Harley-Davidson 2011 Motorcycles Inventories Too Low.

Consequence of cutting back its production to meet a lower consumer demand caused by the recession, some Harley dealers begin to complain that they don’t have enough 2011 models on the show floor.

The results of a study conducted by the firm of Robert W. Baird and Company with 64 Harley dealerships show that 2/3 of them think that their inventories are too low and that it hurts sales. The positive side of the story is that prices of the new motorcycles are firming, protecting Harley brand value, helping the dealer and the finance division make more profit.

Surprisingly, 42% of the dealers surveyed stated that they were selling bikes at or above the suggested retail price. On the other end of the spectrum, some dealers still have a lot of 2010 models on the show floor. In this actual uncertain economic context, Harley-Davidson will probably continue to prefer tight production over the risk of over-production. Harley dealers are learning how to trade inventory with each other, a daily practice in the car industry. (picture courtesy HD Orlando)

14 Responses to “Harley-Davidson 2011 Motorcycles Inventories Too Low.”

  1. 1 Aug 27th, 2010 at 8:06 pm

    How does a survey of 64 dealers (when you reported over 1250 left the other day) buy a co. (Baird) paid by whom? Sets a precedent for the whole Harley dealer network? If I was hired to do a survey with modern computers and info gathering tools, I think a sample of 1000 or more would be more accurate than 64? Just saying. Read between the lines and believe what you see not read!

  2. 2 Chris. Aug 27th, 2010 at 8:48 pm

    If you ever worked in marketing you would know that a larger number sample doesn’t increase reliability of your survey (it just increases the cost of the survey). Surveys like polls are made with a “representative sample.” It means that the 64 chosen dealers represent the behavior of all network. How do you select a a representative sample. In a few words, after studying during a long time a composition/mix mimicking the thoughts/behavior of all the surveyed. Think about political polls. They are very reliable although made on a very low percentage of voters.

  3. 3 BIG DOUG Aug 28th, 2010 at 4:40 am

    Will we could do with about another 10-15 streetglides at our dealership but we will be lucky to see 3-4 this year.

  4. 4 Paul Aug 28th, 2010 at 6:25 am

    ‘ The positive side of the story is that prices of the new motorcycles are firming, protecting Harley brand value, helping the dealer and the finance division make more profit. ‘

    More Profit. In other words over charging the consumer so they can pay all the over head not needed.

    ” dealers surveyed stated that they were selling bikes at or above the suggested retail price ”

    Again ! Consumer paying more than what the product is worth.

    And we are supose to care about this company ?

  5. 5 morriscustom Aug 28th, 2010 at 8:35 am

    I believe a shortage is always good,It keeps prices high.The old saying people want what they cant have!Thats how Ferrari builds cars,you build so many and thats it,you let market and demand set prices!

  6. 6 Aug 28th, 2010 at 10:53 am

    Morriscustom’s statement that “people want what they can’t have” is indeed true.

    But when comparing H-D to Ferrari in the same sentence, conversation drops to a sudden silence.
    let’s just do a quick check on H-D vs. Ferrari.

    H-D is in trouble and may or may not pull it together. After years of price gouging, making life miserable at times for the smaller shops (forgetting who kept their image alive), and not producing a true quality product, It’s time to pay the piper. Thats why they are building fewer bikes.

    Enzo Ferrari on the other hand started his mission with the main goal of making his cars some of the best the world has ever seen. Extreme attention to engineering and design, combined with superb quality control is what I believe determines the amount cars built for the year. They are not planning on building a factory outside of Italy as far as I know.

    Not to forget that Ferrari supports some the best R&D on the Planet with there strong dedication to racing. They have an amazing race history with F1 and GT cars that continues today. There museum is alive and still growing.

    I would venture a guess that both upper management and the workers union helped put “The Motor Company” into their current market position.

    At Ferrari they work more like a team, not like opposing teams.

  7. 7 Aug 28th, 2010 at 2:34 pm

    A couple of things to digest on the above. First if you are not getting enought 2011 Motorcycle means that you did not sell all of your 2010 models. and another thing to consider is this is still 2010 and most dealers have only had 2011 for about 6-weeks lets wait down the road to get the true picture.

    After years of price Gouging by the Motor company. Lets use some good examples. 50 years ago we needed fuel and it was cheep today is the same except it costs a lot more, same thing with cigars, a pack of cigs, a loaf of bread and the list goes on.

    Gouging is when you have a item that ever one needs example a bottle of water when you are thirsty and they charge a lot more for the item.

    We certenly do not need a Harley-Davidson Motorcycle we want one, and Harley never said that they built a motorcycle for the least amount of Money. Just the best value.

