If the dealer network is poorly managed, why isn't that H-D's fault? An individual dealer doesn't manage the network, the corporation does. In addition, cutting allocations to dealers that upgraded their facilities to the H-D standard would be a cutting blow, don't you think? I'm not saying that the dealers are faultless, but to the best of my ability to determine, the relationship between a dealer and H-D is a franchise (although without a franchise fee). Other than a contract between the dealer and H-D, the dealers is an independent buisiness. But, in the automotive world, the dealer is a franchise.

On H-D's own website it states, "Harley-Davidson conducts its own market studies when considering expansion of the dealer network in the continental United States (including Alaska). This enables the company to view many market areas in a similar manner, optimizing consistent and accurate results. Based on the results of these studies, Harley-Davidson selects the markets and locations where dealerships will be established".
Harley-Davidson conducts its own market studies when considering expansion of the dealer network in the continental United States (including Alaska). This enables the company to view many market areas in a similar manner, optimizing consistent and accurate results. Based on the results of these studies, Harley-Davidson selects the markets and locations where dealerships will be established."


" Harley-Davidson does not charge a franchise fee for obtaining a Harley-Davidson dealership. All our dealers are independent business people. Each dealer operates under a contract with Harley-Davidson Motor Company to retail certain Harley-Davidson® motorcycles, Finance and Insurance (F&I), Parts & Accessories, and MotorClothes® apparel and collectibles."

So, it's not quite independant, you see. H-D puts itself in a position of knowing better.

I'm not bashing here. I love the marque and I want it to survive just like it did the depression and WWII. I ride a H-D not just because it's a motorcycle that I like to ride, but because it is a part of the USA. Sometimes in the course of its 107 year history it forgets itself and gets a bit stupid, but hopefully it gets itself back on track... again.

 

I personally know the owners of three dealers and I'm not certain your facts are correct. In fact, the MOCO DOES force them to upgrade their facility. In fact, they insist on using a MOCO 'designer' and set things up using a template that the MOCO has developed. And while they do not force them to buy product, they do send them P&A and Motorclothes on "credit" and expect to ultimately get their money from the dealer. So in essence, the dealer has bought the merchandise. And if the dealer wants to do things his/her way, they get dinged from the factory by going lower on the "preferred" dealer list. All this is fact, not MHO.

The three dealers that I know that have closed on my area were "urged" to close by the factory. They even bought back the unsold bikes to ease the closing. That's hard to turn down if you're a dealer that is suffering and under pressure to sell more bikes because your area is flooded with dealers.

You can't just open a dealership for HD. The factory goes through the demographics, picks your location and has the final say on whether they will allow you to become a dealer. I'll go back to my earlier post and insist that most of what is going on with dealer closings is a factory issue. If the market is crowded, the factory should never have allowed that to happen. But they were aggressive (and greedy) as they were going from 80k bikes a year to 300k bikes and saw $$$. Now, they are in trouble. I bet you Willie and company all have golden parachutes if things get really bad.

 

Aldo's HD in Bernarston, MA is going out of business, if not already shut it's doors.

 

Yes the MoCo has floorplan requirements for its dealers. Don't sell your allocation for a year? The number leftover comes out of nexts year order, in other words, you get fewer of the new bikes, and from what I can see, those new bikes on the floor not only draw people in (to buy merchandise) but also adds up to potential sales, or at least has in years past. The do pcik and choose where a dealer can open, but that can also be part of the blame as to why so many are now closing-too many dealerships in certain areas. When times are good, sales are up, and all those dealerships can sustain sales, but when the market dips or dives as it seems to have done, the weaker dealers fall by the wayside, and part of that blame has to be associated with the MoCo allowing those dealerships to have opened in the first place. Hopefully the ebb and flow of it all will allow the MoCo to right the company back onto a steady course of business.

 

I'm flattered. Never been quoted as much before.

