Harley-Davidson profits slump by 91 per cent
Over 1,000 jobs to go as global economic downturn bites hard
AMERICAN MOTORCYCLE giant Harley-Davidson is cutting a further 1,000 jobs as the company's net profits fell by 91%.
Recent figures show a drop of $19.8m (£12m) for the April to June quarter, down 91% from the $223m profit for the same period last year.
Its quarterly revenues declined 27% to $1.15bn and the firm warned that unit sales for 2009 as a whole may fall by almost a third, reports BBC News.
"It is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases," said Harley-Davidson chief executive Keith Wandell.
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I dont think the styling of the bikes are wrong, I cant stand these new Japanesse cruisers looks, I think they look too artistic, they look like they got one of those metro sexual house designers to have a bash. The price though on Harley's is piss taking, the Harley sportster is priced OK, but I dont think you get enough bike for your money, the crossbones is another bike that interests me, untill I look at the price and think no way. Harley need to do the following to compete with the Japanesse. - Build quality.
- Reliability.
- Aggressive pricing.
If they dont, then goodbye Harley, you cant rely on your brand name for another 100 years.
Posted: 16/07/2009 at 18:27
+1 on all of that. If you want an American cruiser Victory will sell you a product at least as good as an equivalent Jap, with Harley you have to point at the badge to try and justify blowing five figures on a bike. The idea of a bike as a starting point for customisation is good, but it doesn't excuse the dire quality of the OE. I recon the reason used ones fetch so much is the fact that a second hand hog will have had all the rusty, sub-standard s*ite replaced. It's a crying shame, because style wise they hit the nail right on the head with most of their range. The solution is staring them in the face. If the Italians can make a bike that'll survive a British winter surely H-D can build one to live through a Brit summer? 
Posted: 16/07/2009 at 18:43
Think both sides of the argument are right here. Hog sell to their faithful, who have a far better aftermarket (in the States) service than we do. Over there, bikes are more for summer fun than all year transport as things like filtering are illegal - though quality parts from the likes of Custom Chrome and Kyuriakan will survive poor weather. Harley's problem is that all their marketing is toward their existing fan base. Even the new retro cool Nightsters and Cross Bones are designed to cover the next generation of the same buyer - which is working to an extent. But with a downturn, Dealers are losing sales as riders refresh their existing ride (according to the US press, the aftermarket market is booming at the expense of new sales). So Harley are WAY too vulnerable to fluctuations with their sales base. Having bought MV, hopefully HD will start to cover more bases. The VRod and XR12 are helping convert new buyers; and Buell are getting their own cult following. But, outside of the Daytona/Sturgis/Laconia type buyer (who are also drifting to indpenedents - Big Dog, Big Bear, 'celeb' builders) Harley lack mainstream appeal. And Victory are starting to take a big bite of the existing market. MV may help, but maybe Harley should release an additional brand? Porche almost devalued the lable by creating that off road thingy (though saved the comapny). No one would pay a £1m for a VW, so they released a Bugatti. Other ways are for manufacturers to just join lower sectors - BMW 1-series, Aston Cygnet - but will Harley want to forever closer the door to the 'premium brand' marketing strategy by releasing their own CB500 (or C90 )
Posted: 17/07/2009 at 09:00
I would have thought the slump in profits has more to do with the Yanks not buying new HDs due to the recession rather than any issues with build quality or price.
Yes, your right, however I think the recession has highlighted Harley Davidson's shrinking market due to the reasons I stated, and the failure to attract new customers.
SexandDrugs. The point I am making is, are their bikes really worth the money you pay, common £14K for a factory built bobber is just rude.
Posted: 17/07/2009 at 09:10
Is a 911 worth the price you pay? Should a Boxter be priced to compete with a focus RS? Harley's are mainly aspirational or cult buys (and cult buyers get decent trade-ins to reduce the 'overpriced' hit time-on-time). Would more people buy a Hog if it were cheaper? I'm not convinced - the low sales results from Cruiserclones are perhaps testimony to this (IMHO). Jaguar have needed continuous rescuing from poor sales, but few people were convinced that making the new XR a rival to the Hyundai Coupe would sufficiently boost profitability. Such things are worth what people will pay for them. At the moment though...few have the cash to pay anything for them.
