Harley-Davidson Close To Entering New Healthy Business Cycle

A new Baird Survey shows that a Harley dealer had an average 41 new motorcycles in stock on their show floor in October. It compares  to 67 motorcycles a year ago at the same period. Of course it’s the consequence of Harley-Davidson decision, like other motorcycle manufacturers, to cut production to avoid to flood the market during a recession and to protect the value of the brand.

Positive effect is that dealers face less financial risks managing their inventory, incurring lower interest payments and depreciation costs. Negative consequence is that some dealers are losing new motorcycle sales although some sales are transferred on pre-owned motorcycles with for consequence that used motorcycle prices are firming. Balancing production with demand is a difficult exercise, but it seems that Harley is succeeding at getting close to balance production and demand. With just enough workforce to produce its motorcycles, the flexibility of temporary workers to adjust to seasonal fluctuations, with the abandon of aggressive discounting to move both new and used bikes and consequently protecting its brand value and image, I think that Harley-Davidson is very close to start a new healthy business cycle. And of course all the after-market motorcycle industry will benefit from it. Harley-Davidson.

7 Responses to “Harley-Davidson Close To Entering New Healthy Business Cycle”

  1. 1 J Nov 28th, 2010 at 1:15 pm

    What’s the bogey number tho? Is 41 still too much, or is it just better? Still sounds like a pile of bikes per dealership- what was the number during the heyday of profitability, circa 2002 or so?

  2. 2 Cyril Huze Nov 28th, 2010 at 1:19 pm

    To J. The average number of new bikes on a Harley dealer floor was 72 in 2005.

  3. 3 Rick Lossner Nov 29th, 2010 at 8:15 am

    One less at my fav’ dealer … picked mine up Saturday 🙂

  4. 4 mike corbin Nov 29th, 2010 at 4:55 pm

    Nice going HD, we all need you to be healthy and you are doing a good job finding your way into the future..Most of the small accessory companies have had to adapt as well.. Love my 2010 FLHX..My dealer very much believes in the changes HD is making..

  5. 5 martin Twofeather Nov 29th, 2010 at 6:16 pm

    Bought a new FLHTCU Cyril so there is one less on that show room floor….

  6. 6 chicagojohn Nov 29th, 2010 at 6:23 pm

    Hey Mike Corbin, would be real nice to see the Merlin make a comeback, huh?

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