Randall K. Wilson
Junior Member
Mr. htiger....are you willing to pay for set-up, shipping, and Documentation fees?
Declining Market?
- Thread starter juspassinthru
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Mr. htiger....are you willing to pay for set-up, shipping, and Documentation fees?
Randall K. Wilson
Junior Member
From Sept.23, 2008 Los Angeles Times
But there's one Harley-Davidson Motor Co. item that hasn't been selling as well in the U.S. recently: the motorcycle itself.
Sales of the heavyweight bikes were down 10.2% in the first six months of this year, and the Milwaukee company is cutting back production as much as 40% to whittle its inventory.
FOR THE RECORD:
Harley sales: An article in Tuesday's Business section about falling sales of Harley-Davidson Motor Co. motorcycles said the company planned to ship 203,500 to 207,500 motorcycles this year, a drop of more than 40% from its record sales of 349,000 in 2006. However, Harley said Tuesday it would ship 303,500 to 307,500 bikes this year, a drop of as much as 13% from 2006. —
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"For 15 years, Harley-Davidson couldn't make enough motorcycles for middle-class guys," said leisure industry analyst Robert J. Simonson of William Blair & Co. "They couldn't make enough of what was making them a lot of money, so they didn't design product or market to other groups. Now they need to."
Many dealers are also feeling the pain, as the economy weakens, credit tightens and the motorcycle market becomes increasingly transportation-oriented. Some are even starting to offer products that would have been sacrilege in better economic times: They're selling fuel-efficient, foreign-made -- even electric -- scooters on the same floor as Harley's flag-waving, thunderous internal-combustion cruisers, also known as Hogs.
It is, to be sure, a culture clash, but desperate times are calling for desperate measures at some dealerships, especially in California and Florida, the top two motorcycle markets, and other areas that have been more severely affected by the down economy.
At Glendale Harley-Davidson, sales are off about 20% this year, with high-priced touring models, "usually our lead products," particularly hard hit, said Emily Vindeni, controller of the shop.
Lately, Vindeni said, the bikes sold aren't so much for leisure but necessity. People "are not going to spend $15,000 to save gas. They're going to spend $10,000 or less."
What is selling at the Glendale shop is Harley's smallest, lowest-end bike, the Sportster, as well as its entry-level sport bike, the Buell Blast. In the spring, that short list may include Asian scooters.
"We're looking into that because you're seeing more and more of them on the road," Vindeni said. "There are quite a few Harley-Davidson dealerships that have already gotten into that business."
Even so, Chief Executive Ziemer frowns on the practice of selling inexpensive scooters. It's not only because the profit margin on a $28,000 motorcycle is much higher than it is for a $4,000 scooter, but also because it dilutes the character of the brand.
"I don't think that it serves them well," he said. "They're selling to a different customer base. If someone's looking for a very inexpensive product for transportation, that person was not going to buy a Harley-Davidson anyway."
In spite of the current trend toward smaller two-wheeled vehicles, Ziemer said Harley-Davidson would remain a recreational product.
The drop in domestic sales, which account for 75% of Harley's revenue, to $1.9 billion in the first half of the year continues a downward trend. Sales in last year's first six months were 5.7% lower than in the same period the prior year.
The company's net income slipped 4.5% last year to $993.8 million from $1.04 billion a year earlier and is on a slower pace this year, with $410.4 million earned in the first half.
The shares peaked at $75.50 in November 2006 and have been heading south since. They closed Monday at $41, down $1.80 a share. The stock's value has slid 12.2% so far this year and 46% from its peak two years ago.
Things could be worse, Ziemer said.
They purchased a classic Italian motorcycle maker with a long storied racing history. That's something that Harley has not had in a long time. The MV group makes high-end limited production motorcycles that sell like hotcakes in the EU market.
In the US market, what machines make it here, are hard to find and highly prized. The market for these machines never really gets slow. Limited numbers and high prices limited who is buying them. Those that buy 'em tend to hold on to them a long time.
When was the last time Harley offered a $45,000 machine with a production run of less then 500 and had them all sold before the first one came off the line? Both the MV group and Ducati do this on a regular basis.
So, I think it's a good investment for Harley. Now if they keep their hands off the engineering/development side of MV's house it will be a money maker for them...
I'm kinda hoping Harley will let them develop their MotoGP bike and go racing...
Unfortunately, if the VR1000 was any indication of Harley's commitment to something other than drag racing, it will never happen. They used the VR to develop the V-rod motor, test it, then shutdown the program. They found they could not keep up with the other manufactures in improving performance. All of the non-race equipment, transporters and so on, was given to the drag racing program that was started just after they killed the VR project...
Let me finish this before I ramble on off topic any further...
If Harley takes a "hands-off" approach to MV, it will make them money.
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threesteps
Junior Member
I think the comments are nailing it. Bottom line....if you want a bike check out the market to get and idea of the prices then go for it! I agree with Smitty, don't count on your Harley appreciating in value.
