Harley Davidson on the Ropes-News not good

By: James “Topfuel”Macecari

Harley Davidson is on the ropes. Is the Motor Company  starting to loose its grip on the market? According to many financial news sites, Harley Davidson is starting to cook the books, well continue to do so as it has so many times in the past.

“How many times will Harley-Davidson use this tactic to make its sales numbers? To me it’s suspect, and investors should be wary that things might continue to get worse before they get better.” (Source Motley Fool)

What is Harley-Davidson doing  shipping an overabundance of motorcycles to the dealerships, what could be wrong with that? Plenty, that’s because the dealerships still have an overstock of inventory they still haven’t sold. In essence, Harley-Davidson is cooking the books, this so the stock price doesn’t drop off. Why would this concern investors? If the company isn’t selling bikes, the company is losing financial strength and no longer a good investment.

I wrote “Harley- Davidson: No Longer King -Company in trouble” a few weeks back. Many were upset about some of the points that were made in the article, some were trying to give Harley-Davidson legitimacy, saying that “Harley has over 50% of the market share, they can never lose the title.” Others claimed I was bashing Harley-Davidson because I worked for the competition. No, in truth I’m just an independent blogger who rides a Harley -Davidson. No Conspiracy stuff against the company.

Harley-Davidson is in a position right now that mirrors the position they were in before the AMF sale. Strong market share, loyal customer base, and most important, being steered into the ground by corporate greed. Look closely when you walk into a dealership, what do you see? Most of a dealership facility is dedicated to clothing and accessories, be honest now, how many square feet of your local dealership is dedicated to actual motorcycle sales? How much of the sales floor is overstocked with used inventory compared to new inventory? Those observations can be very telling, the dealerships are making more money on used models then new. The market has become flooded with used products, meaning the new stuff has to wait.

This is the issue that Harley is trying to hide from investors ,when you don’t have an uptick in sales from the previous year, especially with it being quarter after quarter, people start to panic. Add the fact that Harley now has an American Company in Polaris (Whom already has a serious reputation in outdoor sports), strong competition from overseas companies like Honda, Yamaha, the market share starts to shrink. People no longer care about the “If you don’t ride a Harley, you’re not a biker”, individuals care only about personal preference and comfort, not an image.

All the news organizations that are experts in the field of financials say the same thing, Harley has to move from its pricing structure.

“But Harley’s been bucking the trend, refusing to give up the premium it charges for its bikes for the sake of market share. And as the past year proved, it lost share to rivals, even though it still does own almost half of the big-bike market.” (Source Motley Fool )

Notice it states, “Big-Bike Market”. This is a distinction that was lost on my last article. Many do not understand that it is only a class of bikes that  corners the market, it’s only one aspect of the motorcycle market. Why do you think Harley-Davidson came out with the smaller Sportster? Most of the market are not looking for a Bagger, they are not looking for a Fatboy, they are looking for a reliable bike to get around the city in, after all, most bikes are sold in major cities and suburbs.

What is my opinion on what Harley needs to do? First return to customer service, get the dealerships to rid employees thinking that if you’re not in there to buy a 20,000 bike, you must not be worth the attention. I hate going into dealerships for anything, I always go to the small independent shop, just because of that type of attitude. Another thing I would suggest is to concentrate on making something new, bring out a new class, change the line up a bit like they did with the 550s, and 750s. Finally, get back to your original customer base, the ones who stuck with you all these years, get the prices of the bikes back where the working man can afford them. Those suggestions are what most people who love the company want, something as simple as those suggestions could get Harley back on track. Will they do it? Probably not, they are now indebted to the RUBS and other investors.

To Read: Harley no longer king  (Click Here)

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