More Bleeding at HDMC

Discussion in 'Indian Motorcycle General Discussion' started by Baldhead_J, Apr 21, 2017.

  1. Baldhead_J

    Baldhead_J Gold Member
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  2. Drydock

    Drydock Well-Known Member

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    Folks, please don't let this forum become as HD obsessed as the other!
     
  3. Baldhead_J

    Baldhead_J Gold Member
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    Fixed it for you. Now go read the article, douche.
     
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  4. sidecarsam

    sidecarsam Gold Member
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    Looks like Indian might be taking a Bigger bite than HD expected. :cool:
     
  5. PakRat

    PakRat Well-Known Member

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    “We recently announced our plan to build the next generation of Harley-Davidson riders globally".

    When you have a CEO who concentrates on building riders instead of motorcycles, there's a problem. At the same time, he wants to launch 100! yes 100! new motorcycle models. Is there any manufacturer anywhere with 100 models, not counting what they already have? Does this guy even ride a motorcycle? After he left MV Agusta, that company increased sales by 50%. I think HD has the wrong guy at the helm here.
     
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  6. sidecarsam

    sidecarsam Gold Member
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    Sounds like it. :confused:
     
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  7. ndncowboy

    ndncowboy Bronze Member
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    Drydock said: ↑
    Folks, please encourage me to contribute substantive and relevant material in my posts.
    Fixed it for you. Now go read the article, douche.

    But please don't quote someone and change what they said. I know you sorta made it clear here but I've seen fights start from this stuff. If you want to make a statement, make it. Own it.
     
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  8. Baldhead_J

    Baldhead_J Gold Member
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    Sometimes you gotta fight. You do you.
     
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  9. Baldhead_J

    Baldhead_J Gold Member
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    I do think there's a problem with cost in the market segment. We've reached the point where a new American touring motorcycle is the same price (or MORE) as a budget economy car.
     
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  10. car54

    car54 Well-Known Member

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    Who?
     
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  11. car54

    car54 Well-Known Member

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    True, but our rides are way more lush then that budget economy car.... ever tried to shove 6'3 & 260 into a Kia Forte? It AIN'T pretty my friend LOL...... Nope, ride my bike unless it rains so hard I can't, then borrow my wife's chrysler 300 hemi (that's right, only one car family ... ride my bike EVERYWHERE).
     
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  12. Baldhead_J

    Baldhead_J Gold Member
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    I agree with all of the above. You're a bigger than average dude riding a more expensive than average motorcycle.

    My point is that there is a barrier to access that's pretty high.
     
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  13. car54

    car54 Well-Known Member

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    Fair enough. It is very true I am sure that the price of the Chief, Chieftain, and Roadmaster are significantly higher than what a lot of first time riders like my son can afford. Would love to see him on an Indian but on his early 20's budget finishing up senior year of college, he is on 2013 Suzuki M90. He likes it a lot and is perfectly happy with it being that it only cost him 7200 brand new a couple years ago so I can see your point for sure.
     
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  14. HINK

    HINK Well-Known Member

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    Saw a new scout 60 today at the Ft Hood dealership for $8960 so not a whole lot more than your son paid for his Suzuki. Tell him to save just a little bit more and he can join the tribe!
     
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  15. Baldhead_J

    Baldhead_J Gold Member
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    The numbers are bleak but Rebel does a good, but dramatic, job of breaking them down:

    Harley Holding On
    July 31, 2017
    [​IMG]
    Harley Holding On | The Aging Rebel

    The headline in the Harley-Davidson press release two weeks ago said “Company Delivered Strong Margins, Retail Sales Lower Than Expected.” What that means is that sales of Harleys continues to decline and the company is trying to compensate by squeezing ever more profit out of every sale.

    “We are pleased with our ability to deliver strong margins in the quarter despite challenging market conditions, particularly in the U.S.,” said Matt Levatich, president and CEO of Harley-Davidson. “Given U.S. industry challenges in the second quarter and the importance of the supply and demand balance for our premium brand, we are lowering our full-year shipment and margin guidance.”

    The Aging Rebel predicted the motor company’s demise in 2010 and again in 2014. Somehow, someway, the company keeps putt, putt, putting along. Here is how the most iconic American brand is doing in mid-summer 2017

    Numbers
    The company makes money from two, main profit centers. The first is sales: The sale of motorcycles, of genuine Harley parts and accessories and of genuine Harley branded crap like tee-shirts and shot glasses. The second profit center is the interest earned from lending you the money to buy the things Harley sells. That part of the business is called Harley-Davidson Financial Services. That was the Harley business that went south during the great financial crisis of a decade ago.

