Biketoberfest 2009. Or How Harley-Davidson Depressed Many.

bof1In addition to the overall economy, 2 parameters influence rally attendance. Gas price and weather. The way to know that gas price is no more an issue this year in Daytona is that nobody talk about it anymore. Weather was almost perfect, sunny and extremely warm on Thursday & Friday then with lower much more comfortable temperatures in the low 70’s on Saturday. So, no excuse on this front to explain this year’s shy attendance and depressed mood floating above Volusia County. I don’t care what the city & county official statistics are going to say in a few days. Visitor numbers are one thing, rally goers spirit is more important . And I am telling you, Thursday Harley horrible financial 3rd quarter results and Buell story depressed many rally goers and members  of the industry present in Daytona.

bof2Yes, Main Street seems as crowded, but only 10 hours a day, no more 18 hours or so. From Main to Beach Street you can cross the bridge without slowing down, just to discover on the other side of the river that “Custom Alley” has been replaced by “Tee-Shirt Avenue”. How many different tee-shirts in how many colors can you wear every day of the year? Depressing. All big vendors I know that were offered a free display declined such an environment. Went directly to the International Speedway. On the Motorcycle Manufacturers side, surprise. No Harley-Davidson or Kawasaki trailers in sight. I don’t know about Kawasaki, but I got quite upset to realize that Harley doesn’t consider important to show and demo their 2010 models during an event still gathering close to 100,000 visitors. CEO Keith Wandell declared on Thursday that “all efforts will focus now on the Harley brand (to justify Buell being dropped) and on leveraging its strength”. Does it mean that the motorcycles are no more the strongest part of the brand? Wandell also stated that “we are confident that we will continue to expand the appeal of Harley-Davidson motorcycles to the under 35 age group”. How? By missing rallies, by not showing your models at the Speedway to the under 35 age group going every day to watch the races and obliged to walk by displays? Even worse, Wandell added ” We also know that Harley-Davidson has strong relevance as a lifestyle brand beyond the dedicated motorcyclist. Some people may never ride a bike, yet are strong enthusiasts”. Harley-Davidson, what are you telling us? That you can live and survive just by selling the motorcycle lifestyle without selling the motorcycles? Is it your new marketing strategy? Why you didn’t show up in Daytona this weekend? Or was it only to convince Wall Street and your employees that you are serious about saving money?

bof3I don’t understand. How much cost 1 or 2 rigs driven from Milwaukee with 5 to 10 employees during 4 days in Daytona versus 1.9 billion ($700 million lent by our government) borrowed during the last year with about half of it at close to 15% interest? And worse, while I was visiting the Indian Motorcycle display, now the only American manufacturer showing bikes at the Speedway, a new appalling statement from Harley CFO John Ollins landed on my iPhone. “We have not quantified the benefits of increased focus on the Harley-Davidson brand as a result of discontinuing Buell, nor included any potential savings in our restructuring estimations”. So, Harley-davidson is now telling us that they don’t know for sure what they are doing and why? May it be that the company is at a loss, has absolutely no strategy in mind, just cutting costs right and left to please its shareholders by saving the stock? Depressing.             

bof4Fortunately, still at the Speedway, but half a mile east, the custom building and parts industry is still somewhat present with the trailers of major vendors and the presence of a couple of Customs Builders like Jerry Covington with a nice display of his recent one-off projects and proprietary parts and Eddie Trotta/Lorenzo Cycles showing same on the opposite side. Here, like later at Destination Daytona in Ormond Beach, vendors of bagger accessories (especially fairings, GPS, audio systems, floorboards, mirrors), and of electronic accessories (especially all equipments/modules making your engine run faster and smoother) confirmed to me that they are doing fine with a clientele confident that the worse is over, that they are going to be financially fine and thinking that they deserve to indulge themselves again. You can still meet quite a few of the major Custom Builders, but most are there privately, not working a display… 

Saturday is traditional “Rat’s Hole Show” day and for the 1st time it was hosted at Rossmeyer’s Coca Cola Pavilion. Refreshing to see that the enthusiasm of so many at dreaming and building new bikes didn’t die, although with a much more reasonable financial approach. I never missed any Biketoberfest since it inception in 1992. Independently of the economy, that you belong or not to the industry, a rally is still one of the best ways to spend quality time with your friends. For this reason, rallies are irreplaceable. Will not miss the next one. But, please Harley-davidson, if you really have a coherent strategy to benefit bikers in addition to your bottom line, please would you explain? I am certain we would all understand (photography Cyril Huze & Daytona News Journal).

Zipper's

66 Responses to “Biketoberfest 2009. Or How Harley-Davidson Depressed Many.”


  1. 1 Jeremy Oct 18th, 2009 at 7:38 am

    Thank you for keeping it real, Cyril. Good analysis of Harley contradictions and panic managing. I bet that before 1 year Harley will be for sale.

