Harley’s Financial Woes

The NYTimes ran an article in the Economy section a couple of weeks ago entitled Harley, You’re not getting any Younger. Being interested in all brands of motorcycles, I dove into the article.

The story told how Harley’s core customers, the aging baby boomers, are currently unwilling to shell out 20K plus for a “big toy”. Combine Harley’s inability to achieve a good market strategy to lure younger riders with a slew of no-money-down loans that can no longer be securitized and sold and the result is a major downturn for the company’s profits and stock price (down 30% and 70% respectively). Just as with home loans, a number of borrowers started defaulting on loans. Investors stopped buying securities and now Harley is suffering.

The article went on to say that Harley had previously lived through troubled times. Recently reaching the grand old age of 106, Harley seeks to rise again. But it will take some serious marketing strategies to get their average 49-year-old “biker” to buy a new bike more often. It will also take cutting down on production, which had increased to meet demand only a few years ago and making sure the retail price of the new motorcycle doesn’t exceed the suggested manufacturer price. (Seriously, the dealer network wrestled pricing control away from H-D during the boom seller’s market years.)

It looks to me like Harley, with roots planted firmly in popular culture and image, will have to seek out a broader sales base and think seriously about its appeal to the younger crowd as more of its aging customer base retires from the road.

Naturally, I was intrigued to see what Harley PR put out in response:

Hell for Leather magazine wonders why Harley had zip to say about their financials, as discussed in the Times. Maybe someone can explain this to me and why Harley chose the response they did? I see the financial situation more as a dollars and sense issue than one of patriotic optimism.

But then I ride “jap crap”.

; )