| Author | Message | ||
     Court |
With all the excitement . . . I'd almost forgotten that Harley-Daivdson is in the news today as well . . . . Source: http://m.fool.com/investing/international/2011/02/ 15/this-is-the-future-of-harley-davidson#Articles This Is the Future of Harley-Davidson? Nick Kapur - February 15, 2011 Eighteen months ago, iconic American motorcycle manufacturer Harley-Davidson (NYSE: HOG) announced plans to enter the 1 billion-strong Indian consumer market. Three months ago, the company announced that it would build just its second-ever international assembly plant in the country. Today, the company has effectively placed a huge bet on India, a country that is truly in love with the motorcycle. Unfortunately, as I spend more and more time here in India, I realize that I cannot see this company thriving in its markets. Worse, I fear that Fools could feel the painful brunt of Harley's overly ambitious expectations. The Hog ethos When I think Harley-Davidson, I think open road, fresh air, and a cool breeze tearing through the nostrils of an over-the-hill, balding baby boomer. Thanks to a sustained economic boom, I think there are folks who fit that description and would be willing to shell out $20,000 on a new toy. But I seriously wonder if any of the actual joys of riding a Harley will ever come to the small few who can afford it. And for everyone else, it's simply not a reality. Still better than I-95 The hard truth for Harley is that driving in and around major cities in India has relatively little to do with open road, fresh air, and the feeling of freedom. In fact, the best way to describe road travel in urban India is adrenaline-inducing ... and not in the good way. The majority of one's time is spent idling in bumper-to-bumper traffic, as pedestrians play a terrifying game of Frogger between taxis and giant, overstuffed transport vehicles. The remainder of one's time is spent accelerating as fast as possible to jostle for position at the next bottleneck. One has to seriously wonder how appealing Indian purchasers will find the Harley-Davidson lifestyle when unable to enjoy this very expensive product in the way it was naturally intended to be enjoyed. It's analogous to asking how much you'd love your Kindle if you were only allowed to use it in the dark. The wrong market Roads certainly aren't clogged everywhere in this country. But the vast majority of eligible consumers live in major cities where they are. For these people, accessing free-flying highways is no trivial matter. Open roads could be hours away -- even if they exist in the same city. Not a small market In Harley's defense, India is undoubtedly a huge market with lots of potential. As the second-largest motorcycle market in the world (behind China), India purportedly hosted somewhere around 37 million motorcycles as of 2002. Compare that to the U.S.'s 7 million registered motorcycles (as of 2007) and you can clearly see why Harley is licking its chops. Unfortunately, the vast majority of Indian motorcycles are not discretionary, luxury purchases. I won't even get into the economics of how difficult it would be for 99% of people here to afford an object of that price -- but it's not inspiring. Motorcycle's here are not toys, as they are for most Harley owners in the States. They are a primary means of transport, often for entire families. And they are generally simple, straightforward, cheap offerings sold by names like Honda (NYSE: HMC), Maruti Suzuki, and others. Therefore, unless you're talking about an extremely small sliver of the market, Harley-Davidson and fellow luxury manufacturers like BMW and Ducati don't stack up favorably. If Harley is, in fact, only targeting the super-rich, let us not forget the aforementioned product satisfaction issues. Either way, making meaningful inroads should be an issue. The Foolish bottom line Harley-Davidson is expecting foreign sales to account for more than 40% of total sales by 2014. Today, foreign sales represent just $1.2 billion of the company's $6.2 billion in annual revenue. Clearly the company is expecting big things out of its international divisions and much of that will undoubtedly need to come from fast-growth markets like India. But I'm not quite so optimistic about its chances here. For some that can afford a luxury item like a Hog, the brand has a shot. And as the country grows richer and infrastructure improves, Harley's potential here could be significant. But my investment money would be focused toward entities that are trying to work within existing realities to succeed here. After all, a Hog isn't a Hog if you can't own the road. | ||
| Moxnix |
If the roads haven't improved in India in the last two decades, H-D should be selling them the Uly. Oh, that's right, it's no longer available. | ||
| Court |
>>>Oh, that's right, it's no longer available. No . . . you see HD abandoned the Uly, TT and XB to go pursue the "younger crowd". Why just last week they wowed them with one of the blackest $16,000 motorcycles I've ever seen. Pure genius. | ||
| Moxnix |
I've watched their new "no cages" commercial a couple of times. Interesting that they use the Sportster, rather than a "hog." Pricing for the younger and beginning rider. Still a yawn. In India I 'xpect Harley will go for the steam powered modped market, which starts by rubbing two sticks together. Wooden spoked wagon wheels. No leather seats for the locals, just Madras plaid. And room for a family of six. | ||
| Jon |
Now that Erik has launched his future, these stories make me laugh. They can't help but reveal never before seen articulations of wrong thinking. Every new facet, nook and cranny. | ||
| Slipknot |