 

yes Glideridemike, You hit the nail on the head. As the owner of an Excavating company I have found similar results with the economy, Alot of Landscapers have moved into the excavating field flooding the market place with too many Excavating companies. Its fine when there is alot of work going on to sustain us all but when things die down like they have in the last two yrs. Only the strong survive. First you need to have a good business model, good ethics, and you need good customers for with out customers no business can survive, you need to treat them better than the next person out there, give them service better than the next guy out there, and you need to have some money to back you up when even the best of us get slow! otherwise doom is sure to follow! At first I thought when my local HD dealer closed down and we lost our HOG Sponsor we were left hanging out in space but the club reformed as an AMA charter club and now I have to ride 25 min. to my next nearest dealer. the other dealer was 10 min. I just got spoiled thats all. Its all good now though I have made new friends at other places and life goes on as before. Hopefully Harley will have learned something from this whole thing and become stronger and more able to ride out the ups and downs of the economy as we all need to do to survive and live free and ride free! although riding does come at a cost its still the cheapest form of transportation you can get and the feeling one gets while on the open road well lets just say you can't put a monetary value on that! Priceless! Maddog

 

B/S

I see you're banned and suspect there was a real good reason. Been a service customer there for a long time, both the old Pineda and the new "Space Coast" in Palm Bay, and service gang has done me right every time. The ownership just changed last month though (sold to owners of Seminole HD) but AFAIK, they have a good rep too.

 

I don’t know if you should be flattered. You’re being quoted because people think what you said is wrong and, sorry, I’m adding myself to that list.

Many of the dealers who expanded resisted doing so for many years and ultimately gave in to pressure and coercion by the MOCO. Back in the day, dealers refusing to expand and meet “retail environment requirements” were threatened with the opening of another dealer dangerously close to the reluctant dealer. A 15 mile radius is the meager safety net provided in their franchise agreement. Back in the day, dealers who agreed to expand were promised more vehicles in order to meet the increased overhead they would be taking on. This used to be a very effective method to get dealers to conform to their “retail environment requirements” especially in metropolitan areas where it was easier for them to justify the need for another dealer or an increase in vehicle allocation. However, the MOCO recently completely changed their vehicle allocation system while also cutting production, leaving these dealers in either extremely difficult or impossible situations all because they acquiesced to the MOCO back in the day.

The MOCO can effectively shut a dealer down if they choose. They can make their own determination based on the monthly financials that dealers are required to submit that a dealer has become a credit risk and HDF will no longer extend them credit, thereby taking away their ability to floorplan vehicles or purchase product on credit, a necessity for most. The dealer doesn’t even need to have an overdue balance for this to happen.

The MOCO effectively does force dealers to purchase product. If a dealer does not purchase all of its allocated vehicles, there are very undesirable consequences to the dealer.

There are four dealers in my area that were effectively shut down by the MOCO. They were all long-standing dealerships with fine reputations. Two of them just happened to be small shops who were reluctant to conform and the other two closed after the MOCO added a new dealer 3 years ago much too close to both of them.

The MOCO can absolutely effectively shut a dealer down with its actions and policies if it chooses. It’s ridiculous to think all the dealers that are closing lately are due to poor customer service and mismanagement at the dealer level. It may be true of a few, but the vast majority is the doing of the MOCO as they finally realize they’ve flooded the market with vehicles and overdeveloped the dealer network. The MOCO is now abandoning the very dealers who stood by them through their own rough years and who helped bring them to the height of their popularity and success. I love my Harley but the MOCO is a disgrace.

 

This has always been my belief as I said in my post. The real question is whether the MCO will survive in its present condition. I remember when AMF got them and I'd hate for similar days to follow. Hopefully, they are somewhat smarter than those days.

 

JTSantes, You effectively hit the nail on the head. I don't think that anything more could be added to what you described as the MOCO trying to real in the company that had flooded the market as you described. Flow and Demand thats what makes a company thrive, one must keep demand higher than the supply which at times is a tricky beast but when it gets out of proportion as it has everyone gets stung. thanks for your insight!