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Discussion Starter · #1 ·
In the middle of the week, I received an advertisement from HD talking about Demo Days. They want us to come out and ride their line of bikes. This really isn't unusual however posted in the middle of the card, it states....free fuel for 10,000 miles with any purchase of a 2014 HD.

Then it states things like... 50% off select kids clothes, 20% off select performance sportswear, 20% off HD bike covers. Really makes me wonder if their drop in sales and the introduction of the Indian line is starting to catch their attention. I have never seen them offer this much. :confused:

Semper Fi,
DrZ
 

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I've noticed that trend toward discounts across the range of dealerships up here in the PNW, gotta feeling it has a lot to do with the state of our economy and the fear of rising interest rates. Of course winter is not far way and the best time for motorcycle hunting at least around here....LOL
 

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I'm not sure if the ad you received DrZ is from a dealer or the Motor Company. In any case, I was at my local HD dealer last week to pick up some parts and started talking to a salesman I know about all the new bikes I saw on the show room...there were over 100! This guy has been with the dealership for over 10 years and told me that sales have been horrible this year. Interestingly, most of the "new" bikes I saw were unsold 2014's many of which were purchased from other dealers that needed to clear inventory. More interesting, the dealership can't seem to unload them even with modest discounts. Now they are "paying the price" because HD management told them their 2015 allocation is being reduced because of all the unsold 2014's...anybody see the "fairness" in this?

So, I asked my friend why they can't sell bikes in the volume needed to meet their sales targets. He answered me by having me set on a 2015 FLHTKL (Ultra Limited Low) and look at the price tag...it was a few dollars shy of $30,000 MSRP. He told me that their customers just can't afford these high prices and they run throughout all the models except the new Street line...and nobody is even looking at those! He said the dealers have started complaining to the Motor Company about the crazy price increases and that the Motor Company just doesn't acknowledge the fact the economy has not recovered enough to let their average customer afford new Harley's at the current prices. He admitted HD is not listening and especially their CEO (he's another story altogether).

All this sounds like HD may be finally pricing themselves out of the current market...at least for the volume they (and their dealers) need to meet their income and profit targets. If the economy returns to "normal" and interest rates stay low, things might change. We'll have to wait to see. In the meantime, Indian (and Victory) can seize the moment (which I'm sure they are...now if they could only more closely match supply and demand). If I were Indian, I'd sure be working on that mid-sized and mid-priced motorcycle in the market segment that HD appears to be abandoning. When will we see a new Indian Warrior?
 

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Considering that they produced and sold about ten times as many motorcycles as Indian did (likewise for Victory) I very much doubt that Harley Davidson feels the least bit threatened. Considering that Polaris's combined Victory & Indian sales were about 1/5 or so of that of the Motor Company that figure is significant but not exactly threatening. Besides that Harley Davidson probably makes more money off it's licensed apparel and all the other licensed thingamabobs than it makes selling motorcycles. In that regard and in the dealer network Polaris is still way behind yet
Reinie-

It is raining in New Orleans on this Sunday morning. That means I will probably not be doing any recreational riding today.
All that means I have a little time on my hands, so let's peel this onion shall we?

I fully understand what you are saying about production numbers and I fully agree with you that Harley Davidson Motor Company doesn't feel in the least little bit threatened.

That's demonstrated by the way they have done business for decades. It's obvious when they raise prices in a market that now has Indian Motorcycle. Why is Indian any different than the Japs? Ronnie ran off the Japs for them last time and bailed them out with loans. Heck, they even got some TARP loans from our current administration. They are the darling of the American motorcyclist. Every kid in America grows up aspiring to own a Harley Davidson motorcycle. Why should they worry?

I mean, as American working men, we probably shouldn't feel threatened when the Motor Company tells us that they are going to open up assembly plants in India. The fact that these are American jobs going off shore shouldn't be on our radar...should it? We can justify that with the Company Line that this is being done to avoid tariffs in developing world markets. The exploitation of cheap labor in third world countries is just good business....isn't it? If you are a Harley Davidson Motor Company stockholder you probably believe this to be true.

Harley Davidson Motor Company will never sell you a motorcycle.
They "sell" their product to their dealer body.
So let's examine what they have done with their dealer body, shall we?

With infusion of capital from AMF also came modern American marketing strategy.
They realized that if they were going to make future sales goals, they would have to do for Harley motorcycles what they did for the pool table.
Pool tables were for bars and dingy pool halls frequented by shady characters. But now you find pool tables in family residences, game rooms and living rooms.
By accident?