    Last year Harley had motorcycle sales of $4.122 billion. It sold $843 million in parts and $285 million of genuine Harley bandannas and so on. Through the end of June, Harley sold 82,984 motorcycles in the United States. That was about eight percent less than the first six months of last year. There are 245 million adult men and women in the United States. About one in 3,000 of them bought a new Harley in the first half of this year.

    Worldwide, Harley sold 136,437 motorcycles in the first half of the year and that is down about six percent from last year. Financial Services earned about $361 million in the first half of the year and that is down slightly from last year. The company has about a billion dollars in cash and liquid assets which is about $100 million more than a year ago. Harley credits the $100 million to “operating activities.” Harley expects to ship 241,000 motorcycle worldwide this year which is 19,300 fewer bikes than in 2016. That’s a sales drop of about 7.5 percent. Sales of genuine Harley general merchandise is down almost 20 percent so far this year.

    Shrinking Market And Share
    The survival of Harley-Davidson boils down to two facts. First, the market for motorcycles is shrinking and at the same time competition from Indian and other motorcycle manufacturers is shrinking Harley’s share of that market.

    An investment management and research firm named Alliance Bernstein downgraded how they thought the motor company would do in the next five years. Alliance Bernstein noticed the obvious. A decade ago, at the end of the Harley Boom, the number of motorcycle riders was growing by three to five percent a year as aging boomers cashed out the surplus equity in their homes to buy grotesquely overpriced Harleys. Now an Alliance Bernstein analyst named David Beckel thinks, “If our back-tested model is predictive of the future, we expect rider growth will dip into negative territory in 2017 and stay in negative territory for at least the next five years.”

    “Our data suggests the younger Gen Y population is adopting motorcycling at a far lower rate than prior generations. Gen Y’s are aging into the important ‘pre-family’ cohort of riders and boomers are increasingly handing over their keys to the smaller Gen X population.”

    Milwaukee Eight
    CNBC reported the research firm “also adjusted its optimism toward Harley-Davidson’s hoped-for sales bump following Donald Trump’s election. With unrelenting gridlock in Washington, the analyst doubts the new administration’s ability to advance on infrastructure spending, middle-class tax cuts or corporate tax cuts.”

    The company’s new, gigantic, Milwaukee-Eight engines are not the boomer draw the company thought they would be. When the new engine was announced a year ago, one press release enthused, “with the entire touring line upgraded to the Milwaukee-Eight Big Twin, and an electric motorcycle on the horizon, what it means to be a Harley is something that’s roaring into the future.” Earlier this month, Harley announced it would be laying off workers at its Menomonee Falls powertrain plant where the engne is assembled.

    Possibly worst of all, there is increasing interest in selling Harley-Davidson stock “short.” A short sale is a bet that the value of a stock will go down. If the price of a stock goes up, the better loses. If it goes down the better wins. As of last week, about 12.5 percent of Harley’s stock shares were sold short.

    Building Riders
    Meanwhile, company CEO Matt Levatich is not worried. In multiple interviews he has pointed out Harley’s “strong margins.” The idea seems to be make up for declining sales by charging more for the same motorcycle. The bikes have become almost an afterthought.

    We are “going from: ‘We build bikes’ to ‘We build riders,’” Levatich told the Milwaukee Business Journal. He said the same thing, less succinctly, in the press release. “Our long-term strategy, focused on building the next generation of Harley-Davidson riders, is our true north. Our new product investment is one pillar of our long-term strategy to build riders globally and we are energized by the strength of our model year 2018 motorcycles coming later this summer.”
     
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  16. SouthernProducer

    SouthernProducer Well-Known Member

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    That's a sad story indeed...
     
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  17. Zipperhead Frankenberry

    Zipperhead Frankenberry Bronze Member

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    So HD will continue to try to rely on the "Our bikes aren't selling, so we'll charge more for them." strategy.

    SMH
     
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  18. IronButt70

    IronButt70 Well-Known Member

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    A new top end tourer from most any manufacturer costs more than my new Mazda CX5 with nearly all of the options. That's not a budget economy car.
     
    #18 IronButt70, Aug 2, 2017
    Last edited: Aug 2, 2017
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  19. Baldhead_J

    Baldhead_J Gold Member
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    Fair point.
     
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  20. sidecarsam

    sidecarsam Gold Member
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    It's always been that way. Model T and Model A were both less expensive than the big V-twin HDs and Indians, Brough Superiors, etc.
     
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