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Cruiser
Posts: 68
LONDONDERRY NH | http://www.motorcycledaily.com/25november09_hdcreditarm.htm |
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Visionary
Posts: 1436
| All bike manufacturers are getting hurt with the economy the way it is. Yamaha took a bath and Victory hasn't been in the black for quite a while. HD isn't doing any worse than all the others.
Profits and sales have been over inflated for several years and I'm thinking this was bound to occur eventually. The good news is perhaps the reduced numbers of bikes being manufactured will slow the depreciation that mass production has produced. |
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Iron Butt
Posts: 725
Reno County, KS | Hopefully Victory is watching and learning. Harley tried to reach into the sport bike scene and it blew up in their face. I'm still a firm believer that Harley sales are based on iconic appeal and not on quality. That same appeal doesn't really lend itself to the banking industry. Give it another decade and Harley will be sold with the other bikes on the same floors. I predict that it will be the other makers calling the shots as to if Harley can be viewed with thier bikes on the same sales floor. I think they'll survive but they are going to have to do something to stay competitive. It's not going to make the traditional H.O. happy when they see what HD has to do for damage control to make ends meet. Just like Honda upset the masses by taking the Wing back overseas for production. |
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Iron Butt
Posts: 619
Southeast Iowa | I agree that ALL bike manufactures are hurting due to lost sales however I think HD will be hurt more than any other manufacturer. No way I'm going to type long enough to go into details but here is what I think
1. Overhead - This is everything from Sales, Marketing, R&D, Equipment, and bricks and mortar. They have to 1/2 all of this to get in line with their current business. I think they are both too slow and too arrogant to fix this in a timely manner. HD is not an agile company nor do they have deep roots in lean manufacturing. The Kansas City plant for example is highly tooled. I'm sure it's a very profitable plant at full production but when volume drops by 30-40% I can guarantee their RONA (return on net assets) stinks. The plant is full of "landmarks" that will make it very difficult for them to be efficient at 50-60% of capacity.
2. Diversification - HD has all of their eggs in the motorcycle basket. Now they have all of their eggs in an overpriced, under performing, classic look motorcycle basket since they killed Buell and are selling the other one. Polaris, Kaw, Yamaha, and Honda all have other sources of revenue. In fact they all stand to pick up HD business if price/value is a consideration.
There are many reasons HD will have a long road ahead of them.................and I doubt they fully understand just how painful it's going to get. I'm speaking from experience as the company that I work for has lost 60% of its sales over the last 3 years. The amazing thing is we have remained profitable the entire time. It can be done but it hurts like hell. |
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Iron Butt
Posts: 1158
Richmond, Virginia | I agree with Big Vic and Big Will (ok, so is everyone on here "Big" something) ha ha points all valid and good.
My smart ass comment to tag their points is that the only thing that is getting HD through, is that they have retail stores selling anything and everything that has a Harley Badge on it, and the Harley Bars all across the country are there selling alcohol and tee shirts, This is the only thing
really selling for them. HD has become a professional self marketer selling a name, not necessarily an outstanding product that goes with it. You can buy a lighter, thong, key ring, beer cozy, pizza maker, condom, eyeglass strap thingie, jacket, vest, boxer shorts, panties,
pocket book, anything with fringe, or a magic decoder ring ALL WITH A HARLEY LOGO, pay a premium for it and STILL NEVER OWN A BIKE. While i think this was great marketing long ago, it will be short lived ... lets face it how many tee shirts does a store have to sell to equal one bike sale.
Edited by VaParadox 2009-11-27 11:22 AM
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Visionary
Posts: 1436
| I have to laugh when I see Victory riders saying HD has a hard road ahead when in Victory's entire history it has ONLY been in the black one year before going back into the red. Yes Polaris has a big arm in a number of products but the question becomes how long do they continue to support a division that isn't breaking even or making a profit?
