HD's aging biker problem

[Tpoppa]

Not exactly news, but an interesting read.

http://money.cnn.com/2010/09/17/autos/harley_davidson_fall.fortune/index.htm?hpt=C2

[Disclaimer]

What are you talking about? HD has the young adult market in a lockbox.

Back in July, Harley-Davidson released 2nd Quarter 2010 results that flaunted improved net revenue in an attempt to hide net income figures that were still massively lower year-on-year. In an apparent attempt at misdirection, The Motor Company also dropped a whammy of a claim: “Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults.” Could that be true? Well, like presidents diddling fat chicks with cigars, it all depends on your definition of “is.”

Read link for more.

http://hellforleathermagazine.com/2010/09/bullshit-harley%E2%80%99s-young-adult-market-share-and-other-damned-lies/

[kreator]

As much as some people would love to see the Motor Company go under, it just is not going to happen in this lifetime. 10 years from now Recon will still be the only old guy thats not on a Harley:)

[fusion]

As much as some people would love to see the Motor Company go under, it just is not going to happen in this lifetime. 10 years from now Recon will still be the only old guy thats not on a Harley:)

Actually 10 years is significant. The baby boomers are dying or approaching non-riding ages. Not only are there way more boomers than the next generation, our generation is more open and more informed about other brands. HD is taking a relatively fast ride downhill. Not only will there not be enough riders in general to market chrome and bandannas too, even fewer are even interested.

[Tpoppa]

Harley has a real problem on their hands. I'm not suggesting they'll go under, but I do see their market share shrinking dramatically. If your demographic is aging, and your appeal to young riders is limited, what do you do?

Build a bike that appeals to younger riders with some REAL on road capability, and price it competively??? FUCK NO!

You build a chromed out trike for geezers that are too old and weak to swing their leg over a Road King. Oh, and you better charge upwards of $27k for it. How many Social Security checks is that???

http://www.harley-davidson.com/en_US/Motorcycles/street-glide-trike.html#/gallery

[Kritz]

HD just got a huge concession from its Milwaukee employees(7-year wage freeze) and a 25 million dollar tax break from the state. On top of this they set record profits for the first 2 quarters of this year despite a 30+% drop in sales numbers. I think they'll be OK.

[Kritz]

Look at the mess Suzuki is in.

http://hellforleathermagazine.com/2009/11/no-2010-suzukis-planned/

[Tpoppa]

On top of this they set record profits for the first 2 quarters of this year despite a 30+% drop in sales numbers.

No they didn't. See JRMiii's link.

[Warlock]

As much as some people would love to see the Motor Company go under, it just is not going to happen in this lifetime. 10 years from now Recon will still be the only old guy thats not on a Harley:)

Recon won't be the only one. I won't either unless someone gives it to me. I'll stick with my couch on wheels.

[Kritz]

No they didn't. See JRMiii's link.

I guess the New York Times is wrong then

http://www.nytimes.com/2010/07/26/business/economy/26earnings.html

[Disclaimer]

No, NY Times isn't wrong... but the numbers are a bait-and-switch.

Like TPoppa said... it's all in the link I posted.

[Cheech]

Harley has a real problem on their hands. I'm not suggesting they'll go under, but I do see their market share shrinking dramatically. If your demographic is aging, and your appeal to young riders is limited, what do you do?

Build a bike that appeals to younger riders with some REAL on road capability, and price it competively??? FUCK NO!

You build a chromed out trike for geezers that are too old and weak to swing their leg over a Road King. Oh, and you better charge upwards of $27k for it. How many Social Security checks is that???

http://www.harley-davidson.com/en_US/Motorcycles/street-glide-trike.html#/gallery

Bingo. It used to be that the more discerning people (like the majority on here) were repelled from HD due to their complete stubbornness to get out of the 1930's (with a notable compromise in FI). Now with the huge amount of choices that look damn near identical (which satisfies the "riding for image" crowd), and the whole shrinking disposable income thing, you can hop on a Shadow, c50, VStar, or a ton of other bikes and be just as happy if not happier (with more modern suspension and engine technologies) for literally half the price.

Buying American only works when the product being sold is actually competitive with it's market. HD's been trying to skate by on it's rustic image for decades now, and the recession is causing those chickens to start coming home.

[Kritz]

No, NY Times isn't wrong... but the numbers are a bait-and-switch.

Like TPoppa said... it's all in the link I posted.

I'm no financial expert/lawyer but wouldn't it be illegal to do that? I also question the sanity of reporting "record profits" while asking for huge concessions from the state and its own workers. None the less the workers and state caved.

[C-bus]

I don't have a dog in this fight, so my opinion is bestowed sans passion. The "overpriced" argument is a myth (retail). Compare HD to any of the metrics and you will find similar price points. Personally, I think the metrics use too much shiny plastic. Would I rather pay $8500 for a Shadow Phantom or an 883 Iron? I'll take the 883. Now where HD owners go wrong is resale when they try to recover cost on a 5-year old bike. To the original post, HD lost the young market when they killed Buell. Bad call

[Disclaimer]

Simple example.

If you make $110 revenue on $100 cost, you make 10% profit with net income of $10.

If you make $40 revenue on $33 cost, you make 30% profit with net income of $7.

