Harley-Davidson Sees Profit Decline; Dealers offering discounts

ka5ysy · Jan 30, 2016

ducster said:
I went to a local bike show today. HD dealership that had a display there was offering a leftover 2015 Switchback for about $2500 under MSRP. I sat on it and a sales guy was there immediately talking up what a great deal they were offering. I thought that was odd because I thought HD's were always marked above MSRP, and NEVER marked down.

The local dealership has a bad habit of marking up bikes 3-5000 above the real MSRP so they can give you a "deal". Lots of people have caught onto this scam and go elsewhere, to the great delight of dealerships located about 50 miles away east and west.

BMW probably is not making a dent in HD sales, but the local Indian dealership is merrily doing business due to the situation above, and the fact those bikes are easier to work on and actually ride and perform quite nicely in the OEM condition. No need for Stage 1-n to make it work half decently.

Omega Man · Jan 30, 2016

During the "big" sales period a while back, there was a lot of crazy deals from the local HD dealers. On the one end, it was a $500.00 deposit to get you into the lottery for one of the allotment allowing a purchase at list price. On the other end, new bikes were snapped up from all over the country- as well as the allotment. These bikes had from $2,000 to $15,000 in accessories added and put on the floor for sale. Of course "swapped" parts were put on the shelf for sale.
Is this OK? I think it is part of "how bad do you want it" and "it's what the traffic will bear". The good part is the extra cash, for the most part, allowed the dealers to really spiff up the facilities.
OM

ka5ysy · Jan 30, 2016

Omega Man said:
During the "big" sales period a while back, there was a lot of crazy deals from the local HD dealers. On the one end, it was a $500.00 deposit to get you into the lottery for one of the allotment allowing a purchase at list price. On the other end, new bikes were snapped up from all over the country- as well as the allotment. These bikes had from $2,000 to $15,000 in accessories added and put on the floor for sale. Of course "swapped" parts were put on the shelf for sale.
Is this OK? I think it is part of "how bad do you want it" and "it's what the traffic will bear". The good part is the extra cash, for the most part, allowed the dealers to really spiff up the facilities.
OM

Interesting thing I noticed when I was teaching the HD Riders Edge classes at the shop prior to the current ownership, and probably still true. A lot of people came in and spent megabucks on chrome and other stuff for their bikes. The pulled parts were put on a shelf in the shop area, and about once a month the stuff was dumped into a trash container and hauled off. None of the bike owners seemed to have the sense to take their OEM stuff with them and either sell it online or keep it for trade time. None of them had a clue that the trade value of the bike considered none of the extra expensive stuff they put on the bike. A few smart owners figured it out and came out ok on trades, but they were a very rare group of HD owners.

rudyinla · Jan 30, 2016

I don't know what the story with HD is but in Orange County CA they seem to be the default bike. Of course we see all kinds but HD is everywhere. I'm no expert on their vintages but damn if they don't all look new. There is a comraderie they seem to exhibit amongst themselves and I for one like that. I like the looks of many of the bikes and I love that sound. I hope HD as well as all the other manufacturers do well as I want choice.

36654 · Jan 30, 2016

Motodan said:
Have friend who owns a used Harley business. He really moves units. I asked him several months ago how he was able to deliver so many 6 to 10 year old Harley's (with 30,000 to 60,000 miles) given current marketplace and financial climate? His answer surprised me, just about every unit is LEASED! He has a financial outlet underwriting loans as "leases" or 24 months with option to purchase...miss a payment and bike possession is in jeopardy. One can imagine credit worthiness of customers.

IIRC, most BMW new car sales are leases. In addition, BMWFS had been offering leases and balloon payments on BMW motorcycles since the late 1990's. I went the balloon payment route in 1999 with my current R11RS. The 3asy is the current version of the balloon plan, but isn't offered in many states.

motodan · Jan 30, 2016

36654 said:
IIRC, most BMW new car sales are leases. In addition, BMWFS had been offering leases and balloon payments on BMW motorcycles since the late 1990's. I went the balloon payment route in 1999 with my current R11RS. The 3asy is the current version of the balloon plan, but isn't offered in many states.

So right, and as you say BMW offers this on NEW bikes. However these Harley's being "leased" are old used bikes, some as old as 10 years with 10's of thousands of miles on them. Just about anyone walking in the door can get one. The underwriter must have quite the repo staff...miss just one payment, by contract, and maintaining possession becomes questionable. He says he's making a lot of money off this arrangement. Assume for those who can't obtain one through "regular" channels.

36654 · Jan 30, 2016

Motodan said:
So right, and as you say BMW offers this on NEW bikes. However these Harley's being "leased" are old used bikes, some as old as 10 years with 10's of thousands of miles on them. Just about anyone walking in the door can get one. The underwriter must have quite the repo staff...miss just one payment, by contract, and maintaining possession becomes questionable. He says he's making a lot of money off this arrangement. Assume for those who can't obtain one through "regular" channels.