I've been riding a long time, seen many bike manufactures go up in sales and down. Seen the boom in ridership and the periods when a rider was frowned upon. The manufacturers made it through those LEAN periods and they will again. Just like HD, Victory is also pulling back, laying off, and trying to stay afloat during hard times. Harley having been through this before adjusted before anyone else by cutting back production in anticipation of lower sales. Their bikes sell world wide and are in high demand due to their Iconic styling and rich history. They'll weather the storm of that you can bet. However on a more personal note, I would very much hate to see them fail just as much as it pains me to see riders celebrating in their situation. We may be riding a different brand of bike but the likes of HD paved the road for companies like Victory and others. I come from a family of riders who have loved the sport of riding since motorcycle first became available to the public. I have pictures of my grandfather and his friends riding old HD singles, Indians and Hendersons. Hill climbing on their street bikes and daily commuters. I have pictures of my fathers old White a brand few if any will have any knowledge of, and pictures of my brother and I starting out on our Jawa's and Harley Sprints. Many of the aforementioned brands have long since disappeared and I would surely be saddened to see another added to the list, regardless of manufacturer. Lets all hope HD recovers soon from its economic trials and that Victory gets back into the black. It benefits us all. |
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Iron Butt
Posts: 619
Southeast Iowa | Don't get me wrong..........I'm not wanting HD to fail. Competition is good for the consumer and HD is good for Victory. My point is HD is a very large company that is used to deep pockets. It is very difficult to manage that sort of company when business takes such a sharp decline in a short period of time. I don't think they can shed expenses fast enough to avoid loosing serious money. On the other hand Victory is very small, they are agile, and fairly good at lean manufacturing. They also have the ability to share resources with their parent company and leverage some of their overhead. No doubt the are experiencing some of what HD is but on a much, much smaller scale. My bet is they can react faster and manage the business better during the downturn. |
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Iron Butt
Posts: 1158
Richmond, Virginia | Caution to the wise. Dont assume that ANY of the postings on here are wishing for the doom of HD. No one on this site wants to lose their job or hear that someone else did. What this discussion is about it development management marketing and the other issues related to tooling a big company. HD has had a long history, have they brought themselves into the new level of motorcycles, probably not. As mentioned above, will there be people who can only think inside the box and buy a traditional looking bike simply because of a brand name and "it looks like everyone elses, so it must be right" mentality? Absolutely, BUT, they dont speak for the rest of us who have the same enthusiasm, desire, balls, and wallet as they do, but WE want more. So we have to make bikes for those people, but we people also need what we desire as well. thus everyone gets what they want.. |
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Visionary
Posts: 1436
| VP, you are joking with the statement "have they brought themselves into the new level of motorcycles, probably not."??? If you buy into the rhetoric that HD has been sitting idle since the 1940's, ouch! Every year NEW bikes hits their dealership floors and they are not your grandfathers HD.
Here is the difference between someone who owns a Harley Bagger and someone who owns a Vision " ." Yep absolutely nothing. I'd argue folks buy what trip their trigger for whatever reason be it tradition or ground breaking. Me I like being different so I purchased a Vision when my beloved RG's all the sudden became popular, lol.
Will HD's profit be down this year? You bet, but they are also making fewer bikes. Will Victory's profits be down this year? You bet but again they'll adjust production.
Markets are a strange thing. You couldn't give away a Vision when I purchased mine two years back. The dealer has sold a bunch of them in the past 2 months. Funny thing is the HD dealer is selling his bikes faster than he can get them in also. 100 miles from here you couldn't give Vic's or HD's away. Choice is always a good thing. |
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Iron Butt
Posts: 619
Southeast Iowa | Teach, I have to disagree with you when you say
"Here is the difference between someone who owns a Harley Bagger and someone who owns a Vision "." Yep absolutely nothing".
Keep in mind I'm generalizing because every person is different, every situation is different, but many people ride a Harley simply because it's a Harley. Their decision is not always based on ride, performance, handling, and so on. I have 2 brothers that ride Screaming Eagle Ultras and admit that my Vision is a better bike when it comes to performance. One really likes the styling of my bike while the other one doesn't. Both agree that the Vision fits them better (one is 6' 8" and the other 6' 7" Neither one reads motorcycle magazines and have little clue what is offered by "other" manufacturers simply because they don't care. In a nutshell they are uniformed about motorcycles. Neither one rides a Harley because it's a better bike, nor because it fit's them well, or for any other logical reason. They ride a Harley simply because it is a Harley. They like having T-shirts from all over the country and every other HD trinket they can buy. Hell, I even have a brother-in-law that has a HD Ford F150. I could name 10 people that I know that fall in this exact same category. My experience with Victory owners is a lot different. For some it is their first bike, some came off of a Jap bike, and even a few came off of a Harley. In all cases Victory was not the only bike they rode before they bought. Not a single one of them bought a Victory just because it was a Victory. In every case they made their decision based on style, performance, handling, or something else that was important to them about the bike. Harley riders tend to be more about the "Harley Experience" than the motorcycle itself. Many view HD as a status symbol and their pass to being considered a "biker" This is not true for all but you won't have to ride far to see them parked outside of bars on the weekends.
