In case anyone is interested.

Inventory slump hurting Harley's turnaround

The motorcycle maker's long-term strategy is running afoul with some dealers and constraining inventories of some pricier models. The biggest U.S. motorcycle maker, has seen shares drop by more than 12% in the last week.

CEO Keith Wandell, hoping to use Ford (F +4.50%) as a template in Harley's turnaround, is streamlining production, cutting labor costs, pushing Harley into emerging markets and improving stores and customer service.

This will help Harley improve a U.S. market share that stood at 58% in the third quarter over Polaris Industries (PII +1.84%), Honda (HMC +4.03%), Yamaha, Suzuki, Kawasaki, BMW and other peers.

But Wandell's long-term strategy for Harley is running afoul with some dealers and constraining inventories for some of its pricier models, such as the Touring. One Minnesota dealer, St. Paul Harley-Davidson, has sued Harley for restricting international sales and third-party sales on portals such as eBay (EBAY +2.37%) and Amazon (AMZN +0.86%).

Moreover, extensive restructuring of one of its largest manufacturing facilities in York is limiting production of some of the company's more expensive and most profitable models, leading to overall margin decline. (See our previous article: Harley-Davidson Q3 margins squeezed by plant restructuring.)

A recent new dealership survey by the investment firm Robert W. Baird confirmed that the inventory of new Harley motorcycles is at its lowest point in 10 years, which will result in lost sales in the near-medium term as the York facility restructuring is expected to continue until 2013.

 

Only shortage I see at the dealers is the CVO's, but I figured that's because they only make a limited number.

 

Interesting read, thanks for posting.

I think MOCO is going to have to rethink it's policy on the third party sales and international stuff.

With the restructuring of the York plant, once that's complete, production could ramp up again....But I think the production number will remain lower until the economy as a whole rebounds...

 

It's about bloody time one of the US dealers finally got sick of losing money on international sales and ebay and finally decided to do something about it. I as an international buyer that has been excluded from purchasing HD licensed products internationally wish the HD dealership at St. Paul good luck with their suit.

 

on the eBay thing, it is possible that some of the stuff sold through other avenues labelled H-D is counterfeit.

Or H-D stuff that somehow made it's way out of regular distribution

( for example I have Gap jeans I boyght on the street in Hong Kong for $2--- identical to what's in the stores-- it has to have come out the back door of the factory)

But in the case of hard parts sold as H-D what happen if the new chrome brake caliper bought on eBay doesn't work

H-D is in a tough position there.

2.) H-D would do well to better represent the customer when the dealer is an ***.
Take away the rights if a dealer is not doing a good honest job.

PHX would be better off with 1 or 2 good dealers than the 6 or 8 in the area- maybe.


Inventory- there is a lot of stuff jammed into warehouses- at the dealer in Gilette, they had TWO buildings of excess inventory used bikes.
H-D financial is sitting on a lot of repos, none are gaining in value.

2¢

Mike

 

I hope Harley cleans up a few things starting with the small quality and design issues with bearings, fuel pumps, electrical gremlins, frames that leak rusty water, compensators, and so on. I agree the dealer network needs an overhaul but I don't see it as being nearly as bad as Ford. There are plenty of outstanding dealers out there, but a few need the bar raised on them to either improve or force them out. Last thing. Seems like the glut is with used bikes not the new ones.

 

[quote=hopperop;9095252]In case anyone is interested.

Inventory slump hurting Harley's turnaround

The motorcycle maker's long-term strategy is running afoul with some dealers and constraining inventories of some pricier models. The biggest U.S. motorcycle maker, has seen shares drop by more than 12% in the last week.

CEO Keith Wandell, hoping to use Ford (F +4.50%) as a template in Harley's turnaround, is streamlining production, cutting labor costs, pushing Harley into emerging markets and improving stores and customer service.

This will help Harley improve a U.S. market share that stood at 58% in the third quarter over Polaris Industries (PII +1.84%), Honda (HMC +4.03%), Yamaha, Suzuki, Kawasaki, BMW and other peers.

But Wandell's long-term strategy for Harley is running afoul with some dealers and constraining inventories for some of its pricier models, such as the Touring. One Minnesota dealer, St. Paul Harley-Davidson, has sued Harley for restricting international sales and third-party sales on portals such as eBay (EBAY +2.37%) and Amazon (AMZN +0.86%).

Moreover, extensive restructuring of one of its largest manufacturing facilities in York is limiting production of some of the company's more expensive and most profitable models, leading to overall margin decline. (See our previous article: Harley-Davidson Q3 margins squeezed by plant restructuring.)

A recent new dealership survey by the investment firm Robert W. Baird confirmed that the inventory of new Harley motorcycles is at its lowest point in 10 years, which will result in lost sales in the near-medium term as the York facility restructuring is expected to continue until 2013.[/quote]

What this means is that our late model used bikes are going to hold their resale value like Harleys used to. Less available new touring bikes will drive up the market for used ones.

This should make all of us very happy. Except maybe those trying to get a deal on a new bike...

 

I see what you're saying there. I'm not really a fan of stores/dealers using eBay as a store front. I could see eliminating that part of it, but the discount sites, like Surdykes, Lake Shore, and the like, would be a real bummer.

Guess we'll see...

 

[quote=PFWiz;9095480]AND ...harley knows that we won't be as likely to buy a new bike if we can't get a good deal on the old one we are selling....It is always (in the long term) to keep supply below demand...

 

It couldn't possibly be an attempt to artificailly drive up value by intentionally retarding production. Slowed production, ban on internet sales, ban on in store sales; all these tactics are just HD grasping at straws in a downturn economy, to maintain the absurd profit they have enjoyed for too long. F#%K HD stock, buy lead and gunpowder.