If you have been around The Motor Company as long as I have, you have memories of little Mom and Pop dealerships. Some of them dingy little old garages and abandoned gas stations. They had to operate this way because they were in the midst of "the lean years" when only cops and outlaws rode Harley Davidson motorcycles. They were independent American entrepreneurs who had to be kept lean to survive in a difficult marketplace.

But what I'm suggesting to you reinie, some of these little Mom and Pop dealership rated right up there with the seedy pool halls.

Remember, "You meet the nicest people on a Honda"? They knew too. The image had to change if you were going to have a pool table in your living room, a juke box in your game room...and...a motorcycle in your garage.
These dealerships frequented by people with grease under their fingernails had to go....The image had to be changed. Harley had to go mainstream.

I just happened to be visiting with Mary Doolin of Doolin Harley Davidson, Texarkana Texas the day she got her letter from The Motor Company. They told her that she had to move from the old gas station. She had to relocate out to the interstate highway in a brand new building. She had to have a showroom with so many square feet dedicated to MotorClothes. She would be required to keep "X" number of bikes in her inventory at all times....Enter the Boutique Dealership. She was devastated. She knew she would have to comply or lose her franchise....So she complied, built the new Glass House, and a few years later had to sell out to an "investor group". She couldn't make ends meet with the high overhead she had to take on.

How many of these "old dealerships" exist today?
I can tell you this, I have a whole collection of T-shirts from dealers that ain't there no more.

So, are these Harley Davidson "investor group dealerships" worried?
No, they are busy buying Indian franchises.

When one new, box stock, Indian motorcycle walks away from a brand new, box stock, Harley Davidson out on the highway?
Harley Davidson is in trouble.
When one new Indian is sold?
Harley Davidson is in trouble.
It will be felt in the dealer's showroom long before it is felt in the Harley Davidson Motor Company Boardroom.
 

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This came out out Friday:

In a report published Friday, Wunderlich Securities analyst Rommel Dionisio initiated coverage on Harley-Davidson Inc (NYSE: HOG) with a Hold rating and $57.00 price target.
In the report, Wunderlich Securities noted, “We are initiating coverage of Harley-Davidson, Inc. (HOG), the leading U.S. manufacturer of motorcycles, with a Hold rating and $57 price target, which is derived using an EV/2015E EBITDA multiple of 9.7x. Harley-Davidson has, over the past 110+ years, successfully established itself as a truly iconic American brand, and now accounts for about half of all heavyweight bikes sold in the U.S. In addition, HOG is well positioned to benefit for many years to come from its growing presence and expanding dealer network in emerging markets. However, we are cautious on the stock near term, given increasing competitive challenges from Indian and Moto Guzzi, while the stock's already-premium relative valuation likely limits potential price appreciation.”

Harley-Davidson Inc closed on Thursday at $60.98.
 

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And to add to what BD has said I worked for an H-D franchise for a while. I was amazed at how the Motor Company treated their franchisees. The franchise owner could change nothing with out a visit from the merchandising gurus from H-D showing up and approving what the shop owner wanted to do. Not only does that complicate life for the shop owners but H-D then says they must also do this or that along with the intended changes... regardless as to how small the initial change was to be. Now it just became more expensive and time consuming. I witnessed this over a simple change in the arrangement of a few fixtures in the clothing area. Same fixtures,,, just moved around.

These gurus from corporate office had never ridden a motorcycle but they knew how to properly fold clothing for display. The others knew how to coordinate colors (orange and black?). The others knew floor plan layouts. When they were done the dealership that wanted to move two simple fixtures across the floor in a matter of half an hour now needed to invest three days labor, new fixtures, an electrician. The electrician led to the building department for permits which led to a quick overview of the floor plan. As it turned out the fire inspector would not approve the floor plan because it blocked the emergency exit. The building department would not allow the changes made because it blocked any handicap accessibility. Not just those in wheelchairs but also those temporarily using crutches or those in a leg or foot cast. Instead of hiring an architect, electrician, obtaining permits and going through all of the red tape they just threw the plans out. The Motor company could not have cared less. It was to be their way or the highway.

How much did the Motor Company help their franchisee?

One of my daughters received her business degree and Harley-Davidson was used as a case study of one of the worst run corporations in America. From singing the praises of H-D for bailing them selves out of the AMF era and returning to their roots to the one of the worst managed corporations in America. How's that for bragging rights.

