Sidecar Flip
Living Legend
I pulled an article from the New York Times financial about HD. Check the stock drop....
Of course HD admits that small displacement bikes are flying off the shelves....
Harley-Davidson Takes Its Lumps
By Jerry Garrett
Tags: Harley Davidson, honda
If motorcycles generally get better mileage than cars, and if everyone is so concerned about the price of gasoline these days, why are motorcycle sales cratering instead of skyrocketing?
It’s the economy, stupid (with apologies to Bill Clinton).
“When the economy turns sour, motorcycles are considered a luxury item, and people stop buying them, it seems,” notes Kurt Antonius, a spokesman for American Honda, whose motorcycle sales, like almost everyone else’s in the industry are off around 20 percent so far this year.
Harley-Davidson, which enjoyed two decades of record sales and earnings growth leading up to 2007, is the latest to feel the sting. Sales for the second quarter of 2008, which were announced Thursday, dropped by 23.3 percent from the same period last year (which was not a great quarter). Earnings were down 16.7 percent. Its stock did rise to $39 a share Thursday, though, as analysts had expected even worse results. But that’s down nearly 50 percent from its high of $76 a share in 2006.
In April, Harley-Davidson cut back production and reduced its workforce. It announced plans to ship to dealers between 76,000 and 80,000 bikes during the second quarter, and even less — 74,000-78,000 — for the third quarter, the prime summer selling season. As recently as last year, Harley shipments approached 100,000 units per quarter. But that’s when Harley’s sales first started to slow, causing it to fall well short of Harley’s dream of selling 400,000 bikes for the year. That may be a dream that just went poof for the foreseeable future.
It’s not like Harley-Davidson is hurting for money. The company still raked in $1.67 billion in total revenue for the quarter. It also recently announced plans to acquire MV Agusta, a boutique Italian bike maker, opened a lavish new museum, and previewed for the press some splashy special edition models for 2009. Those seem to sell out whether the economy is circling the drain, or not. Later this month, Harley will unveil its full line of 2009 models, and an extensive celebration of its 105th anniversary kicks off in August.
“We expect U.S. economic conditions and ongoing consumer concerns to continue to create challenges at least through the end of the year,” said Jim Ziemer, Harley-Davidson’s chief executive. Still, he said, the company expects to ship more than 300,000 bikes for 2008 — a total seldom exceeded in company history.
But Harley’s business probably can be expected to suffer more than many motorcycle manufacturers, because of the lack of diversity in its lineup of mostly cruiser bikes. Mr. Antonius noted some of the drop in Honda’s motorcycle sales have been offset by increased sales of scooters.
“Scooters,” he said, “are flying off the shelves.”
Wonder what a Harley-Davidson scooter might look like?
Of course HD admits that small displacement bikes are flying off the shelves....
Harley-Davidson Takes Its Lumps
By Jerry Garrett
Tags: Harley Davidson, honda
If motorcycles generally get better mileage than cars, and if everyone is so concerned about the price of gasoline these days, why are motorcycle sales cratering instead of skyrocketing?
It’s the economy, stupid (with apologies to Bill Clinton).
“When the economy turns sour, motorcycles are considered a luxury item, and people stop buying them, it seems,” notes Kurt Antonius, a spokesman for American Honda, whose motorcycle sales, like almost everyone else’s in the industry are off around 20 percent so far this year.
Harley-Davidson, which enjoyed two decades of record sales and earnings growth leading up to 2007, is the latest to feel the sting. Sales for the second quarter of 2008, which were announced Thursday, dropped by 23.3 percent from the same period last year (which was not a great quarter). Earnings were down 16.7 percent. Its stock did rise to $39 a share Thursday, though, as analysts had expected even worse results. But that’s down nearly 50 percent from its high of $76 a share in 2006.
In April, Harley-Davidson cut back production and reduced its workforce. It announced plans to ship to dealers between 76,000 and 80,000 bikes during the second quarter, and even less — 74,000-78,000 — for the third quarter, the prime summer selling season. As recently as last year, Harley shipments approached 100,000 units per quarter. But that’s when Harley’s sales first started to slow, causing it to fall well short of Harley’s dream of selling 400,000 bikes for the year. That may be a dream that just went poof for the foreseeable future.
It’s not like Harley-Davidson is hurting for money. The company still raked in $1.67 billion in total revenue for the quarter. It also recently announced plans to acquire MV Agusta, a boutique Italian bike maker, opened a lavish new museum, and previewed for the press some splashy special edition models for 2009. Those seem to sell out whether the economy is circling the drain, or not. Later this month, Harley will unveil its full line of 2009 models, and an extensive celebration of its 105th anniversary kicks off in August.
“We expect U.S. economic conditions and ongoing consumer concerns to continue to create challenges at least through the end of the year,” said Jim Ziemer, Harley-Davidson’s chief executive. Still, he said, the company expects to ship more than 300,000 bikes for 2008 — a total seldom exceeded in company history.
But Harley’s business probably can be expected to suffer more than many motorcycle manufacturers, because of the lack of diversity in its lineup of mostly cruiser bikes. Mr. Antonius noted some of the drop in Honda’s motorcycle sales have been offset by increased sales of scooters.
“Scooters,” he said, “are flying off the shelves.”
Wonder what a Harley-Davidson scooter might look like?
- 1.
July 18th,
2008
9:08 am
Maybe people - including those who would buy these bikes - are tired of losing their hearing caused by the excessive noise of these bikes?
— Posted by Smotri