| Author | Message | ||
     Mmmi_grad |
Well how long ago was it 10 years ago there was a waiting list for a Harley. NOT ANYMORE. The showroom is full and people are buying but alot of people are feeling the economy. In any case the MIDDLE CLASS is under attack. Whats the future of Bike prices? Certainly custom painted one with $25 k price tags might go on but in what capacity? I am interested in people opinion about what is going in regards to Harleys bike prices and what dealers maybe offering in the future as incentive to BUY. Look at the big three. Lay off after Layoff. I dont know if HD has been affected or not, im guessing not but sooner or later somethings going to happen. Show rooms are full. Jap bikes and look alikes are selling WILD WOMEN ON A SAT NIGHT. Used bikes are everywhere. No end in site!!! Is this market due for a correction????????????? | ||
| Buellshyter |
They will sell overseas. | ||
| Lost_in_ohio |
I can't wait to see dirt bikes on the show room floor. Good fun for sure. Most of my coworkers are buying The Ultra classics and Gold wings. You forget the market is dinks, Due Income no kids. Most have their houses paid for and kids thru college. I am 15 years younger than most of them and understand what you are saying. Thinks look bleak for sure. Hang in there. | ||
| Slaughter |
Dirt bikes on a Harley sales floor will die. Very few dealers selling buttless chaps, tassels and chrome will have a clue about dirt bikes. I'm excited about the dirtbikes but IF that is to happen, it has to separate from the typical HD store. | ||
| Cochise |
I also think the Harleys are on the floor and not on backorder because they are mass producing them now. It should bring DOWN the price though. | ||
| Toe_cutter |
Here is an interesting article about that kind of thing http://articles.moneycentral.msn.com/Investing/Com panyFocus/HowHarleyStockCouldRoarBack.aspx?wa=wsig nin1.0 | ||
| Danger_dave |
Interesting speculation. Out here on the rim they still are selling well. The after sales bling, HOG, motorclothes etc etc etc - Harley still the leader at all that. The Lifestyle options carry the day and I suspect they will continue to do so. Might see a lot more V-rod engined machines in 5 years maybe. | ||
| Tommy_black_shark |
HOG stock is off its 52 week high by 20% or so, but over 30% above its 52 week low. It is higher now than the last 2 times it split. I think the big drop was a knee jerk response to the revised guidance they gave the street regarding '07 earnings. The rebound has been quick and strong. HD obviously relies on in-house credit as a value and profit adder, but shouldn't need a captive lender to sell bikes, If you look, most foreign brands this time of year are offering variations on the subsidized rate approach to move bikes. HD isn't with the big twins at least. They may sell fewer bikes to marginal credit risks as credit policies tighten across the board but this is true of all sectors. As demand for credit lessens, credit standards will loosen. Having product to sell is normally much better than having a waiting list. It indicates that production is keeping up with demand. While the dealers are unable to charge a premium anymore, those dollars did nothing for HOG. Instead, I'm sure some of those dollars are finding their way into accessories and "motor" clothes. Which helps the dealer and HOG's bottom line. | ||
| Rainman |
As a 50-year-old with a kid just entering college living in a high-cost of living town, I'm riding a Blast. I can't afford an 18g softail deluxe anytime soon so my next bike will either be a Buell or a Triumph. For the cost of the deluxe I could buy both the XB12Ss and the Bonneville that I want. (Message edited by Rainman on April 16, 2007) | ||
| Midknyte |
Here's an ultra cynical thought: could the bikes turn into a loss leader for the clothing & bling? | ||
| Xlcr |
In a word, no. Regardless of what people think, profits from t-shirts, jewelry, etc, are a tiny fraction of what Harley makes on its bikes. They list and categorize their profits in their quarterly statements, which they post for all to read, so I'm continually amazed that people still believe that bullshit. They could never survive on t-shirt income. What is happening is a lot of loan forfits and repos, due to the now industry-wide practice of giving loans to those who cannot afford to pay them back. Don't think this gives some advantage to the Japanese, the same thing is happening to them, they just don't talk about it. In five years I believe we will be in a major recession. We came to the point several years ago where to keep the economy moving they started to give credit to anyone that wasn't in prison and had a driver's license. That suggests desperation. Surely the loaners wouldn't be doing that unless those who are better off were tapped out. The morgage meltdown will tighten credit, and I believe that will lead to a major adjustment. Economies run in cycles, and on every upswing in history, there have been those who said for some reason or the other the cycles had been defeated and the markets would now go ever upward. That's what they said about the New Economy in tech stocks on the NASDAQ in 2000, remember? And then what happened? What goes up must inevitably go down. We are not immune from the currents of history, and the record of the last downswing in the early '80s suggests that HD is a lot better at surviving hard times than the Japanese are. | ||
