Friday, July 27, 2018

Good news and bad news for Harley-Davidson

It looks like the EU is working on dropping most tariffs - and since these added something like four grand to the cost of a hog sold there, this is good news for HOG.  More good news for Harley is that this may even mean that Trump's tariffs on imported EU steel will go down or away, letting them lower prices or solidifying the bottom line.

The bad news is that the Harley buying demographic is getting even older.  Kids these days aren't saddling up like they did in the past.  Dr. Jim has a bunch of reasons why.  This is my favorite:
You have to shift manually and use something called a clutch.
It's funny because it's true.


Gorges Smythe said...

Even one of the dump trucks I drove was an automatic. It spoiled me! - lol

Rick C said...

*gasp* You don't think those steel tariffs could've been the opening shot in the war on auto tariffs that the EU just surrendered on, do you?

Borepatch said...

Of course they were, Rick C. The market is pricing that into the valuations, as they priced the tariffs (when announced) into the valuations. It's reacting to Trump's strategy and it's outcome, but as a lagging indicator.

Beans said...

Nothing would have stopped HD from going into more modern motorcycles, except their own thick skulls. Failure to address and properly attack the Honda/BMW crowd is part of what has doomed them.

My wife, back in her more, ah, er, carefree days would have loved a nice 300-400cc American bike that didn't require a portable machine shop and an arm-and-a-leg in pricing. Instead she got a nice Honda that was what she needed. What could have been a new HD rider became a Honda rider.

HD put themselves into the niche market. And now that market is going away. Silly people, they de-evolved when everyone else evolved.

Old NFO said...

Yep, HD is in a niche that is literally dying... sigh

Paul, Dammit! said...

Since tugboaters tend to own motorcycles and trucks with massive lift kits, HD is still popular among us... but Indian is now moreso, for many good reasons.

Will said...

You'll aren't very observant.
HD tried innovating over the years. They got stomped on by their public for daring to attempt to broaden their appeal, and for upgrading their engineering. By the time they had the freedom from idiot business owners, and the funds to manage it, the market clearly informed them that their core buyers would abandon them if they tried to compete with the Japanese and the Europeans.

It was made very clear to Harley that nostalgia/vintage was the only market they were allowed to play in. Unfortunately, that's a limited market. It's now in the process of contracting due to demographics.

I'd be surprised if any of you knew that Harley RULED racetracks worldwide in the years between The World Wars. 4 valves/cylinder, dual overhead cams, they were the best. They had little competition. They downgraded their designs during the depression to keep their doors open, and after the war, no one was interested in high tech bikes in the US.

BTW, I'm not a Harley lover. Never cared for the farm implement style engineering.

Will said...

BTW, NO ONE would buy 300-400cc bikes here in the US. There is NO market for it. Every time it's been tried, no matter what the style, not enough are bought to support production at an affordable price. Especially after the EPA/Greenies outlawed 2 strokes.

This is a BIG country, with lots of space, and little street bikes don't sell. We don't have the graduated/stratified licensing schemes like many other countries do, so there is no artificial driver for small bike ownership.

LSP said...


jon spencer said...

Both Honda (Honda Gold Wing Tour DCT) and Yamaha (FJR1300AE/AS) are motorcycles that do not require using a hand clutch.
Both seem to be selling.

Dan said...

Might I remind those here who have exceedingly short memories that both Ferrari and Lamborghini started out as manufacturers of agricultural equipment, and that to this day they still sell small tractors?

HD can come back from where they are, though perhaps only with some rebranding. Trying to mix it with the Jap bikes would also be quite a good move; they can't really compete in the small cheap market, but expanding into the high-quality touring sector so beloved of BMW could work.