Percentage wise Polaris is doing a lot better than Harley-Davidson but H-D will not fail because of this. If they fail it will be because of their own internal management, strife and problems. Not because of the new competition. H-D's profit margin has been so high that they feel nothing can hurt them. They are infallible. When you are that high you had better look down to your foundation to see if it can support you. When you keep chiseling away at your foundation like not working WITH your franchisees the foundation becomes weak. Then you chisel some more away by not caring about your customers. A little more is chipped away when quality slips. More is removed when strong competition comes onto the scene. I (and many others) have watched this happen a bit more rapidly for about the last eight years. If and when they fall it will be because of their own doing. No outside interference.

This is the path of retail corporations. Sears was the biggest there was. Now they are owned by K-Mart and Wal-Mart is knocking on their door. Where is Harley-Davidson going? Will gaudy paint colors rescue them? How about changing and re-arranging the different models? 2008 was the absolute last year for Wide Glides. All done... Gone! WAIT! You can by new ones in later 2009 and 2010. Hey look! the Cross Bones is selling great! Let's stop making them! WTF?

Thanks for tolerating my ranting. If you have read this all then you have more patience than I do.
 

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As I've told you before I purchased a Softail Deluxe for my wife 1 week after getting my Vintage. The people at Chesters Ft Lauderdale Harley are cool, friendly, accessible, and encourage riders to get involved. That's the Harley model as I experienced. The bike is very nice on the eyes and my wife enjoys it. When I ride it I don't get it. It is clunky, low, no low end torque. In short, don't get it. As far as "threatened" goes, I wouldn't use that word. What I would say is "watchful" You know darn well that they see the accolades Indian is getting. We know they see head to head comparisons that Indian is winning. We know they have ridden, tested, broken down Indian bikes to see what the buzz is about. What I also know is they use the former financial difficulties of Indian as their fall back position. In my opinion, this is where the mistake will be made. Polaris is a very strong company. Think about this; the Indian dealers in my area still don't have a lot of rides, events etc...What will it be like when 20-30 Indians head out to bars, restaurants? These bikes turn heads. The ride is incredible. The bang for the buck is solid especially when compared to Harley. The 2016 Harley line up will reveal a lot about whether or not Harley stands on previous success or whether they innovate. Staying idol will not be an option anymore.
 

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In 2003 I caught myself a dose of Harley Fever.

Ya do have to admit, 100 years is something. I loved, still love, that winged emblem that they came up with. I had a collection of 100th Anniversary stuff. I actually went to buy one of those sharp Heritage Springers in that black and silver paint job. In my mind, that bike embodied classic Harley styling cues. That 100th Anniversary logo was just the icing on the cake.

Sure, I understood that every five years they came out with "limited edition anniversary" bikes complete with logos and paint jobs. Even numbered certificates of authenticity. But dang it, 100 years was special...and I bought in...well, almost bought in.

I went to the dealership and after waiting for 20 minutes to talk to a salesman I had to interrupt a bull session to get someone to talk to me. I walked up and asked the group of salesmen if anyone wanted to sell me a bike or not. One salesman turned to me and said "We don't have to sell these bikes, they sell themselves."

I turned to walk out and only then did he break off to come over and talk with me. We walked out to the parking lot for him to look at my bike to establish a trade in value. He said that it was an "old EVO". He told me that my bike was "obsolete". My bike was a 1996 and remember, this is in 2003. He told me that the trade in value of my bike would amount to me being charged a $600.00 disposal fee. They would have to send my bike off for wholesale or to the auction.

That was what it took to turn on the light for me.
I went on to ride my "old Evo" for another 10 years, but I knew.
I was finally hip to their trip.
 

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FYI, The dealer I spoke to last week said, that currently Indian has taken 5% of the market. If true, thats no small feat, since it's a nationwide percentage. And being a harley owner and listening to all the others, Harley Davidson will be losing ground due to competition, attrition and overwhelming pricing for the same ol bikes we have been buying for the last 15 years...
 

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FYI, The dealer I spoke to last week said, that currently Indian has taken 5% of the market. If true, thats no small feat, since it's a nationwide percentage. And being a harley owner and listening to all the others, Harley Davidson will be losing ground due to competition, attrition and overwhelming pricing for the same ol bikes we have been buying for the last 15 years...
I wouldn't be surprised about the market share percentage and guess it will keep growing. My broker's advice about a year ago was for me to start selling off my Harley stock based on their analyst's research. It was a tough decision because I bought at the IPO and even got to know some of the Vaughn Beals' management team through my employer's work with the Motor Company. Given my broker's advice and my observation over the 10 years or so, I started selling off the stock last year, and will probably totally dispose of the remaining shares by year-end.