I think you'll find the same phenomenon at CarMax and other large volume used vehicle retailers. But, I always find it ironic when I see a spiffy late model HD parked beside a dilapidated double wide in the middle of nowhere. But, that's where I call home.....northcentral Pennsylvania!

akbeemer · Jan 30, 2016

This from a friend who was a service manager and finance manager at a HD dealership for many yearss. Another slick sales technique HD uses is to offer very quick, easy to get and generous financing. For example, a guy applies for a $17,000 no down payment loan to buy his FSCLHRSCJWQ model Harley. In a very short time the loan comes back approved for $21,000. The finance manger then sits down with the customer with a book of shiny chrome bits and pieces, leather tassels and an archaic springer front end that can be added to the bike. Boom, the proud new owner is out the door with a free pint bottle of chrome polish and already significantly upside down on his bike's loan.

36654 · Jan 30, 2016

akbeemer said:
This from a friend who was a service manager and finance manager at a HD dealership for many yearss. Another slick sales technique HD uses is to offer very quick, easy to get and generous financing. For example, a guy applies for a $17,000 no down payment loan to buy his FSCLHRSCJWQ model Harley. In a very short time the loan comes back approved for $21,000. The finance manger then sits down with the customer with a book of shiny chrome bits and pieces, leather tassels and an archaic springer front end that can be added to the bike. Boom, the proud new owner is out the door with a free pint bottle of chrome polish and already significantly upside down on his bike's loan.

Financing debt is the easiest to make money. No R&D, no infrastructure.........just a basic understanding of contract law, is all you need.

Omega Man · Jan 30, 2016

akbeemer said:
This from a friend who was a service manager and finance manager at a HD dealership for many yearss. Another slick sales technique HD uses is to offer very quick, easy to get and generous financing. For example, a guy applies for a $17,000 no down payment loan to buy his FSCLHRSCJWQ model Harley. In a very short time the loan comes back approved for $21,000. The finance manger then sits down with the customer with a book of shiny chrome bits and pieces, leather tassels and an archaic springer front end that can be added to the bike. Boom, the proud new owner is out the door with a free pint bottle of chrome polish and already significantly upside down on his bike's loan.

Since I have been purchasing cars :gerg

that has been common. While slightly different, a person would go to a car lot for a thousand dollar car- with no real down payment. The broker would apply for a loan for a $1250.00 car claiming a $250.00 down payment. End result- purchaser gets a vehicle that, if they had the cash, probably could have bought for $850.00.
One reality is everyone is sorta "upside down" as soon as you drive a vehicle off the lot.
Does any of this really matter? IMO, no, as long as you realize what is really going om.
OM

greenwald · Jan 30, 2016

akbeemer said:
This from a friend who was a service manager and finance manager at a HD dealership for many yearss. Another slick sales technique HD uses is to offer very quick, easy to get and generous financing. For example, a guy applies for a $17,000 no down payment loan to buy his FSCLHRSCJWQ model Harley. In a very short time the loan comes back approved for $21,000. The finance manger then sits down with the customer with a book of shiny chrome bits and pieces, leather tassels and an archaic springer front end that can be added to the bike. Boom, the proud new owner is out the door with a free pint bottle of chrome polish and already significantly upside down on his bike's loan.

You omitted four letters in the Model. :dance

motodan · Jan 30, 2016

Omega Man said:
Since I have been purchasing cars that has been common. While slightly different, a person would go to a car lot for a thousand dollar car- with no real down payment. The broker would apply for a loan for a $1250.00 car claiming a $250.00 down payment. End result- purchaser gets a vehicle that, if they had the cash, probably could have bought for $850.00.
One reality is everyone is sorta "upside down" as soon as you drive a vehicle off the lot.
Does any of this really matter? IMO, no, as long as you realize what is really going om.
OM

Agree...the financing aspect of obtaining our desires are such a part of this society's culture it almost isn't a distinguishable part of living any more. There's a Dave Ramsey national radio program that aims to fight this. I agree with some of his philosophies, but others aren't based in reality. The one I find most difficult to understand is the person upside down in their car. His advise would be sell it, even if one had to obtain an unsecured loan to pay off anything over it's selling price...and then go buy a $1,000 car. I haven't bought a $1,000 car since 1965, but I question the logic in that step. Especially when there's a 40 mile daily commute to contend with. But, there is way too much consumer debt, that's for sure. We are certainly a leveraged society....the world pretty much is.