Teach - Keep in mind that I am generalizing so there are people that made different choices for different reasons. Just curious but did you own a Harley before you bought the Vision? |
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Visionary
Posts: 1436
| Big Vic, we all know someone riding a HD because it is "The" brand. I would still maintain there is NO difference between the guys riding HD baggers and us. You see we aren't riding the Vision because of this reason or that, and they aren't riding their HD's for this reason or that. We ride and own what we do because it is the bike we wanted/liked.
So you are right we could split hairs over the 106 producing more torque, or better ergo's, or better anything.... At the end of the day NOBODY and I do mean NOBODY buys because of performance or ergos, etc.... They buy because they LIKED it. The other stuff is all trivial compared to "I like it." It all depends upon what the persons expectations are when they walk into a dealership. For example you may not care about torque, hp, etc.... but if the motor makes it all the better. It isn't the selling point but it is a point.
That was the reasoning behind my comment. I love my Vision, not for the same reasons you do but do just the same. I have friends who love their HD. The reasons really aren't important, they love their bike. So there is zero difference between me and them.... we love our bike.... with all their strengths and weaknesses.
I've owned a half dozen HD's, a couple GoldWings and loads of other brands, about 25 bikes over the years. Logged probably somewhere near about 500k miles (likely more), in about 20 different countries but I never really keep track. The last 2 bikes were HD RoadGlides. The 99 RG was a dream bike, the 2007 I traded in on my Vision sucked (IMO) so I parted with it rather quickly. I'm not exactly what you'd call brand loyal, I ride what I like and it is just that simple. |
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Visionary
Posts: 8144
New Bohemia, VA | 26.5 inch seat height, large floor boards, not found on any other out the box. I guess that is what I liked. |
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Visionary
Posts: 1436
| varyder, might be. Then again you could have gotten that seat height and longer floorboards with a little modification to other bikes (yes I saw out of the box). The point is YOU wouldn't be happy on a HD and some dude riding a HD wouldn't be happy owning your Vision. It is all about what you want, what you like. Humans are funny creatures. |
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Visionary
Posts: 8144
New Bohemia, VA | I never knew what a Vic was and would have bought a wing over an HD. But I was struck and stuck on the ergo's in print...
the all day ride is what I was looking for...
Edited by varyder 2009-11-28 8:16 PM
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Tourer
Posts: 495
Carrollton, TX | I have to agree with most of what Big Vic said. Most of my friends that ride Harley’s ride them because they have the Harley name on the side. They made a decision on the bike they bought like my daughter used to decide on what clothes to buy, it was all about the label and the status. They want to belong just like my daughter wanted to belong by wearing a certain brand of clothes. I started riding at the age of 9 and am now 54. For over 8 years I had been refining a list of the features I wanted in my next bike. I have participated in a half a dozen motorcycle focus groups sponsored by manufactures looking to get feedback on what we wanted in our next cruiser or touring bike. Almost everyone agreed on the same features and priorities and at the end we all asked why someone didn’t build a bike like the one we all want. When I heard about the Vision I could not wait to take it for a test drive as on paper it had almost everything on my list I wanted in a touring bike. After my first test ride I knew the Vision was the bike for me as it nailed about 98% of what I had on my list. The Vision was so good it could have had any stupid name on it and I would have bought it. I love what Victory did… they brought innovation to the market. No matter what business you are in if you don’t innovate you will die and new paint schemes and added chrome is not innovation. I love my Vision but if someone builds a better bike next year I will buy it no matter who builds it and I hope someone does because I want everything to get better. My bet is no one will build a better bike than the Vision or the new future versions of the Vision for some time to come. The good news is I have had several Harley owners tell me the Vision will be their next bike. Once they ride it they are hooked and some of them have grown past the Harley label thing and become true riders. |
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Iron Butt
Posts: 619
Southeast Iowa | Teach - I am happy to just agree to disagree on this one but to be honest I think your response makes my point that much stronger. You are a rider with an open mind. You have ridden tons of miles all over the world on all types of bikes. You now own a Vision because you my friend are a true biker not just a motorcycle owner. I would bet you that you are familiar with most brands and know what their strengths and weaknesses are. My guess is you have friends on all types of bikes and don't just run with "the pack" as some feel the need to do. I know people on all brands and types of bikes that are what I consider to be bikers. These people will speak honestly about their bikes and will usually want to ride yours for another motorcycling experience. Teach - These are not the people I'm talking about. I'm talking about the large group of HD owners that won't consider Victory or any other brand. With all your riding experience you have to know they exist too. They are the guys that don't wave at your Vision on the highway. They are the guys that act like your invisible when you park next to their bike. They are the group of bikes that pass you on the 4 lane and won't look over at you or give you a smile. And yes these are the people that only buy HD because it says HD and they ARE NOT like me.