Posted: 17/07/2009 at 13:42
Pretty poor comparisons really, now if you had compared an MV with a Porsche, these are exotic vehicles with cutting edge technology and quality parts. The Jaguar is a poor mans rich car. Harley are living on their name to sell overpriced motorcycles, pure and simple, and it ain't good enough anymore, the recession has highlighted this. Now if we asked if the V-Rod was worth the money.
Posted: 17/07/2009 at 17:03
Yeah, in the States all that holds true, mole. In the States their bikes are a whole lot cheaper, too, but Speedy's right. If H-D don't want to go back to the '70's they have to change their mind set. European sales are down, but not by 91%. A big part of that is, as you said, down to that 'aspirational' customer. Speedy wants one, for instance. But it's because it's a Harley- his Intruder is a better bike . Still, some people are buying their bikes on the models' strengths, not just its' badge. If their product was as good as other small manufacturers- Itallian ones come to mind- they'd be able to appeal to customers wanting a bike, not just a Harley. The downturn would affect them, but not nearly as badly (imo). The Sportster, Bonnieville and Monster are a good example of what I'm getting at. All decent machines, all expressing the parent companies' character at a competetive price. I firmly believe that there are guys buying all three bikes right now based purely on the bikes', as opposed to the manufacturers, merits. Where it all goes south for H-D is when they demand damn near twice as much for the next model up in the range, with no real advantage over the entry level machine. Even if it was purely down to styling, you'd be less than impressed with your £15k pride and joy falling apart after mild summer use. If, on the other hand, the next model was better priced, didn't break down and had stainless fasteners and inch thick chrome on everything, it would appeal to a far larger customer base. Fwiw I do believe that a 911 is worth the cash. Even more, so's an Elise. I'm not so convinced about the Focus RS...
Posted: 17/07/2009 at 17:25
Agree with some of Flo's stuff here. Though it is only in the last 3 or so years that Ducati, Benelli and MV have sorted build quality and reliability (and Aprilia parts supply). HD don't have that bad a rep for build. Not sure that Japanese rivals are actually better products. May be lighter, faster, etc., but these are not really the point of competition. Premium custom bikes are now looking to 40s/50s style and performance (pan and knucklehead clone engines); performance figures are irrelevent. Nighster and 883 Iron offer good value, and undercut the midsize Japanese rivals - which are certianly no better for build quality. Would say though that HD are sticking far too rigidly to US inspiration. Yeah, US company and all that, but Victory's CORE concept shows that they are looking to be 'new-US' and just plain new (as are Confederate).
Posted: 17/07/2009 at 22:51
Agree with some of Flo's stuff here. Though it is only in the last 3 or so years that Ducati, Benelli and MV have sorted build quality and reliability (and Aprilia parts supply). HD don't have that bad a rep for build. Not sure that Japanese rivals are actually better products. May be lighter, faster, etc., but these are not really the point of competition. Premium custom bikes are now looking to 40s/50s style and performance (pan and knucklehead clone engines); performance figures are irrelevent. Nighster and 883 Iron offer good value, and undercut the midsize Japanese rivals - which are certianly no better for build quality. Would say though that HD are sticking far too rigidly to US inspiration. Yeah, US company and all that, but Victory's CORE concept shows that they are looking to be 'new-US' and just plain new (as are Confederate).
The main difference is the Jap bikes will take what the British weather throws at them and stay together. The Harleys don't. Same as older Ducati bikes.
Posted: 17/07/2009 at 23:00
To be fair on Harley I dont think they are as bad as some people make them out, but as I said before I just think for the price of the bikes when you start looking above the Sportster, they really dont represent value for money, the lets say the Crossbones was around the 8-9K then I would seriously be having thoughts about buying one. I will buy a Harley, not yet, but when I complete the work on my house, I just wouldnt shell out 14K for one. One ex Harley owner I spoke to said this. "When I bought my Harley I ended up spending a fortune tuning it up and tweaking the suspension to get it how it should be, when I got rid of it and bought a Japanesse cruiser it was half the price and spot on out the box." I have heard a few people moan about them who have owned them as being unreliable, big and heavy and not handling very well and being grossly underpowered. What does that say?.
Posted: 18/07/2009 at 06:51
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