[Shuje Sunge]

HD revenue increased less that 1%, net income fell 1.2% and 1.6% drop in US bike sales.

Harley-Davidson Inc. Earnings The 1 Number That Should Worry Investors HOG

Odd the write up didn't mention increased competition as a reason.

.

 

[NorthernProducer]

HD revenue increased less that 1%, net income fell 1.2% and 1.6% drop in US bike sales.

Harley-Davidson Inc. Earnings The 1 Number That Should Worry Investors HOG

Odd the write up didn't mention increased competition as a reason.

.

I am an investor and have been since the IPO. I listen to their earnings call and it's interesting to hear management respond to the analysts' questions...though I am not as impressed with the current exec's as I was with the team that took the company public. Anyway, if you dig into the numbers and impacts of buying (parts and accessories), and selling bikes on the international market, a significant negative to net revenues and income is the foreign exchange rates between the dollar and other currencies...they got hit pretty bad on that account. Most Fortune 500 companies with foreign transactions are reporting the same problem with the value of the dollar (high) and the stock market has reflected that issue lately by slamming their stock.

One issue that HD faces (and Polaris will be facing this too) is a changing demographic. The core buyer is getting older (dying off) and disposable income has been in decline since 2008. The product being sold is too expensive for the millennial's and many just don't want to ride what dad and grandpa rode. HD is trying to change the product mix with the new Street (I wasn't impressed) and they would still like to attract more to the V-Rod (I had one and it is a good bike, but it is still too expensive). They also have problems with dealers that just don't want to carry the Street or even the V-Rod...that needs to change for sales to show a bump with the next generation riders.

I know, we all think the Scout might be answer to the target audience (price point and desirability), but it is still too early to know if that will work or not. Example...my son has ridden for years (prefers Honda CBR's and has had HD's) and is observing my experience with Polaris at the moment. He doesn't seem too interested in switching from Honda given his views on my Indian experience at this point. I guess that shows a degree of maturity on his part...

 

[fast eddie]

Almost bought [HOG] stock a few years ago. They are a big part of Milwaukee's local economy. Bought [PII] 3 years ago. Has done quite well. But nothing made me as much as Donimo's pizza [DPZ]

 

[ndncowboy]

Yup, food is where to put your money. People will do anything for food. Not so much with bikes.

 

[Burt]

One issue that HD faces (and Polaris will be facing this too) is a changing demographic. The core buyer is getting older (dying off) and disposable income has been in decline since 2008. The product being sold is too expensive for the millennial's and many just don't want to ride what dad and grandpa rode. HD is trying to change the product mix with the new Street (I wasn't impressed) and they would still like to attract more to the V-Rod (I had one and it is a good bike, but it is still too expensive). They also have problems with dealers that just don't want to carry the Street or even the V-Rod...that needs to change for sales to show a bump with the next generation riders.

Yes, we have been hearing about this for 20 years now and Harley has still been the number motorcycle company in the US for most of those years. I wonder if something is missing in the theory. I'm glad MOCO is thinking about its future, but could the assumption of the changing demographic just be more overcautious fear than reality? I owned several motorcycles as a young man, but never had a desire for a Harley until after my youngest graduated high school. I've owned four since. Maybe maturity drives us for a different kind of adventure and the demographic for the big twin is getting bigger as the population grows. That would be good news for both Harley and Polaris.

Burt

 

[NorthernProducer]

Yes, we have been hearing about this for 20 years now and Harley has still been the number motorcycle company in the US for most of those years. I wonder if something is missing in the theory. I'm glad MOCO is thinking about its future, but could the assumption of the changing demographic just be more overcautious fear than reality? I owned several motorcycles as a young man, but never had a desire for a Harley until after my youngest graduated high school. I've owned four since. Maybe maturity drives us for a different kind of adventure and the demographic for the big twin is getting bigger as the population grows. That would be good news for both Harley and Polaris.

Burt

You make some good points and I wish them success as they employ some good folks putting those bikes together. I guess the demographic's issue will be interesting to see them solve, but if my son and his friends that ride are an indication, I think Polaris and HD better start thinking about how to move them into their respective camps. When I have asked this friends why they are riding Ducati's and BMW's, they respond with answers that aren't that surprising...they like the product, culture (especially with Ducati) and image. They seemed to have figured out how to stay with their favorite brand by looking at the various model lineup's as they mature and their tastes/requirements change. I guess that isn't much different from some of us that have kept a MoCo bike in the garage. Heck, a retired buddy of mine that has always been a life long HD rider even bought a new Ducati Monster last fall as a second bike. It will be interesting to see how this all plays out.

