News, news , news...

[PapaUtah]

Courtesy of CBS Marketwatch...

"Harley Davidson is ending its long-time practice of providing independent, third-party warehouse space to dealers in high-rent districts and others with limited floor space.

The company acknowledged...that the practice was halted after a review of its "dealer policies and programs."

...some dealers conceded they're using the space because they bought more bikes than they can possibly sell. He also was first to flag the shutdown of the program in a report Monday, citing a memo last week to dealers. (Ironically, it was the same day the company named a new CFO, following a prolonged search.)

At the time, said ownership of the bikes had transferred to dealers. Still, it raised eyebrows...because it suggests that Harley might have found a convenient way to stuff its dealers with bikes."

So thats were all of those bikes are ending up...

 

[Randy]

Help a knucklehead like me understand. So, a dealership would buy 50 bikes, but, only have room for 20, so, Harley would store the other 30? If so, maybe this is the creative way of pushing the conversion of the old-fashioned Harley dealerships into the new boutique style shops that have 80% of the floor space taken up with clothing and accessories and small corner of the shop left over for the 10 bikes that they have.

 

[Rentaroo]

Hmm...maybe HD headquarters is tired of paying the bill for the dealer's inability to accurately requistion the proper amount of bikes......

On a related note...there is a relatively new HD "Boutique Style" dealer in Santa Maria, they have a suprising number of new bikes on the floor, and less suprising, a large number of bikes lined up outside the service/parts entrance......

 

[Mike-H]

Question Rentaroo, wouldn't that be causing an artifical supply & demand situtation?

 

[twowheelnut]

Santa Barbara Harley recently tried to expand their existing space, but the blue hairs, tree huggers and whale fondlers shot 'em down. So, they opened up a second store downtown. Mostly 'Motor Clothes' and accessories plus a few bikes. They dropped Buell when they made this change, too.

As a way to spur sales, they advertise free tires for life for all new Harley sales - they've been doing this for a while, now. I stop by every now and again cuz the wifey gave me a gift card for Christmas back when I had the Road King and I've never used it. Keep hoping to find something I want/need - maybe I should by 100 bottles of S100... Anyway, I noticed in the last several months that their bike inventory isn't being rotated - same bikes still there month after month. Yesterday, I hear their new radio ad: "Free tires for life AND all scheduled maintenance for 2 years on all new bike purchases!"

Not sure if this is a sign of the times for H-D or the economy in general... :dntknw:

 

[FJRocket]

...maybe this is the creative way of pushing the conversion of the old-fashioned Harley dealerships into the new boutique style shops that have 80% of the floor space taken up with clothing and accessories and small corner of the shop left over for the 10 bikes that they have.

Randy, I'm with you. I think HD wants all their dealerships to be mega stores. I know my local shop just moved and expanded... and they have lots of clothes. They also have about 50 or more bikes on the floor.

The other shop I frequent only has about 20 bikes on the floor, another 10 bikes for sale at the "shop", and then about 100 bikes in storage behind the shop.

Maybe HD just sees the writing on the wall and knows everyone is getting top heavy, and is placing the burden on the dealers? I dunno for sure.

 

[vagabond]

Free tire replacement. Does that include dry rot? Otherwise, how many years does it take to wear out tires, riding to the bar?

 

[FlyingLow]

Free tires for life? I wonder if there's any chance we could... nah, forget it.

Very interesting, though. What goes up must come down, I suppose, but give the Motor Co. credit; they had a helluva run. Probably still selling everything for full MSRP, though.

2 years of scheduled maintenance is mostly oil changes, maybe an air filter and spark plugs. And while the good folks wait for their oil change to be done, plenty of nice gear to be bought. That's actually some genius marketing; get the maintenance DIYers done to the boutique and sell them stuff while they wait :lol: .

 

[Rentaroo]

Mike-H,

Yes, that situation could create a messed-up supply/demand. I remember reading something alluding to that in another thread or maybe in a business magazine. I admire HDs marketing philosophy.....they've done very well for themselves. I even like looking at some of HD's machines......I'm just not going to buy one.....not for all the free tires in the world......

 

[PapaUtah]

“In the last two weeks, Harley began a step-up loan promotion, similar to balloon mortgage, to lower cost of entry for buying a Sportster. Low payments for the first 36 mos then step-up significantly, by upwards of 40% and in some cases more than doubling for the remaining 36 months of loan. Because of the lack of equity built up in the bike through this promotion, HDFS will not allow dealers to sell HDFS gap insurance to customers using this promotion.”

72 months to finance a Sportster??????? If you need 72 months you can't even afford the dinette!!!! I thought H-D customer base was so affluent they walked in and bought with cash! HDFS refusing to sell gap insurance on a HARLEY???? I thought they never went down in value! Only up! Own it a few years and then sell it for what you paid!!!

It appears it is going to be a tough year ahead for motorcycle dealers in the USA...maybe this PDP thing is good for Yamaha...supply and demand almost perfect balance...

 

[GunMD]

Free tire replacement. Does that include dry rot? Otherwise, how many years does it take to wear out tires, riding to the bar?

It depends on how many "I'm cool" burnouts you do while at the bar.

 

[FlyingLow]

You need horsepower to do burnouts.

 

[vectervp1]

You need horsepower to do burnouts.

No you dont. You need torque which v-twins have alot of.

As for free tires for life and maintenance for a year, I have a friend who would be all over that. Him and his wife have put well over 50,000 miles on their Road King in the last year and a half. For them this would be a huge cost savings.

 

[FlyingLow]

I'd like to see a 2,000 rpm, top of the torque curve, burnout by a Road King.

A V-rod could probably generate some smoke.

 

[MrVvrroomm]

Burnouts can be accomplished with a 250 Ninja, non-issue.

 

[Mike-H]

Seems as Mrvvrroomm has been riding his sons bike to have that kind of knowledge

 

[charismaticmegafauna]

vectervp1 Posted on Mar 15 2006, 12:16 AM

As for free tires for life and maintenance for a year, I have a friend who would be all over that. Him and his wife have put well over 50,000 miles on their Road King in the last year and a half. For them this would be a huge cost savings.

As a matter of fact: I once put 122K miles on a Concours and figured-up my tire costs for that -- it came to well over $4000. The Harley offer could amount to a serious perq for some?

 

[Oldwin1]

Especially if you want the tires that say Harley Davidson on them.

 

[Jkern1]

Guys this is a huge accounting issue in my book for HDC. So HDC recognize revenue when the motorcycle is shipped, they also reduce their inventory balance. But in reality all they are doing is shipping to a dealer warehouse that HDC is paying the rent. What HDC probably offers long terms on these bikes to the dealers, like pay in 6 months. So the dealer does not care. This is very bad bad accounting. It shows that HDC is shipping lots of bikes, but in realtiy they are just moving inventory from one HDC owned warehouse to another one.

It really does not matter more then 70% of HDC EPS comes from apperal. In theory they should give away the bikes at cost just to add to all the idoits that by the apperal.