Harley-Davidson Sees Profit Decline; Dealers offering discounts

36654 said:

As HD goes..........I'm guessing BMW will follow.

I'm no fan of their products, but HD and BMW Motorrad are targeting a similar demographic.

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Not exactly: S1000RR, S1000R, S1000RX, F800GS, F310xx, etc.

PGlaves said:

Not exactly: S1000RR, S1000R, S1000RX, F800GS, F310xx, etc.

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Mr. Glaves,

Not to pick on you, but some would say you still have a year, or two, to reach the median age for US BMW motorcycle owners.

I'll stand by my speculation......If this trend holds for HD, BMW Motorrad sales will be struggling in the summer.

36654 said:

Mr. Glaves,

Not to pick on you, but some would say you still have a year, or two, to reach the median age for US BMW motorcycle owners.

I'll stand by my speculation......If this trend holds for HD, BMW Motorrad sales will be struggling in the summer.

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I respect your opinion as you respect Paul's, but I agree with Paul. This thread clearly demonstrates what happens when an industry pigeon holes itself into a narrow customer base. I honestly think BMW mottorad as a company is forward thinking and has a strategic market plan that we are just now seeing the ramifications of. I think BMW is on the move. I actually considered doing something I've never done before today, while on the bike, riding home from work, I considered buying stock in BMW.

rangerreece said:

I respect your opinion as you respect Paul's, but I agree with Paul. This thread clearly demonstrates what happens when an industry pigeon holes itself into a narrow customer base. I honestly think BMW mottorad as a company is forward thinking and has a strategic market plan that we are just now seeing the ramifications of. I think BMW is on the move. I actually considered doing something I've never done before today, while on the bike, riding home from work, I considered buying stock in BMW.

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Considering the volume of bikes they sell in the US (10x BMW Motorrad sales), HD most likely has the best handle on the market. Interestingly, domestic 2015 HD sales/shipments were at 170,700 units, down from 174,000 in 2014, but up from 167,000 in 2013. That's pretty steady, but well down from 273,200 units in 2006.

In 2015, BMW Motorrad sold 16330 units in the US, which is a 9.3% increase vs 2014 and is currently offering the following incentives;

NEW MOTORCYCLE INCENTIVES:
2015 Model Year Savings:

MODEL / SAVINGS
F 800 GT / $1,150
F 800 R / $1,250
K 1600 GT / $1,600
K 1600 GTL / $1,600
K 1600 GTL Exclusive / $1,750
S 1000 R / $500
S 1000 RR / $1,500

Offers expire 1/31/16

2016 S1000 XR: Receive a BMW Navigator V GPS

2016 R1200 RT, R1200 GS & Adventure: $500 accessory credit

So, BMW is also sweetening the deal.

36654 said:

Considering the volume of bikes they sell in the US (10x BMW Motorrad sales), HD most likely has the best handle on the market. Interestingly, domestic 2015 HD sales/shipments were at 170,700 units, down from 174,000 in 2014, but up from 167,000 in 2013. That's pretty steady, but well down from 273,200 units in 2006.

In 2015, BMW Motorrad sold 16330 units in the US, which is a 9.3% increase vs 2014 and is currently offering the following incentives;

NEW MOTORCYCLE INCENTIVES:
2015 Model Year Savings:

MODEL / SAVINGS
F 800 GT / $1,150
F 800 R / $1,250
K 1600 GT / $1,600
K 1600 GTL / $1,600
K 1600 GTL Exclusive / $1,750
S 1000 R / $500
S 1000 RR / $1,500

Offers expire 1/31/16

2016 S1000 XR: Receive a BMW Navigator V GPS

2016 R1200 RT, R1200 GS & Adventure: $500 accessory credit

So, BMW is also sweetening the deal.

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Interesting to note that even with the apparent imminent "demise" of Harley-Davidson according to some comments on this thread, that they're sales still were more than the 10 times greater in 2015 than BMW. Trends notwithstanding, those sales numbers are still pretty impressive.

As you have pointed out, even with BMW's percentage of sales increase, there are factory discounts on several 2015 models, which has to mean there is substantial remaining inventory.

ducster said:

Interesting to note that even with the apparent imminent "demise" of Harley-Davidson according to some comments on this thread, that they're sales still were more than the 10 times greater in 2015 than BMW. Trends notwithstanding, those sales numbers are still pretty impressive.

As you have pointed out, even with BMW's percentage of sales increase, there are factory discounts on several 2015 models, which has to mean there is substantial remaining inventory.

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A few years ago HD outsold BMW 20 to 1. Now I hear 10 to 1. I don't know. That is sales. What might matter more is profit. I don't have those numbers.

To me it matters little because while there are three or four brands I would consider if looking for a different/new bike - we currently own BMW, Kawasaki, Yamaha, and Suzuki - HD isn't one of them.

This Harley thread appears to be getting more activity than most BMW threads.

20715 said:

This Harley thread appears to be getting more activity than most BMW threads.

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Of course. It's winter. Next up: loud pipes, fingerless gloves, assless chaps, chopper forks, rigid frames, sissy bars, dew rags, and black wife-beater shirts.

One winter there was a thread about shaving.... Riveting.

PGlaves said:

assless chaps

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There we have it folks. That's a winter topic!