Chas...I agree the bikes haven't changed much in many years. Here is a personal example of your critique...My wife was interested in the "new" Sportster 1200T and went to our dealer earlier this month to look one over. She was actually turned-off by the horrible paint...especially on the fuel tank (she didn't like its design either) and cheap-looking brackets used throughout the bike. She has decided to keep her 2005 XL1200 Custom instead of buying new (I bet she gives my Scout a good look when it arrives). I looked over the FLH's while she contemplated the Sporty and couldn't believe the prices on those things! As long as Indian doesn't follow HD's pricing policy, they continue innovating and keeping quality high, they will increase their market share. I'm just not sure that HD's current senior management team is up to the task...maybe it is time for their Board of Directors to take action!
 

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In September 1993 my business partners and I had decided we had risen up the food chain far enough to visit a dealer outside of our county (bypassing our local dealer who was and is a total bozo) to buy three new Harleys....First thing we noticed was no bikes in the showroom at all to buy..we had to order them.....Well there wasn't any other choice than to do just that...they also told us about the list they had been accumulating where guys were putting down $1k for their 2003 100 year anniversary models.....Guess we didn't get the whole HD mystique but we did order our bikes....Next June when our bikes arrived I happily hopped on and headed the 65 miles home...by the time I arrived I was heartily dismayed at what I thought was the worst running, most vibrating and evil handling beast I'd ever been on....When a friend inquired a few days later as to how he could get a new HD I told to come right to my house and drive one away...I owned it 5 days with it's whopping 65 miles on the odometer and made $4 on the transaction....Never seriously considered a Milwaukee Miracle again....
 

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Our local Harley dealer is advertising on the radio $2000 off a new bike and get $1000 of accessories free. THE closest Indian dealer is 750 kms from here so I don't think it is the pressure from Indian pushing this special here.
 

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Howdy Folks,

The 1st H-D dealership I ever entered seriously looking to purchase a bike was the one in Brenham, Texas, in 1971. It was a vintage (back then we just call'd em old) gas station in an older part of town. They had two bikes, a Sportster and a Super-Glide in what had been the office of the station, and the 2-bay garage was the service department. The owner graciously enlightened me to the differences between a XLH and a FX. I really couldn't afford either at the time, and ended up giving a high school buddy $300 for a Knucklehead chopper with a seized engine (but that's another story).

Those kind of dealerships lasted up into the 80's. I remember going to swap meets at the San Angelo H-D dealership run by Mr. and Mrs. Turner during those years, also in an old service station, albeit with a 3-bay garage; maybe four bike on the floor. The Turners had been in the business since since since the '40's and were getting ready to retire; there is no Harley dealer in San Angelo these days.

My shop was a lot like those old dealerships. A few shelves full of chrome bits, clutch cables, chains, batteries, inner tubes, and sundry other things that failed on a regular basis, a tire rack with a dozen tires, some shop T-shirts, a few basket cases, and a work-shop out back that could do anything involved with rebuilding an old bike except chrome-plating, which we sent to Brown's in Paducah, Kentucky. Gosh, I miss those old grease-pits and the folks who hung out in them...

--- Randall
 

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Local Harley dealer was offering the following deal last month. Not sure how long this lasts. Buy a new 2014 Bike and they will guarantee in writing that if you come back in within one year and purchase a 2015 they will give you 100% of what you paid for the bike on a trade for a 2015. This is bottom line without sales tax, prep fees etc. There are no mileage stipulations. As a former businessman I cannot figure out how this business model can work.
 

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Discussion Starter · #16 · (Edited)
I see Indian Motorcycles as another American built choice in motorcycles. It is my hope that HD sees it as enough of a concern that it brings the R&D team back to work. A motorcycle is much more than the 'bling' that can be added. It is more than a paint job. The technology that HD has added is mainly the radio and the abs that can be added as an option. When I rode the Rushmore series, I did not find enough there to justify the additional cost.

When I was researching bikes for my next purchase, I did not only look at American built bikes but the Japanese brands as well. I knew I wanted a bagger as opposed to a strictly touring bike because I wanted to cruise around town when not on a long run. My criteria was a bike that could tour but was also fun to run around on short jaunts. HD had some but not worth the cost due to being based in the 40s and 50s as far as technology. Of course, they had the 'Name.' Kawasaki, Suzuki, and Yamaha had some decent offerings but they just didn't feel right to me.