    Price is some times a primary consideration when you are buying items that you have to have. Price could be Secondary when buying things you do not need.

    Remember Market Price you always have the option to not buy if you think it costs to much, and you are still in control with the items you want. Buy what you want. Thanks Gary Bang

  8. 8 Aug 28th, 2010 at 4:14 pm

    I encourage everyone to shop around; just as you do when buying any other product. There are many dealers who are selling bikes below MSRP. I called 4 dealers in my area and they all wanted MSRP; with 3 also wanting a set-up charge. The fifth dealer I called offered me an unbelieveable deal on the phone on a black Street Gide with ABS, CC and alarm. Big bikes have a 17% profit margin. As such, it’s no wonder the dealers want more Touring bikes. Point the “finga” where it should be pointed – at the Motor Company. Just as was the case in the Auto Industry, top management is just culling the number of dealerships to optimize future profits. Fewer dealers means less competion and higher prices or as noted by Baird – “prices of the new motorcycles are firming, protecting Harley brand value, helping the dealer and the finance division make more profit”
    What a great country!!!!!!!!!!!!!!!!!!!!!!!

  9. 9 Blow Me Aug 29th, 2010 at 1:12 am

    Let’s see if I understand the economics at work here:
    1. Pay over list for a new HD only due to short shipping volumn.
    2. Notice in the first two blocks that it runs too hot, too lean, stumbles when cold.
    3. Pay roughly $2.5K on top of the inflated list price to get it to run cooler and properly.
    4. Feel good about your purchase…………………?

    Glad I kept my 2005 and using aftermarket parts. The only thing that rings true with Retailers, is voting with your hard earned greenbacks.

  10. 10 Aug 30th, 2010 at 9:07 am

    To Mark Shubin: Wow! I could’nt have said it better myself. Brilliant. The Union and Upper management paradigm is aged and archaic. The gloves need to come off, the rhetoric needs to cease and everyone needs to learn how to put their head down and work.

    If dealer inventories are low then I say it is about time. The dealers that have had a license to print money for the last 10 years can get on to selling the next “big thing” and leave the motorcycle industry to the lifers and riders that made it what it really is. The dealers that built Taj Mahals to sell Harleys in can go out of business, the ones that really helped Harley make it through hard times can thrive again. Too many second generation dealership brats flooded the market with over priced t-shirt shops that sold motorcycles too.

    Harley needs to take a cue from GM & Chrysler and close the weak dealers in their network and become a niche again. The notion that there should be a Harley in every driveway is killing the brand and the livelyhood of those that helped make Harley an iconic institution.

  11. 11 Aug 30th, 2010 at 9:18 am

    Hey Mark Shubin
    wheres my pics? 🙂


  12. 12 mp Aug 30th, 2010 at 3:17 pm

    Intentional scarcity in order to re-create demand for a product that’s been flooded on the market for several industry-inflated years.

  13. 13 Aug 30th, 2010 at 3:20 pm

    I totally get that building less bikes will create a larger demand and as such will sell bikes for larger profits. But is that really good for the dealer and the moco? Is it not also true that if you sell 40% less bikes then you will sell 40% less shirts and jackets and boots and service as well. In the long run the dealer will be forced to raise all the prices of all items to make up the differences and sooner or later that price will hit a point that fewer will buy at, so what then? raise prices again and lose more customer base? The HD dealers in my area are already raising prices on service and losing customers because of it. The small shops thou are loving this new charge more statagy because they are still charging the same hourly rates and doing more work as a result. Would it not be better to build a bike more people want at a lower price that more people can afford so that you sell more bikes, more shirts, more service? I may not be the smartest guy in the world but I do understand that walmart is the biggest retailer in the world for one reason “low pricing”. I understand also that bikes are differant than soap and food but Walmart also sells a lots of items like TV’s stereo’s camcorder and such that are “want” type items as well as “need” type items like the soap and food and all are priced low and that is why furniture stores are closing at an alarming rate right alone side of grocery stores. I hate to be the bairer of bad news but HD will continue to lose market share unless they adopt a new sales statagy. Higher prices will only put more dealers out of business and cause more people to buy the Honda or Yamaha counterpart, higher prices will not help those HD dealers still around do better in the long run. Remember a dealer only sells a bike once but they can service that bike many many times in the future and all that service and parts sold could be the differance between closing the doors and turning profits. Like I have said many times before I am not the smartest guy and this is just my opinion but I think HD is on the wrong path.

  14. 14 Taco Sep 3rd, 2010 at 8:34 am

    By design. Let the dealers starve out and only the strong survive!

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