| Bomber |
unless someone spikes the watercoolers in the Iron Tower with stupid juice, I think the mean HD dealer will look much as it does today -- the middle class may be suffering (no argument from me on that point), but there are neough folks with enough disposable income who will buy at MSRP -- the entire "give the purchaser something to do/someplace to go" deal that HD does is pretty much unique in the industry -- while other manufacturers do have similar programs (Triumph's RAT, for instance), I know of no other brand that's turned their dealerships into destinations (there are dealers that have done so, but on their own, without support-push from the manufacturer) HD will be fine, I"m thinkin -- they've accurately identified their target market, and are addressing that market very nicely (I have heard the standard "HD owners are confined to wheel chairs" routine -- a random stop at an HD dealer on Saturday afternoon reveals this to be at least slightly in error ;-} ) | ||
| Buellinachinashop |
If HD doesn't get their stuff together....  | ||
| Ft_bstrd |
Harley's haven't been for the average Joe in a while. Motorcycles are luxury items. Luxury items are some of the first to get scrubbed out of the budget during economic low times. People who would like a Harley will still buy T-Shirts and window decals. | ||
| Tommy_black_shark |
HOG obviously makes a lot of money off of the soft goods. While not as much as they do from the hard end of the business (bikes & parts) the soft goods are attractive because they don't require much if any capital investment and are strictly a cash (flow) business. Harley is swimming in cash by the way. Over the last several years they have paid down debt, paid out big dividends and continue to maintain huge cash reserves. Retail loans are plentiful and relatively cheap because there is a lot of money in the system. US productivity is up annually by approximately 5% and to maintain competitiveness the Fed keeps the dollar relatively weak. That means there is plenty of money to lend. When supply exceeds demand the lenders are willing to take a greater risk to attract business. Despite the media's gleeful anticipation the current shakeup among sub-primes is unlikely to bring the housing market or the economy to its knees. We have been reading for three years about the burst bubble of the housing market. Sales have slowed quite a bit, but mostly in areas that were red hot before, or in areas that have been slow for a long time. Here in North Georgia a lot of the recent escalation of real estate values was due to a massive influx of Floridian's. With the slow down in Florida home sales prices have dropped here from outrageous to merely ridiculous. Recessions are not unusual and we should probably expect more in the future. However,since the '70's recessions in the US economy have been shorter and shallower than previously experienced. It is conceivable that the motorcycle industry will have a serious stand alone recession in the next ten years. In 2017 the oldest Baby Boomer's will be in their seventies and the youngest in their late fifties. Every significant growth spurt of motorcycle sales for recreation in the US has been fueled by the post WWII generation . Motorcycles don't seem to hold the same absolute fascination they did for us in the '60's. Sure there are plenty of young riders, but its not as prevalent as it was back then. Too many competing interests and quite frankly in real terms (number of hours at minimum wage) motorcycling has gotten much more expensive than it was. By the way HOG is still an excellent buy. It ratios and beta are great compared to the industry averages. | ||
| Midknyte |
I'm continually amazed that people still believe that bullshit. hope you didn't think that I did. I was just pokin fun... I think the mean HD dealer will look much as it does today I'm in the same boat, different paddle. HD, CocaCola, Levi's. Hard to see any of them dissapearing any time soon. | ||
| Mmmi_grad |
Lots of people even those that work at the dealer are seeing the crunch. The majority of people who WANT a Harley simply do not have 17 GRAND to blow. Thats just the bike, what about costs that are involved with trips and everything else. A trip to Sturgis these days aint going to be cheap. You know what I mean. Sure you can live on the street and eat jerky, but hells bells this is a time to HAVE FUN. I dont think anything is going to disappear either but economics are economics. The wife and girlfriend dont just want a biker life. Someday cuts are going to have to made. On a side note I think Buell is doing a great job with Price and what you get. To me these days. I look at a new 2007 Dyna Glide and a 18 k pricetag and I think Damn someday, someday, maybe a few years older but still the price is a huge chuck of change for a middle class buyer. Factor in kids, wife who isnt interested that much...etc etc. bla bla bla rant over. | ||
