Slow Down At Harley-Davidson

According to industry contacts there are indications of weak sales for Harley-Davidson in January & February. Harley sales may be down 20% in January and 12% in February. The worrisome part is that it can’t be due to the recent strike because during these 2 months dealers had adequate bikes inventory. Since other manufacturers might have lost sales in about the same percentage, it is once again the evidence of an industry wide slow down. Since the end of February shares of Harley-Davidson (NYSE HOG) lost more than 15%. In addition, it seems that in the wake of the subprime mortgage loans mess, many of Harley-Davidson Finance’s securitized loans have under performed, posting higher than expected credit losses and delinquencies. The beat goes on…      

10 Responses to “Slow Down At Harley-Davidson”

  1. 1 Bruce Mar 28th, 2007 at 9:02 am

    Every market, from time to time, needs a correction.

  2. 2 Johnny Shield Mar 28th, 2007 at 1:46 pm

    The Harley strike was a blessing in disguise: less bikes sitting on the HD dealers floor Beside the Sportster, Harley needs other entry level bikes to attract young buyers with appetite for performance.

  3. 3 DJ Chopper God Mar 28th, 2007 at 4:11 pm

    I have to agree with Johnny Shield. They need some fresh stuff all down the line. Then again Bruce is also correct that markets are cyclical.

  4. 4 John Mar 30th, 2007 at 5:12 pm

    Eh, this is a result of the easy equity in real estate drying up, which translates into a slowing economy- consumers can’t buy more toys when their houses start to get fairly priced, and our economy has been consumer products driven for a long time now;

    What is more troubling to me is Harley’s involvement in the CDO mess- oh WHY does a profitable company such as Harley have to screw around in such a scumbag portion of the market?

    Oh- I see I got my answer above, when I read about the CEO’s 2006 compensation……

    Dumbasses….. I love my bike, but the stock is going much lower- ask GM how their CDO biz is going…….

  5. 5 Brad Mar 30th, 2007 at 5:52 pm

    Harley tried to sell more bikes (60 months loans!!!) by financing people with no or poor credit history. Same mess for Harley as the one in which are now real estate subprime lenders.

  6. 6 dragon Apr 3rd, 2007 at 7:34 am

    The rich keep getting richer and the poor man is just plan screwed

  7. 7 CJ Apr 3rd, 2007 at 8:21 am

    You got it! I see Harley doing the same thing Ford & GM did. Lets build more plant and push more bikes out the door. Remember the days when you had to wait to get a bike, well it kept the resale value high. Now there are Harleys everywhere forsale driving the used market in the shitter. Don’t get me wrong, Harley is a great bike and I love mine, but I’m no longer going to go out and sell or trade mine for a new one and lose my ass.

  8. 8 Molly Apr 3rd, 2007 at 7:15 pm

    If I didn’t hate dealing with my local dealer so much I might have considered buying another new Harley at some point. Not now. I’m sticking with what I’ve got and if I buy another, it’ll be a Panhead. Harley need to pull a few francises and get them to buck their ideas up.

  9. 9 John Apr 3rd, 2007 at 8:23 pm

    Yep- I’ll just wait until people are squeaking on their mortgages in a few more months, and need to punt that harley payment to offset the rise in their adjustable/ insurance/property taxes-

    Harley is in a serious trap- they have to keep stuffing the pipeline with product to keep sales up to support the stock price, and the collateralizing tricks they’ve played with their debt has run out of steam….

    If sales slow, their debt expense goes up, profits drop, stock price drops, CEO gets fired for taking a fat compensation package in 2006 when he KNEW lean times were ahead….. LOL! At least it’s mostly in stock, so he’ll suffer like the rest of us, but watch for any notices that he’s selling shares…..

    It’s a normal cycle of business, and this bubble was bound to burst- the smart ones are taking defensive measures now (does Jesse James even fool with bikes anymore, or has he gone completely over to cars?);

    But ya, such is the trap of being a public company- shareholders want double-digit growth year after year, and that’s just not possible for long;

    Watch Harley drop to single digits, and then go private again. In the meantime, cheap used bikes for all!

  10. 10 Knuck Apr 5th, 2007 at 10:25 am

    It’s a cycle. Every thing cycles, be it car sales, home construction, latte, global warming. We repeat the past. Things will come back.

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Cyril Huze