That's the case. Record profits, percentage wise, but overall net income is down. Cost-cutting is key, but the business is still hurting. Of course they're reporting to investors record profits because they don't want to scare them away, but it's a bleak picture compared to years past.

It's not lying or illegal, record profits are true, but when you look at life with a skeptical eye + a dash of common sense -- you'll get the full picture. Claiming record profits when the whole industry is hurting, plus you selling off Buell, MV Agusta, and asking for union concessions, doesn't seem realistic. That's where the common sense comes in...

Edited September 20, 2010 by JRMMiii

[Kritz]

:cry:I'm gettin my ass kicked on several forums today.

[Tpoppa]

Cost-cutting is key, but the business is still hurting. ...

Yes. If revenue is down by X, and you cut costs by X+1. It looks like you're doing better. Honestly, if HD didn't do that their stock would have tanked (even more) and they'd have a bigger problem to deal with.

The problem is slashing jobs is only a temporary boost to the bottom line, and can hurt your abilty to make $$ in the future.

[Cheech]

Yes. If revenue is down by X, and you cut costs by X+1. It looks like you're doing better. Honestly, if HD didn't do that their stock would have tanked (even more) and they'd have a bigger problem to deal with.

The problem is slashing jobs is only a temporary boost to the bottom line, and can hurt your abilty to make $$ in the future.

Especially in manufacturing. People don't come in blessed at birth with the ability to stamp metal or sew leather. Training and the associated quality control that goes with it are huge liabilities whenever a manufacturing company starts to come out of a downsizing. I've seen it first hand, and it's not pretty.

[Disclaimer]

People don't come in blessed at birth with the ability to stamp metal

Srsly, it's really hard to train people to push two buttons, keeps their hands out of a press when it moves, and stack parts. You almost have to be like 7 or 8 years old to understand that.

I'm just busting balls for you press operators. You serve a valuable purpose when you do your job.

Edited September 20, 2010 by JRMMiii

[Cheech]

Srsly, it's really hard to train people to push two buttons, keeps their hands out of a press when it moves, and stack parts. You almost have to be like 7 or 8 years old to do understand that.

I'm just busting balls for you press operators. You serve a valuable purpose when you do your job.

Don't tell that the the union guys at one of our main metal stamping plants.

[swingset]

I don't have a dog in this fight, so my opinion is bestowed sans passion. The "overpriced" argument is a myth (retail). Compare HD to any of the metrics and you will find similar price points. Personally, I think the metrics use too much shiny plastic. Would I rather pay $8500 for a Shadow Phantom or an 883 Iron? I'll take the 883. Now where HD owners go wrong is resale when they try to recover cost on a 5-year old bike. To the original post, HD lost the young market when they killed Buell. Bad call

Whenever anyone uses the price comparison to Jap argument, they always use Harley's cheapest models and compare them to the Japanese's most expensive brand. Ever notice that? Sure you did, you just did it.

Compare Harley's big cruisers with Star or Suzuki. Just for fun.

[RSVDon]

Whenever anyone uses the price comparison to Jap argument, they always use Harley's cheapest models and compare them to the Japanese's most expensive brand. Ever notice that? Sure you did, you just did it.

Compare Harley's big cruisers with Star or Suzuki. Just for fun.

Just did.

Hardly-Davidson

-Nightster - $8-12k

-Dyna - $13-15k

-Softtail - $16-19.5k

-VRSC - $14.5-15k

-Touring - $16-24k

-CVO - $29.5-36k

Suzuki

Boulevard - $7-16k

Kawasaki

Vulcan - $7.8-16.3k

Honda

Rebel - $4k

Shadow - $7k

VTX - $10.2-13.7k

Goldwing - $23k

While the bottom of the line models are only separated by about $1k. When you get into the fully loaded models, you can get a Japanese equivalent for around $3-6k less than the comparable Harley.

The market is upscale, they ask for those prices and the boomers are willing to pay it. But once the boomers are gone, is my generation really willing to pay $20k for a fully loaded Softail or Road King when the Japanese equivalent is almost $4k cheaper? Four grand is a lot of money to spend on tires, gas, mods etc just to not have "heritage". I've never been one to be loyal to a brand just because. My money goes where I find a product that pleases me. "Buy American" is an oxymoron when it comes to vehicles nowadays.

[SpeedTriple44444]

I hate to admit it, but Harley makes a nice product (in it's category) at a fair price for being American-made. Do I want one? Hell no. I want something that goes and handles. Most of us under 40 want performance, and Harley just doesn't offer it. Add to that the gay pirate "image" and smug superior attitude, and my hell no upgrades to a fuck no.

[jschaf]

I was on Hardley's mailing list & getting a bunch of crap in the mail about coming in for the "test ride of a lifetime" & such. I must be in the target demographic group for them since I'm 52. This prompted me to write a letter to their suggestions department, telling them how much money I've spent on bikes over the years & asking them if they planned on making anything to my liking in the next quarter century or so (I specified lean angle, max weight, power, torque curve, snickety snick transmission & so on). I wasn't really suprised that I got no reply, but at least the bullshit advertisements in the mail have stopped.

[Disclaimer]

Did anyone ever tell you you're too old for a sportbike? Someone should've let you know about 12 years ago.