It is odd that they talk about over production and under sales. Probably true enough. However, it is odd, because Dad was just quoting me a DealerNews article the other day. In that article, second hand from someone else, it was saying that HD dealerships are less effected because they can order a lower numbre of bikes per year, or even one at a time for special orders. Japanese makers end up shipping by the container and pre-selling to the dealers in advance. The article said that the stacks of crated bikes, atvs, and other big units stacked up behind Jap dealers made it harder for the dealers to turn a profit, as opposed to the HD dealer that is only dealing with the inventory on the floor.
And though Harley’s woes pale in comparison to what the automakers face — Harley’s revenue dipped 2 percent last year while Detroit was crashing — overproduction and loose lending practices have burdened the company’s finances.
I figured the loans with the 'no money down' was going to hit them too. The one thing that they do that should be fine is the HD buy back program that they do occasionally. That is the program where you can buy a sportster, make the payments, and then trade it in a year later on a larger bike, without losing the payments that you have made. They do that in a much lower quantity I expect than the 'no money' prgoram. And the used sporsters are sold abroad so they don't clog up the American market for the most part. Tax laws in Europe make it possible to resell the bikes for more over there and still make it a good deal. Although I've never really understood how.
In a pattern similar to that of the housing bust, Harley goosed sales by luring many buyers with no-money-down loans. A subsidiary created about 15 years ago, Harley-Davidson Financial Services, made those loans and packaged them into securities to sell to investors. As the credit market skidded, so did this subsidiary.
HD may be the most visible of the bike manufactuers to suffer from this, but they won't be alone. Honda is probably offsetting with car and jet money and spreading it around. I think Indian is in a good place, because they are still selling such a small scale to collectors with deep pockets, and not yet to the 'every-rider.' It seems like if Indian can survive the next few years they will grow along with the econonmy upswing.
I'm suprised HD isn't asking for a bail out, and taking all the free money that they can. Why not. If the gov is going to offer it, you might as well take it.
Flynn asked for the American made porn industry to be bailed out. Cheaper imported porn is making the highly regulated industry non-competitive.