 

[Burt]

That is a good point. Home is where the heart is and that is usually where we started. I myself have a Yamaha Sport Touring in my garage for the same reason. And there will probably always be a big twin sitting next to it. Kind of funny, I had an opportunity to get a good deal on a Ducati, but my back hurt just looking at it.

Burt

 

[2263]

They also have problems with dealers that just don't want to carry the Street or even the V-Rod

I believe HD is second guessing the desirability of the traditional V-Twin, assuming the younger generations are not attracted to the motor.. This I believe is false .

And I believe the v-Rod was a knee jerk reaction, because of fears of not meeting pollution control with the air cooled engine.

If I owned a dealership I would try not to carry either the v-Rod or the streets.

The reason being is probably backed by sales figures that the bikes are not attractive.. At any price.

Not that they have not been promoted and available.

I do not consider them Harley's..

They are copies of other brands..

And the same kind of bike can be had from another country's brand, at a cheaper price

 

[NorthernProducer]

I believe HD is second guessing the desirability of the traditional V-Twin, assuming the younger generations are not attracted to the motor.. This I believe is false .

And I believe the v-Rod was a knee jerk reaction, because of fears of not meeting pollution control with the air cooled engine.

If I owned a dealership I would try not to carry either the v-Rod or the streets.

The reason being is probably backed by sales figures that the bikes are not attractive.. At any price.

Not that they have not been promoted and available.

I do not consider them Harley's..

They are copies of other brands..

And the same kind of bike can be had from another country's brand, at a cheaper price

After reading your comments, I found myself agreeing with you on your assessment. Then my wife said I was in the older generation that didn't think about Harleys the same way my son's generation think about them. She reminded me that when he was younger and living at home with us, he rode sportsters and followed good dad's example of Harley's for the street and Honda's for our off road riding. So, I called him to see how he reacts to your thoughts on the subject and this was his response:
- Surprise...he agreed that he and most of his buddies like the V-twin engine design...even the Harley V-Twins. Of course, they also like the Ducati V-Twins, too.
- I asked him about the V-Rods and he said they just don't like the bike's design, but said the engine was nice.
- The Street model was not a hit with him either. He didn't like the bike's design and it looked "cheap". BTW, the Street's are available at my dealer and my dealer told me there has been zero interest in them.
- He volunteered that the Harley shops just are not inviting to his generation. He liked going to the Harley shops years ago (with me) when they were smaller and more like a mom and pop operation. They had character and some were run by "characters". I have to agree with him on that account.
- He then went on to repeat his reasons for riding the other brands...

So...it looks like you pretty much nailed-it!

 

[kruisin]

Yes, I think HD's assessment of what the younger rider is looking for is what the Buell bikes were starting to become with the adventure bike and the non HD powered sport bikes. They got rid of what probably would have brought the new demographic into the showrooms. The sportster engine that HD wanted to force Buell to use was the key problem because the younger rider didn't want that engine powering a sportbike.

 

[2263]

It seems that a lot of times to have a successful business the product has to have a "gimmick" for lack of better words.
Harley, since its v-twin introduction, to me has been its sound. And in later years to capitalize on slow turning high torque engines. (With that same sound).

It's what gives a relaxing and powerful riding experience.

VS the chain saw busy sound of higher strung powerful bike motors.

That to me is Harley's gimmick or niche.

Historically Harley has not had success with bikes outside of that narrowly defined segment of motorcycling.

It has been so popular that dozens of Harley clone companies (when the economy was booming) popped up..
At one time even with the name "Indian"
(A Harley clone with skirts).(gilroy).

It has been written many times that even if you don't like Harley, Harley has done a lot for the motorcycling market.

Every foreign motorcycle builder has tried to get a piece of Harley's "Niche" market!

Now Polaris.. First with Victory and now with the Indian name.

"To out Harley, Harley"

A hundred years ago it was not about building a cruiser..

It just turned out that the old ancient engine design makes a great modern day cruiser.