Edited by Big Vic 2009-11-29 9:26 AM
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Iron Butt
Posts: 742
North Orange County CA | I think we have strayed from the the point a little but what the heck I'm diving in too.
I would like to address Teach's point first.
"Here is the difference between someone who owns a Harley Bagger and someone who owns a Vision "." Yep absolutely nothing".
I agree with this statement HD Bagger, Goldwing, BMW and Vision riders have a lot more in common than do HD E-Glide and HD V-rod owners.
Engineers design these bikes to accomplish certain tasks, because motorcyclists who buy "touring" machines or "baggers" generally make decisions on a small and reasonably well defined set of criteria. Things like reliability, dealer network and parts availability, comfort for long days in the saddle, power, two-up handling, weather protection, fuel capacity, GVWR (luggage and passenger carrying capacity) amenities like communication and adjustable suspensions all play major roles in our decision making process long before the gut issues like style, color and brand push our buttons.
We've already ruled out 95% of the machines on the market just based on functionality before we begin.
Now lets talk about the HD brand for a moment. Despite our perception, it's not really an unthinking decision to purchase an HD (or for that matter a Honda). Riders who buy a touring machine from either of those companies know that they are getting one of the largest dealer networks in the industry. An important factor for a rider who is taking a machine with modern technology on an extended trip.
In the old days you had to be able to fix your machine if it broke down. BMWs came with tool kits that allowed you to strip the bike if needed. Triumph riders carried extra electrical parts in their saddle bags (bulbs, a zener diode) we all carried points and condensers. I once tapped out a head gasket for my r-50 from a shirt cardboard on the side of a Pennsylvania Highway. But a modern machine needs a good dealer network because none of us (with the possible exception of KansasGuardsman) can fix one of these electronically controlled nightmares that we now own with out a dealer's help.
If we search this site about 90% of the complaints revolve around dealers and their inability to service issues with customers bikes. Some of these complaints are specifically dealer related some are manufacturer related.
Yeah your HD bagger friends get to collect t-shirts from all over the country and when they're in their civies an HD shirt is a external symbol that says "motorcyclist" but it also says that they made a rational decision even if it is not the one that we would have made.
It should also be noted that the profit margin of a $39.00 t-shirt is about $35.00, so selling trinkets and t-shirts only makes good business sense, especially when bike sales are slowed by a poor economy.
My guess is that HDs dealer network will survive significantly intact because of those trinket and garment sales. I will also bet that they do more business during the Christmas buying season on trinkets and T-shirts than Victory dealers (who's major supplier "is in the motorcycle business, not the t-shirt business".
HD claims $215.5 million in sales of "general merchandise" which they distinguish from "parts and accessories" for the first 3 quarters of 2009. This number is only down 12% , while bike sales are down almost 36%. I call that diversification and smart branding.
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Iron Butt
Posts: 619
Southeast Iowa | All great points Tarpits99! No one can accuse HD at not doing an excellent job of branding. Their parts, garments, and accessories are top notch and they usually have it all in stock. |
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Visionary
Posts: 1436
| Big Vic, I don't believe we need to agree to disagree. I believe we are saying the same thing. There are riders and then there are folks who own a bike. Get rid of the posers and what you have left is the folks who buy bikes for the right reasons and intended use.
The posers are the ones who won't buy with the economy down, the riders wouldn't be caught dead without a ride. By my estimation those most likely to buy a Vision or other brand of tour bike fit in that rider category. |
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Harley still struggling