Omega Man · Jan 30, 2016

Motodan said:
{snip} There's a Dave Ramsey national radio program that aims to fight this. I agree with some of his philosophies, but others aren't based in reality. The one I find most difficult to understand is the person upside down in their car. His advise would be sell it, even if one had to obtain an unsecured loan to pay off anything over it's selling price...and then go buy a $1,000 car. {snip}

Hmmm, back 20 or 25 years ago maybe. I know people that have over-extended on the first purchase- which I think it possible to recover from. But they trade (poorly) and dig in deeper and then do it again. If someone was to go make a purchase ( a lot of the time just cuz they feel like it), and carry over say 10K from the last two transactions- it's really an unrecoverable financial problem (for most).
If you end up "bringing money to the closing", it's a good idea to know why.
OM

36654 · Jan 30, 2016

Omega Man said:
Hmmm, back 20 or 25 years ago maybe. I know people that have over-extended on the first purchase- which I think it possible to recover from. But they trade (poorly) and dig in deeper and then do it again. If someone was to go make a purchase ( a lot of the time just cuz they feel like it), and carry over say 10K from the last two transactions- it's really an unrecoverable financial problem (for most).
If you end up "bringing money to the closing", it's a good idea to know why.
OM

Just think, in today's world.......a 25-yo needs "X" dollars of education debt to get the first job, then worry about be underwater on some house or vehicle loan.

You're looking at the tip of the iceberg.

Omega Man · Jan 30, 2016

36654 said:
Just think, in today's world.......a 25-yo needs "X" dollars of education debt to get the first job, then worry about be underwater on some house or vehicle loan.

You're looking at the tip of the iceberg.

Or- an 18yo could decide that working with their hands is a very necessary part of society, become a plumber, electrician or other tradesman and do quite well for themselves.
OM

pglaves · Jan 30, 2016

Omega Man said:
Or- an 18yo could decide that working with their hands is a very necessary part of society, become a plumber, electrician or other tradesman and do quite well for themselves.
OM

Somewhat true - except for the Justice Department and Federal Trade Commission cases against the several private trade schools for high student debt, lying to, and failing to train their students.

Omega Man · Jan 30, 2016

PGlaves said:
Somewhat true - except for the Justice Department and Federal Trade Commission cases against the several private trade schools for high student debt, lying to, and failing to train their students.

Waiting for the school system or the gub-ment to train kids? :rofl

.

OM

Rinty · Jan 30, 2016

ExGMan said:
Seems that Harley has some sluggish sales and dealers are actually offering discounts on new bikes. Wall Street Journal article here: http://on.wsj.com/1KeIbrk

I saw this and saved the article.

I fear that if Harley's management isn't able to develop models for younger riders, the company is eventually going to fail. I can't understand why they don't do this; most of the other manufacturers offer models that appeal to a variety of buyers. If BMW can market 450's, Harley should be able to. Meanwhile, in the automotive sector, you have Daimler Benz selling mini cars, Porsche selling SUV's, and they're doing just fine. Consumers understand that it's a changing world.

I wouldn't like to see the company go down, but if it does, the brand has enough value that there will be lots of interest in the assets.

motodan · Jan 30, 2016

Rinty said:
I saw this and saved the article.

I fear that if Harley's management isn't able to develop models for younger riders, the company is eventually going to fail. I can't understand why they don't do this; most of the other manufacturers offer models that appeal to a variety of buyers. If BMW can market 450's, Harley should be able to. Meanwhile, in the automotive sector, you have Daimler Benz selling mini cars, Porsche selling SUV's, and they're doing just fine. Consumers understand that it's a changing world.

I wouldn't like to see the company go down, but if it does, the brand has enough value that there will be lots of interest in the assets.

John Deere or Massey Ferguson would no doubt have an interest.

akbeemer · Jan 30, 2016

PGlaves said:
Somewhat true - except for the Justice Department and Federal Trade Commission cases against the several private trade schools for high student debt, lying to, and failing to train their students.

For the 12 years I worked at the U of AK I dealt with a steady stream of students that were in the wrong place trying to achieve the wrong goal. Kids often end up going to college because of the expectations of parents, peer pressure and just because it seems like the thing to do. I regularly dealt with students that were eight weeks behind when only four weeks into their first semester, had stopped attending classes and were living their own version of Animal House. Even sadder is that most of the students were funding their academic failure through student loans and the system allowed them to do so for at least two semesters even if they never passed a single course. So after an academic year they were deeply in debt, felt like complete failures and had no options for the future. It is not that these students were generally less intelligent than their more academically successful peers. The reasons for their failure are many and varied, but there is no doubt that many of them would have flourished in a good trade school or apprenticeship.

Harley-Davidson Sees Profit Decline; Dealers offering discounts

2011 R1200RT

Fortis Fortuna Adiuvat

2011 R1200RT

New member

New member

Active member

New member

SURVIVOR

New member

Fortis Fortuna Adiuvat

New member

Active member

Fortis Fortuna Adiuvat

New member

Fortis Fortuna Adiuvat

#13338

Fortis Fortuna Adiuvat

New member

Active member

SURVIVOR

Similar threads