder how much of that is driving HD sales down?
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Re: Dealer closed due to unpaid bills.
« Reply #24 on: July 18, 2019, 01:19:14 PM »

Are the other makers also held to the EPA guidelines? In other words if I buy a Honda/BMW/Indian/Kawasaki/Triumph and decide to change cams and "tune it", will it void the power train warranty like a Harley?

I wonder how much of that is driving HD sales down?

The EPA rules and warranty issues probably does have a bit of a impact but the better question is do you really need to tune any of the other brands?  The other manufactures may be under the same EPA issues but they are doing a VERY good job of making sure the meet the requirements as well as producing a motor that doesn't require "fiddling" to make it run right. 
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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #25 on: July 18, 2019, 01:45:35 PM »

The EPA rules and warranty issues probably does have a bit of a impact but the better question is do you really need to tune any of the other brands?  The other manufactures may be under the same EPA issues but they are doing a VERY good job of making sure the meet the requirements as well as producing a motor that doesn't require "fiddling" to make it run right.

Which circles around to what we talk about all the time, build specs and quality control. Are these other brands plagued with sumping, crank run-out issues, lifter issues and so on? I think not.

It looks like poor sales are being driven by several possible issues:

Buyers lacking disposable income due to their ACA payments in spite of a good trickle down economy. (debatable)
HD Design flaws and poor quality control that drive buyers to other brands. (verified)
A MoCo sales system that punishes dealers who can't move inventory giving them incentive to sell to unqualified buyers. (apparent)
An aging out market leaving a vacuum not filled by the next generation. (generalized)

Of all of those, the only ones the MoCo has any control over is design and quality control, and sales tactics.

Not holding my breath on this.
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scottt

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Re: Dealer closed due to unpaid bills.
« Reply #26 on: July 18, 2019, 01:48:54 PM »

Are the other makers also held to the EPA guidelines? In other words if I buy a Honda/BMW/Indian/Kawasaki/Triumph and decide to change cams and "tune it", will it void the power train warranty like a Harley?

I wonder how much of that is driving HD sales down?
As others have mentioned; the other brands with the exception to some degree Indian do not depend on performance enhancements to make power. They perform right off the showroom floor.

One example i know is the BMW K1600 B or bagger. Has a straight 6cyl engine. Produces 160HP, makes 70% of it's 128 ft lbs of torque at 1700 RPM. It's an amazing motorcycle to ride.  Features include clutchless shifting up and down, on and on. You'll never really want for more power. There is a minor computer performance upgrade available if you wish to delete the 130mph governor, giving you something like 170mph top speed. Crazy!

Bottom line, many of today's buyers want a bike to perform, ride and handle stock. Harley's competitors, again other than Indian to some degree, deliver!

Regarding the EPA thing, i don't  believe the other brand dealers monitor things the way Harley is. That said, there bikes don't need non compliant modifications. 

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Ironhorse

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Re: Dealer closed due to unpaid bills.
« Reply #27 on: July 18, 2019, 02:04:13 PM »

As others have mentioned; the other brands with the exception to some degree Indian do not depend on performance enhancements to make power. They perform right off the showroom floor.

Can't argue with that other than to say,..."Yeah but it's not a Harley",...LOL!!!. But none of this is anything new, the "mantle of greatness" was passed from HD to Japan and Germany in the 70s. So HD relied on it's loyal core of buyers who are now either aging out, or are too frustrated to want to have to deal with build and quality issues.

Monday - "Hey I bought a new M8 CVO!"
Thursday - "The engine sumped"

Makes a GoldWing and BMW 1600 look mighty appealing!
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scottt

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Re: Dealer closed due to unpaid bills.
« Reply #28 on: July 18, 2019, 02:24:20 PM »

Can't argue with that other than to say,..."Yeah but it's not a Harley",...LOL!!!. But none of this is anything new, the "mantle of greatness" was passed from HD to Japan and Germany in the 70s. So HD relied on it's loyal core of buyers who are now either aging out, or are too frustrated to want to have to deal with build and quality issues.

Monday - "Hey I bought a new M8 CVO!"
Thursday - "The engine sumped"

Makes a GoldWing and BMW 1600 look mighty appealing!
Your absolutely correct. Harley is depending on loyal riders that won't consider any other motorcycle. That's a declining pool of customers. Heck, i know of some 1% club members that purchased a BMW K1600 B. Even some of Harleys loyal customers are now buying other brands. They keep an older Harley and buy another brand for actual touring.

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Re: Dealer closed due to unpaid bills.
« Reply #29 on: July 18, 2019, 02:35:43 PM »

My next bike wont be a Harley
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