| Rainman |
A good handling bike relatively cheap that gets good gas mileage and doesn't cost your dog for insurance will be a good investment as gas prices skyrocket and disposable income drops. Sounds like that XB12Ss, that Bonnie or my Blast, to me. | ||
| Cityxslicker |
bikes have always been expensive. Its the old back in my day a candy bar was a nickel story. I remember when sportsters were 3995 and it seemed like the world to me (of course I was 15 with only a summer job) now that they are double that, the bike prices have faired pretty well over the last 20 years. Way more affordable that housing, gas, coffee, insurance or sports cars have become. (relatively) | ||
| Tommy_black_shark |
I got my first new Sportster when I got out of the Army and it had a list price right around $1,800. At the time that price represented almost 1000 hours at the minimum wage. The insurance for that XLCH was in the neighborhood of $20 a year. That same day I could have gone down the street and bought any number of Japanese bikes in the 250-305-350 CC range for $600-750. Approximately 300-400 hours at the minimum wage. There were also lots of used Japanese bikes at half that price. I seem to recall the government not withholding any taxes if you weren't going to make more than $2,500 for the year. No problem for a part timer at $1.90 per. It was a very reasonable proposition for a high school student to buy a new bike if he wanted to use all his summer job money, or a used bike if he only wanted to use some of it. The 250's and 350's had plenty of zip and were the equal or better of most cars on the road in the stoplight GP. In other words you wouldn't be hesitant to own one. Compare that to today where a basic entry level bike is going to cost about 1000 hours at the minimum wage (and a hefty chunk for insurance as well). Plus, I might be jaded but the low end bikes of today are not particularly exciting. They perform the task of allowing a learner to learn without too much power or weight, but they are not the thing for a teenage studly to be seen profiling on. I think the lack of exciting bikes to attract the next generation of riders is a problem all the manufacturers are facing. I haven't seen any numbers but I wouldn't be surprised if there were more new riders over 40 than under 20. | ||
| Rainman |
The majority of entry-level bikes, aside from the Blast, are the same bikes that have been around since the late 70s early 80s, Nighthawk, Rebel, Ninja 250, Ninja 500, Vulcan 500 LTD, GS 500F, Virago 250. Missing are the CBs, GSs, KZs, XJs. Unfortunately, I'm not sure anyone wants any of those bikes. Most of the younguns I know want GSX-Rs and CB-RRs and ZX-Rs and things that are fast, wheelie and look good with tank tops, shorts, untied Air Jordans and a $500 racer-rep hat. I have to admit I felt like I'd had some manhood shortening surgery when I sold my Old Wing (800 pounds, 1100cc) and bought a Blast (500cc, 360 pounds) even though the Blast makes more sense for my lifestyle. How do you attract folks to smaller bikes? How do you justify the R&D for smaller, better bikes if no ones buying? (God save the Ninja 650R) | ||
| Bomber |
wrt cost of bikes -- Cycle World did a piece about ten years ago, tracking the price of a new bike from the mid-sixties to the then present day -- they threw in the cost of a variety of consumables during the same time frame, and the overall rate of inflation -- the news (good and bad) was that the price of a motorcycle had remained relatively constant voer that period of time, when comapred to other things -- brands that commanded a premium price at the beginning of the time frame examined (BMW, HD) commanded a remarkably similar premium at the end of the time frame -- the mean age of the buyer has, of course, risen since the mid-sixties -- it was very unusual to see a 50-something fella on anything other than a, wait for it, BMW or Harley back then -- now, i'm guessing the riders of a "certain age" represent a much larger percentage of the folks that are buying than they did then another data point is that, in the mid-60s, it was at least slightly unusual for both grownups in a household to be working full time -- these days, it is approaching the norm still and all -- bike sales today far outstrip what some view as the golden age of motorcycling -- I'm here to tell you, folks, THESE are the good old days! (apologies to Carly Simon) -- lots of bikes being sold and ridden, you could take a bike from the showroom floor, go into your way-back machine 20 years, and win Daytona with it -- specific bikes for Touring, Sporting, Commuting, Dual SPort -- the industry does face some challenges, but I'm thinking things are pretty much OK | ||
| Tommy_black_shark |