And not to inflame people on this enthusiast site..

But what is Polaris's motorcycle niche going to be?

The Scout is already a better cheaper V-Rod.


The Chief? A better Harley?
Or will Polaris find it's own gimmick or "niche"??

The Indian 4?

 

[rosen39]

Indian is on their way "To Out Harley, Harley".

They have a line of great bikes from basic cruisers, to baggers, to touring. Their showrooms are well thought out, bikes spaced far apart so you can stand back and actually see them. The Harley showrooms jam as many bikes as possible in there, you can't stand them up without worrying you will scratch the bike next to it. They are following the Harley marketing by offering all kinds of t-shits, sweatshirts, jackets, gloves, etc, etc. They also are expanding their own line of accessories, much like Harley, to customize their bikes.

The key will be quality, and standing behind their product. You can always get someone to buy a product once, but you have to get them to return to be successful. They have to stay on point with the nostalgic theme, and an Indian 4 cylinder would be kind of cool. How about shipping the bikes without the leather seats and bags. Then the buyer would have the option to choose at the dealer what color leather they wanted. Paint colors will be next. Harley does have some nice metallic colors.

 

[Burt]

Indian is on their way "To Out Harley, Harley".

They have a line of great bikes from basic cruisers, to baggers, to touring. Their showrooms are well thought out, bikes spaced far apart so you can stand back and actually see them. The Harley showrooms jam as many bikes as possible in there, you can't stand them up without worrying you will scratch the bike next to it. They are following the Harley marketing by offering all kinds of t-shits, sweatshirts, jackets, gloves, etc, etc. They also are expanding their own line of accessories, much like Harley, to customize their bikes.

The key will be quality, and standing behind their product. You can always get someone to buy a product once, but you have to get them to return to be successful. They have to stay on point with the nostalgic theme, and an Indian 4 cylinder would be kind of cool. How about shipping the bikes without the leather seats and bags. Then the buyer would have the option to choose at the dealer what color leather they wanted. Paint colors will be next. Harley does have some nice metallic colors.

As a long time Harley owner and someone with money in the bank ready to buy my next Big Big Twin, I have been watching the Polaris Indians the last couple of years with a lot of intrigue. I really like these bikes and so does my wife, which is important.

My conclusion is Polaris and Harley pretty much have identical products with identical services. Picking a bike between th two depends more on the buyers mood that day than differences in the bikes. That's not a bad thing, these two brands sell some of the most expensive bikes on the market and neither have the performance to match the price. That is OK because Harleys and Polaris Indians provoke our emotions. They are look-at-me bikes intended to reflect a restless soul. Just look at my avatar, only emotion could make an old beat up gas tank from Steven McQueens Indian represent ones perspective of desire.

Performance is that other style of bike that can be bought on craigslist for next to nothing. Performance may give you braging rights over your buddy at the end of the run, but it's not something you invite your friends to come over to admire while drinking a beer.

There will always be those who are dedicated and loyal to their bike maker, but most folks I know are loyal to the V-twin and really like both brands. The loosers are metric look-a-likes and Victorys. And not that Victorys or metrics will go away, they fill a nitch. But I don't see them bettering the Indian line and certainly not Harley.

I'm personally pretty excited (an emotional I guess) with both brands. My wife who hates to ride keeps asking which one is next, the Indian or Harley? She actually enjoys shopping for my next ride, LOL. I can own one this year and trade for the other next year, it just depends on my mood. I will likely have some kind of metric sport something or other to satisfy my performance lust, but a nostalgic American Big Twin will always be my pride and joy.

Burt

 

[Big Daddy]

It seems that a lot of times to have a successful business the product has to have a "gimmick" for lack of better words.
Harley, since its v-twin introduction, to me has been its sound. And in later years to capitalize on slow turning high torque engines. (With that same sound).

It's what gives a relaxing and powerful riding experience.

VS the chain saw busy sound of higher strung powerful bike motors.

That to me is Harley's gimmick or niche.

Historically Harley has not had success with bikes outside of that narrowly defined segment of motorcycling.

It has been so popular that dozens of Harley clone companies (when the economy was booming) popped up..
At one time even with the name "Indian"
(A Harley clone with skirts).(gilroy).

It has been written many times that even if you don't like Harley, Harley has done a lot for the motorcycling market.