I had been watching all the available information on the Polaris built Indian and read the various posts in the HD forums concerning the brand. The forums were mainly complaining on how it was going to be a Victory with an Indian logo...and we know they were wrong. When I finally got the chance to ride the Polaris Indian line...I discovered a bike that was technologically advanced and still retained the history of the Indian line from long ago. Due to some of the 'rabid' owners of the HD line, I don't believe Indian will steal away a large percentage of those riders. The current quote is the average HD rider is 46 - 52 years old making in the range of $83 - 92K per year. We are getting some of those riders but we are also getting many younger riders who are looking for more than a name.

HD should not feel threatened by the Indian line but they should be concerned. They are seeing a bike that appeals to a group of people across the age barriers. They are seeing a bike that competes directly with their line from the Sportster all the way to their Ultra. What they are also seeing is a bike that has the majority of the bling on it already and not having the need to dump and additional $5K in options to make it the way it should be.

Whereas, HD corporate does not view the Indian line as any form of threat, the dealers see it as an opportunity to pick up additional sales. That is why they own both a HD and Indian dealership.

My hope is that HD remembers where it came from and who rides it's bikes, as well as starting to invest in making a bike of the quality desired, the technology needed, and removes the requirement to dump so much additional ca$h in the bike to make it into the bike it should be.

We can spend the rest of our lives...whatever we have left....with hopes and visions of the future but the point is...if Indian continues on the path they have selected...they are going to continue to be a major player in the American made iron that riders want.

Semper Fi,
DrZ
 
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HD would be mad if they didn't take notice of Indian / Victory, although I'm sure they keep an eye on Triumph and Honda too. From my understanding Indian has more American made parts than any HD does, they seem to be better made and finished than the Harley's too.
 

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Big Daddy is on the mark with his comments. I even went to the HD 100th Anniversary. Loved it. Have my collectors stuff. As we move through different phases of life we get to that special place. I am there as so as my butt hits my Vintage saddle.
 

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I see it as a very smart move to introduce the Scout bike at this time. This machine is attracting new buyers of all ages. It's the right time for this style of bike, it's timeless looks with a modern engine is appealing to riders of all ages and experience. I hope the Indian Motorcycle brand's future is so bright you got to wear shades.
 

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Well. Never bought a HD, Been pretty much a Euro-Guy. After my last BMW, I decided I was going to quit riding all together. But I found out what having Motorcycles and Riding, in your Blood means. I love my Truck, but I really still love to ride motorcycles every day or close to it, after all these years. Well Bike week came this past spring, a friend, who loves to spend money said, you have to see these New Indians, I said OK, let's go down to the dealership on Saturday, during Bike Week, Indian was there for the whole week with over 25 bikes to demo.

When I looked at the Indian Vintage, I said DAMN! It was beauty at first site! I still can remember just walking around it looking at the detail, the Tan Seats and Leather, Oh, The Chrome! Then I can also remember, Ok How much does this thing cost? I looked at the Indian price tag hanging on the handle bar, $20,500.00, I actually felt my heart jump! I thought, Damn, I can afford this!, I had to cool my self down, and said OK, be cool, don't look like it's your first POA! I'm thinking, I have never even owned any type of Cruiser, what was I thinking, Right about when I was finally getting my head back to logical thinking, this crazy tall REAL GOOD LOOKING BLONDE, who loooks like she has never road a Bike in her life, walks up to me and says, You'r going to take a test ride on a New Indian right? Oh, I said, I'm thinking about it, why the hell did I say that? Yeah, Yeah i'd like to try a vintage like that one on the floor over there, that Black one. She says sure just sign up take this ticket out side and enjoy your ride!

I'm 68 YO, I'm actually nervous! This is a cruiser, I never rode a big cruiser like this, We went on a 20 minute ride in a small group, ten minutes into the ride I said to my self, Holy crap I have got to have this Bike! 2 weeks later after much mind craze and deliberation, I said, Man your dealer is only 6.5 miles from you, They were super nice, I went in on a Friday to talk, They had another Black Vintage on the floor, I sat on it, the sales/owner Dave said well what do you think? I said lets work up a deal! I rode it home the next day on Saturday,

Yep, I'm star struck, In Love, Infatuated, My wife says to me one night when she walked into the garage, did I just see you kiss that bike?
Well,.... Yeah, I guess I did, kind of, you know, remember us not too long ago......
 
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