Unlike HD, BMW also makes cars, aviation components, and their K1600 engine is in some type of amphibian quad runner that turns into a jet ski. With 23 new models targeting distinct demographics on the bike side, I think they are in good shape globally speaking. If apple was still cranking out versions of it original Macintosh they would have been extinct a long time ago and no one would know who Steve Jobs is. I think HD has a market saturation issue in the US. Foreign sales will probably remain strong becaus everyone wants a piece of American freedom.

Me and my Dad last Memorial day.

rangerreece said:

Unlike HD, BMW also makes cars, aviation components, and their K1600 engine is in some type of amphibian quad runner that turns into a jet ski. With 23 new models targeting distinct demographics on the bike side, I think they are in good shape globally speaking. If apple was still cranking out versions of it original Macintosh they would have been extinct a long time ago and no one would know who Steve Jobs is. I think HD has a market saturation issue in the US. Foreign sales will probably remain strong becaus everyone wants a piece of American freedom.

Me and my Dad last Memorial day.

View attachment 54305

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Aviation components? I think that went to Rolls Royce and lost within the Alison/Williams/etc. trademarks

rangerreece said:

Unlike HD, BMW also makes cars, aviation components, and their K1600 engine is in some type of amphibian quad runner that turns into a jet ski. With 23 new models targeting distinct demographics on the bike side, I think they are in good shape globally speaking. If apple was still cranking out versions of it original Macintosh they would have been extinct a long time ago and no one would know who Steve Jobs is. I think HD has a market saturation issue in the US. Foreign sales will probably remain strong becaus everyone wants a piece of American freedom.

Me and my Dad last Memorial day.

View attachment 54305

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Neat pic of you and your Dad!

I spent 7 years on H-D RoadKings as a Motor Officer (according to HOG Magazine, pounding on more miles in that time frame than the average H-D owner does in a lifetime). The bikes needed a lot of attention due to vibration and poor engineering, but never left me stranded on patrol. They were adequate for street duty, and I enjoyed those years immensely.

That being said, I always 'cringe' a bit with comments like "American Freedom" or "American Iron."

Not that long ago, that the US Gov. forced Harley-Davidson to change the labeling on their bikes from "MADE IN AMERICA" to "ASSEMBLED IN AMERICA," due to less than 51% genuine American-made components.

H-D is teetering on the precipice of not being American-made at all. I'm sure there are bean-counters in Milwaukee assigned to monitoring that balance very closely, to preserve the aura of their brand image.

H-D:

Wheels come from Australia
Suspension (forks, shocks) are Showa from Japan
Electrical harnesses come from Mexico
Brakes (Brembo) from Italy (as also BMW!)
"Bar & Shield" logos mounted on bikes - China
Etc. Etc. Etc. - about 300+ components imported

Motorcycles (major manufacturers) with most American-made components - Victory & Indian (@ 98% - electrical harnesses are imported)

Close Second - Honda Gold Wing (used to be assembled {engines shipped to the USA from Japan} in Marysville, OH till 2009. Honda then returned assembly to Japan due to US labor costs - now ships crated Wings {still with 80% American components} back to the USA and actually saves $$$)

H-D comes in at a precarious 4th.

I hope as a brand they survive, as competition improves all breeds.

ducster said:

As you have pointed out, even with BMW's percentage of sales increase, there are factory discounts on several 2015 models, which has to mean there is substantial remaining inventory.

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You have to remember the strong US $. BMW can and should discount their prices due to this. I got a discount on my 2015 R1200GS.

Harry

greenwald said:

Close Second - Honda Gold Wing (used to be assembled {engines shipped to the USA from Japan} in Marysville, OH till 2009. Honda then returned assembly to Japan due to US labor costs - now ships crated Wings {still with 90% American components} back to the USA and actually saves $$$)

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In 2011, manufacturing burdened or total labor costs in the US and Japan were similar at ~$35/hr. However, the exchange rate has went from 80 to 125 yen / dollar, since then. Including that change, the Japanese labor rate could have dropped to $22.4/hr. That's a big improvement in profit.

AKsuited said:

You have to remember the strong US $. BMW can and should discount their prices due to this. I got a discount on my 2015 R1200GS.

Harry

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It's a two edge sword. Great for us Motorrad customers, but the exchange rate will reduce BMW profit at the SC facility unless labor costs are reduced or sourced from elsewhere.

36654 said:

It's a two edge sword. Great for us Motorrad customers, but the exchange rate will reduce BMW profit at the SC facility unless labor costs are reduced or sourced from elsewhere.

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Are you suggesting we renegotiate our contract on the leased employees in SC?

Exchange rate is a nebulous, curious thing for me. I'm curious if the dollar was exactly equal to the Euro now would that affect sales and production?

rangerreece said:

Exchange rate is a nebulous, curious thing for me. I'm curious if the dollar was exactly equal to the Euro now would that affect sales and production?

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Exchange rates do not get the visibility in the US as much as they do in Europe and Asia. When I've lived overseas exchange rates were a regular part of every news broadcast. As the Euro and dollar near parity one would expect the price of European produced goods to drop. It seems, however, that reductions in price lag behind currency changes but increases are much more immediate.

akbeemer said:

Are you suggesting we renegotiate our contract on the leased employees in SC?

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I think SC is still in the US, so no.