Every foreign motorcycle builder has tried to get a piece of Harley's "Niche" market!

Now Polaris.. First with Victory and now with the Indian name.

"To out Harley, Harley"

A hundred years ago it was not about building a cruiser..

It just turned out that the old ancient engine design makes a great modern day cruiser.

And not to inflame people on this enthusiast site..

But what is Polaris's motorcycle niche going to be?

The Scout is already a better cheaper V-Rod.


The Chief? A better Harley?
Or will Polaris find it's own gimmick or "niche"??

The Indian 4?

Husky, I don't mean to belabor the point but that is a signature post from an observer.
Someone looking over the fence at Indian Motorcycle.
Indian really doesn't have to worry about "To out Harley, Harley".
Indian Motorcycle is already vastly superior to Harley.

I do understand that someone craning their neck to peek over the fence at us would not understand...so I try to explain it to you....But that has never worked out...has it? I mean they both look like motorcycles. But that is the end of the similarity.
Indian owners know these things Husky.

There are a lot of "Harley Men" here who have found their way to Indian Motorcycle.
Experienced guys who have served life behind bars....handlebars.
They all say the same things, "Best motorcycle I've EVER owned" when they speak of their Indian.

So, I'm not bashing brands here, just stating fact.

The ball is in Harley's court now....What can they do to "Out Indian, Indian Motorcycle"?
So far I'm not seeing anything but a bunch of whimpering and whining like a little girl.
Reminders that we are all "Brothers in the wind" and horseshit like that.
Stuff losers spout.
Stuff Jap Jocks used to utter in a prayer chant when they were on their knees facing Milwaukee.

 

[Guest]

If Indian started in 1901,and Hd in 1903 that would make Hd the clone!

 

[2263]

The ball is in Harley's court now....What can they do to "Out Indian, Indian Motorcycle"?

By Rick Barrett of the Journal Sentinel
Updated July 27, 2013

Quote;
Harley says it takes all competitors seriously, including Indian and Victory.

"We are going to double down. As good as we think we are, we are going to be twice as good. We are not going to rest on our history or our laurels," said Keith Wandell, Harley-Davidson chairman, president and chief executive officer.

"We are going to come to work every day and say the competition is nipping at our heels, and that we are going to get better. And as we drive down the road, they are going to get more distant in our rear-view mirror," Wandell said.

 

[Big Daddy]

By Rick Barrett of the Journal Sentinel
Updated July 27, 2013

Quote;
Harley says it takes all competitors seriously, including Indian and Victory.

"We are going to double down. As good as we think we are, we are going to be twice as good. We are not going to rest on our history or our laurels," said Keith Wandell, Harley-Davidson chairman, president and chief executive officer.

"We are going to come to work every day and say the competition is nipping at our heels, and that we are going to get better. And as we drive down the road, they are going to get more distant in our rear-view mirror," Wandell said.

"Double down"....
I love that.

 

[2263]

"Double down"....
I love that.

Yep I agree... All CEO's talk alike..
Make money for them selves and and stock holders.

 

[RENARELLO]

I believe HD is second guessing the desirability of the traditional V-Twin, assuming the younger generations are not attracted to the motor.. This I believe is false .

And I believe the v-Rod was a knee jerk reaction, because of fears of not meeting pollution control with the air cooled engine.

If I owned a dealership I would try not to carry either the v-Rod or the streets.

The reason being is probably backed by sales figures that the bikes are not attractive.. At any price.

Not that they have not been promoted and available.

I do not consider them Harley's..

They are copies of other brands..

And the same kind of bike can be had from another country's brand, at a cheaper price

Husky you are the man!
What did you think of Buell and where did it fit in?

 

[rosen39]

Renarello, I test rode a Buell when they first came out. A great sport bike, that was fast with the sportster engine. You just did not want to be at a stoplight with that engine shaking up and down. Great brakes (caliper mounted inside the rotor), and handled well. Eric Buell had some nice engineering features on that bike. I always thought the muffler under the bike was butt ugly, but at a talk given by Eric, it was put there to keep the center of gravity very low. I think the oil was kept either in the frame, or the swingarm. The trouble was getting sport bike people into a Harley showroom. He is back building sport bikes, and around here, they are sold at a BMW/Ducati dealership. That is where his market is.