When I was in India in 1979 there were flathead Harley trikes from WW2 being used for cargo and passenger hauling. The front wheels seldom made contact with the ground as 6 passengers rode in back. Indians are great at making something from nothing and I expect these newer bikes will provide newer motors gathered from the wrecking yards to update the cargo trikes. With horse power going from 15 to 50 maybe we'll see double deckers? Double rear axles and mini container hauling trailers? The future looks bright for medical training too as 2 and 3 inch suspension on Indian roads leads to growth in the spinal fusion industry and helmet free pirates are run down by ox carts. | ||
| 9ustav0 |
Here is an oficial press release of HD to Brazil (3 days ago) Harley-Davidson has plans to expand its presence in Brazil Sao Paulo (15 February 2011) - Harley-Davidson of Brazil announced today the development of a new network of dealerships and service as well as plans to expand its presence in the country "Harley-Davidson is committed to Brazil and making changes to ensure that customers here to enjoy the quality experience that represents p remium a brand like ours," says Mark Van Genderen, vice president of Harley-Davidson Motor Company Latin America. "We are planning to appoint other dealers in the coming months, aiming to create a network to cover the Brazilian market.” We are working hard to fulfill this promise as soon as possible. " The focus of the Harley-Davidson Motor Company in Brazil is part of the international growth strategy of the company. The company expects sales of motorcycles outside the U.S. are higher than 40% of total production in 2014. To achieve this goal, Harley-Davidson plans to name between 100 and 150 new dealers in the world by 2014. "We are excited about the opportunity that Brazil represents for our company. We have already taken important steps toward developing a network of dealerships that meet customer needs and is aligned with world standards of the company. "Certainly, 2011 will be a landmark year in the history of Harley-Davidson in Brazil, " says Longino Morawski, managing director of Harley-Davidson business in Brazil. One of the initiatives the company is opening a training center in Sao Paulo, located in the new headquarters of Harley-Davidson of Brazil, will also be used to train technicians from all over South America To provide an efficient service, Harley-Davidson of Brazil also is opening a parts warehouse in the region's beltway. The new distribution center will serve the dealer network in the Country The company, committed to its customers in Brazil, offers to connect, to whom he has need of services or more information, phone 0800 724 1188, or even e-mail sac@harley-davidson.com.br . "We reiterate our commitment to keeping consumers informed about each step of the process. Customers are always our first priority and we regret any inconvenience that occurred during this transition phase, "adds Van Genderen. Harley-Davidson Motor Company produces motorcycles Custom, Cruiser and Touring of high capacity and offers a full line of parts, accessories, equipment and products in general. For additional information, visit Harley-Davidson at www.harley-davidson.com.br . | ||
| Court |
I know nothing about the Harley-Davidson owner experience in Brazil. I am in frequent contact with Brazilian Buell Owners and, like the Italians, they are an amazing and active group. If the Harley-Davidson group is anything like the Buell group they have a bright future. | ||
| 9ustav0 |
Dear Court, HD has a great history in sales in Brazil, period. After sales always was a mess. This year they change the dealer (it was only one company) and get the sales for themselves. Its true that we have some younger folks riding HDs. But Bueller is Bueller... nothing compares our passion and friendship. I'm one of the founders of BuellBR Group (www.buellbr.com.br - and check on Youtube for buellbr / 9ustav0 videos), and I can tell you... Bets Regards to you all! Gustavo Sao Paulo - Brasil ex XB9SX 2006 ex XB12Ss 2007 ex XB12STT 2007 now 1125CR 2009 | ||
| Jayvee |
You know, a cheaper, more work-horse version of the Blast might work in some of these developing markets. Oh yeah...never mind. | ||
| Black |
When I bought my 2002 X-1 White lightning, I thought that Harley must really have their ducks in a row. Buell made me overcome my "I'll never buy a Harley ever" attitude (Based on an AMF machine). The company seemed to have really transformed itself. They were back into racing. They had just built an engine with Porshe. They had a company that would appeal to a younger demographic. They had Buell! They had a great story and that story was that Buell would bring innovation to Harley. That an American company could compete with the Japanese on the race track and that Harley would then be able to incorporate the cutting edge of technology into its cruisers. Rubber mounted engines, for example. When Harley unceremoniously dumped Buell, well I knew that they didn't have a clue about motorcycles. However, I did know that they had a bunch of MBAs running around telling them to drop anything that was not a core competency, etc., etc., ad nauseum. I paid attention though. When I dumped my stock, I only lost 25% of my investment vice what would have been much more. I figured that dumping Buell did two things, it bumped up stock prices.....and served notice to the unions that they would shut down their union plants just as fast as they would a non-union plant. It is unfortunate for everybody. | ||
| Court |
And the bad news just keeps on coming . . .
Complete STORY | ||
| Reepicheep |
.5% drop... and I bet that doesn't include the alleged Harley stuffing of the distribution channel. It makes you wonder how bad it *really* is... |