Another "a guy I know" story. A guy I know bought and sold used bikes this past spring and summer. Was able to get some great deals from folks needing to reduce their debt. He brokered the bikes to a used bike dealer in Alabama and made some bucks. The dealer he sold to was willing to buy all this guy good get. Apparently, the used bike dealer's source for bikes has been the auction in Atlanta. However, a lot of the Harleys at auction were being bought up for European buyers willing to pay significantly higher prices ($ decline to Euro helped cause this). Having writtien all this, I doubt the European market is going to have a big impact on what you can buy a used Harley for from an individual.
Another "a guy I know" story. A guy I know bought and sold used bikes this past spring and summer. Was able to get some great deals from folks needing to reduce their debt. He brokered the bikes to a used bike dealer in Alabama and made some bucks. The dealer he sold to was willing to buy all this guy good get. Apparently, the used bike dealer's source for bikes has been the auction in Atlanta. However, a lot of the Harleys at auction were being bought up for European buyers willing to pay significantly higher prices ($ decline to Euro helped cause this). Having writtien all this, I doubt the European market is going to have a big impact on what you can buy a used Harley for from an individual.
Randall K. Wilson
Junior Member
Mr. tiger....do you kow of an individual who bought a brand new Harley and DID NOT pay the shipping, set up fee, and documentation? I'm interested in knowing that? Obvioulsy I have never ask anyone what they paid for a bike unless it was family. However as I recall shipping, set up and I think doc fees have been a given in this area?
However last year when a 2007 Ultra was still sitting around late in the calender year, I "overheard" a saleman tell the customer since the 08's had came out they would delete the shipping and set up fees and same this gent around maybe a thousand dollars or close to it anyway.
So I know it most likely has been done, but then the party was technically buying a year old bike which had never been titled. Since the 08's had already been on the floor maybe 4 months or longer.
Randall
Everything is negotiable with these dealers depending on the dealer, time of year and how many they sold so far that month and also how many they have been allotted and are in storage waiting to be sold. The shipping, setup or documentation fees can each be waved by the dealer if they want to make the sale.
There's what is called a floor plan which is basically an outstanding loan on the unsold vehicles and it will eat into the net profits if the vehicle sits too long without being sold. The longer it sits, the less profit is made.
There's a $3-$4K markup on these bikes depending on the model and if they are low on sales for that period, you can negotiate more than you think. I've done it.
Here's a link if you don't mind spending a few bucks to verify the cost of these bikes.
Harley-Davidson
You'll also hear the more seasoned salespersons tell you that the MOCO REQUIRES them to charge certain costs which I don't believe for a minute. Then on the other hand if you call the MOCO about an issue with a bike/dealer, they will tell you that the dealers are independently owned and franchised and they cannot dictate policy for them. Been there also.
An educated consumer is the dealers worst nightmare.
Everything is negotiable with these dealers depending on the dealer, time of year and how many they sold so far that month and also how many they have been allotted and are in storage waiting to be sold. The shipping, setup or documentation fees can each be waved by the dealer if they want to make the sale.
There's what is called a floor plan which is basically an outstanding loan on the unsold vehicles and it will eat into the net profits if the vehicle sits too long without being sold. The longer it sits, the less profit is made.
There's a $3-$4K markup on these bikes depending on the model and if they are low on sales for that period, you can negotiate more than you think. I've done it.
Here's a link if you don't mind spending a few bucks to verify the cost of these bikes.
Harley-Davidson
You'll also hear the more seasoned salespersons tell you that the MOCO REQUIRES them to charge certain costs which I don't believe for a minute. Then on the other hand if you call the MOCO about an issue with a bike/dealer, they will tell you that the dealers are independently owned and franchised and they cannot dictate policy for them. Been there also.
An educated consumer is the dealers worst nightmare.
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flh canuck
Active Member
Not sure about the price of new bikes out there but there are sure some good deals to be had on used bikes these days, especially compared to a few years back.
The way things are going with the economy, I would probably hold off buying a new motorcycle for a while as I suspect that prices might drop a bit more in the next few months....
The way things are going with the economy, I would probably hold off buying a new motorcycle for a while as I suspect that prices might drop a bit more in the next few months....
Everything is negotiable. The dealer wants you to believe that certain fees, etc., are "required" as that strengthens their bargaining position. The less you question, the stronger their position.
H-D dealers are not a part of H-D corporate. They're independent. They can give the bikes away if they want to. MSRP is merely a corporate tool to manage market stability, set customer expectations, establish a component of quality, differentiate their products and create "pull" through their distribution channels.
The deal you negotiate is between you and the dealer. I'm willing to pay MSRP + tax + title fee. Nothing more. I've let several salesmen at different dealers know that; the first one to call me with that deal on a bike I want will make the sale.
I'm a customer--not an idiot.