There can be little doubt that the bikes available today are the best engineered and made ever. It is also true that using either the "nominal GDP per capita", or the "relative share of GDP methods" that the price of motorcycles are comparable today with the late '60's. However, using the "unskilled wage" method the price is dramatically higher today. Or more correctly, there is not a machine available at a comparable price. What we see in the showroom is reflected by this data. Large, expensive motorcycles are relatively the same as they were from an "affordability" standpoint. Older more established individuals, less likely to be working for the unskilled wage find these machines attractive and easy to afford if the relative levels of discretionary income are compared between then and now. My point was that at the other end of the spectrum the choices and opportunities for the young/new rider are more limited today than in the past. For example: in '70 $725 was required to buy a Honda CB350, at the time it was the most expensive of the Japanese 350's. That amount is now equivalent to $3,700 for the unskilled worker. I'm not sure there is any new motorcycle (much less a desirable one)that can be had for that amount. Add to this dramatically higher and mandatory insurance and we have our present situation. Bike sales are at historic highs. The manufacturers must now look beyond their traditional customer base to continue the health of the business. | ||
| Bomber |
Shark -- great points, and all true -- fewer and fewer unskilled gigs available alla time -- and the day of the $200 beater Honda 350 is past, no doubt -- beginner bikes are few and far between -- I think I was at least the tenth guy that learned how to ride on my firs bike . . .. | ||
| 46champ |
I have to agree with Shark. I can remember bike tests from the late 60's and thru the 70's the tests on smaller motorcycles were tests on smaller motorcycles not beginner bikes. The way it's presented today would be like teaching your male child how to ride a bicycle on a girls bike, and then expect him to go ride in public and be proud of it. A couple of months ago someone posted a picture of a Blast in a dirt tracker frame, something like that is what is needed to foster some passion in a small street bike. By the way where is the spell check? it's nice that it tells me I've done wrong it would be nicer if it would tell me what is correct. Looking for words in Webster gets old. | ||
| Ft_bstrd |
I believe that Chinese and Korean bikes may be filling some of the low end price market. The quality isn't quite there yet, but it is improving each year. My parents had one of the first Hyundai Excells. For what it cost it was adequate. The latest Hyundais are quickly becoming equals with their Japanese counterparts. Kia had one of the highest quality and safety ratings of any manufacturer. Fortunately, the market isn't a closed loop. | ||
| Tommy_black_shark |
I believe that Chinese and Korean bikes may be filling some of the low end price market. The quality isn't quite there yet, but it is improving each year. FB: I hadn't thought of it before but you are hitting the nail right on the head. I read Walneck's every month primarily for the old road tests. Substitute Japanese for Chinese and Korean and I bet you have a quote from 1960-1964. | ||
| Teeps |
I heard a "Harley... Live The Life" commercial on the radio this morning. Stop by and see how affordable a H-D is, it's never too late or early to own a H-D. I don't have any idea what H-D will look like in 5 years. But the commercial it telling... | ||
| Tommy_black_shark |
I heard a "Harley... Live The Life" commercial on the radio this morning. Stop by and see how affordable a H-D is, it's never too late or early to own a H-D. It sounds to me like Harley knows that we are entering prime new bike sales time (especially in the north) and wants to make sure that prospective customers are aware that they can afford a Harley. I think the popular perception (even among motorcyclists) is that a HD costs $20K and up. And while there are a lot of Harleys in that range, new '07 Harleys start at $6,855 including freight. Harley does really good market intelligence and knows just how many cruiser bikes are sold in that price range. I think its smart advertising to let folks know that rather than an "imitation" Harley they can have the real thing for the same money. Unfortunately, for many folks a 883CC Sportster is no longer a real Harley. Makes me feel very old to remember that when I got my first new Sporty it was considered the appropriate bike for recently discharged Paratroopers and recently released felons. Now it is relegated to a training vehicle for middle-aged entry riders. I have heard any number of times folks say something to the effect of: "I want to get my wife something little to learn on, but she doesn't want an 883 Sportster. Maybe she'll settle for a 1200." In our super-sized world 883's have become little, and 1200's are mid-sized. I recently saw a comparison test of mid-sized cruisers in a magazine and the bikes were all in the 1300CC range. By the way, the 883 Sportster is a steal in todays dollars. Even using the most conservative translation from 1969 to 2006 currency (unskilled wage) it should cost about $9,400. Using the more realistic nominal share of GDP method it should be almost $15K. |