  2. 2 Blue Oct 18th, 2009 at 7:50 am

    ‘Harley-Davidson, what are you telling us? That you can live and survive just by selling the motorcycle lifestyle without selling the motorcycles? Is it your new marketing strategy?’

    We’ve already seen this in Europe. Some months ago, Harley announced that it wouldn’t be exhibiting the 2010 range at the International Motorcycle & Scooter Show in Birmingham, England. This is the biggest trade and public bike show in the UK, attracting over 100,000 visitors (many of whom are actively shopping for a new bike and seeing the latest ranges for the first time), but Harley felt it didn’t need to be there (despite having trumpeted how successful the 2008 show had been for it).

    Harley’s explanation for dropping out of the Birmingham show was that it had ‘increased focus on multi-location experiential programmes for consumers in 2009.’ Basically, ‘getting people to go to a dealer is cheaper’.

  3. 3 ian Oct 18th, 2009 at 7:51 am

    interesting and informative post – Bikeoctoberfest has long been on my agenda of things to do – maybe 2010 will be the year.

  4. 4 Bikermarc Oct 18th, 2009 at 9:30 am

    Well Biker Friends, I sit here this fine SoCal Sunday morning sipping great java and wondering – Has Harley-Davidson lost its way?

    Does the company even have a new “way” to go? They did not show up in Laughlin nor Octoberfest this year, two fine marketing and sales-generating and very relevant events.

    No one seems to know who’s in charge of their marketing strategy. Is there a marketing strategy?

    Then you have our many friends at the Dealership level. Are they next? Will HD’s primary distribution system be forced to sell allocations of socks and underwear? Groceries maybe?

    Come on HD. Let’s get it together quickly or you’ll be watchin’ Indian take over your marketplace in the months and years to come.

    Cheering for you but enough already. You ignore your target audience a great financial peril to your brand.

    My two cents.

    BikerMarc

  5. 5 J Oct 18th, 2009 at 10:10 am

    ….And this is why Buffet is buying the debt- and not equity- of Harley; See ya in bankruptcy, boys.

    Poor management can take down even the most iconic brand.

    Great analysis, Mr Huze…… Makes one wonder why Harley doesn’t have more Cyril Huzes on their board of directors, and fewer numbers crunchers……

  6. 6 Woody Oct 18th, 2009 at 10:25 am

    Great reporting Cyril, and not sugar-coated. Keep up the good work, it is much appreciated.

  7. 7 Chris Callen Oct 18th, 2009 at 11:13 am

    Cryil,

    First off, great post. I think an examination of the mindset of a rally like Biketoberfest is important. 100,000 people are still coming to town, and to make sure they are getting what they came for is the only way to have them come back.

    It bums me out that Harley has a somewhat lackadaisical approach to some of the things that are important to many of us. I always felt that abandoning the VR1000 program was a drag even though they weren’t winning but still had a trailer at the AMA Superbike events along side the other manufacturers. But then again, they have the NHRA that they focus on now. It makes me ask the question: “Is the demographic at the NHRA comprised of a higher income bracket?” Is Harley still trying to market to the crowd with more expendable income or is there something about that strategy that we don’t understand.

    There are many programs that Harley is involved in today that do reach out, and they have to be commended for that. After all, the climate has changed today and they can no longer take a one sided approach to identifying their brand with customers, since their customer base has become so diversified. New programs that reach out to women, young adults, Hispanics, African Americans, all have their own programs, needs and agendas but you would figure the rallies like Biketoberfest would be a place to reach all of those at once. Maybe their market research knows better and maybe someone from Harley will comment on follow ups to your post?

    As for Biketoberfest, I think, at least for a lot of us, it has always been the last hoorahh. We gather together for one last visit with friends and family before we put the bikes away here in the Northeast for the long cold winter. That part of it will always be alive but it may change again to be more of that laid back time, less business, less traffic and as a good friend reminded me last night, a different rally: “I think most things over time are biodegradable and need to fade away and be replaced by something fresh and new. Once an event becomes a memorial to its former self and turns into something completely different, it is just that.” That was a conversation I was having with Bill from Biltwell and he is right. Many of the people that are out there today are just not as obligated to the traditional rallies as the generations before them. If it’s cool, then it’s cool, if it’s not, it’s not. This becomes the responsibility to the people involved in the event to make it new and exciting each year while holding on to its roots, a daunting task to say the least. And yes, I do believe that the major players are then also responsible for helping create the environment by lending support in whatever way they can. So maybe the question should have been, “What DID Harley and other manufacturers do for Biketoberfest if they didn’t participate in the traditional manner they have previously?”

    On the business side, yeah man, it sucks to see Buell go down. My heart goes out to the man who spent his entire life developing that product and the many followers he had world wide. While motorcycle brands have come and gone in the past, this was an icon for the Americans that will never be replaced; an American Sportbike. But still there are many good things going on, like you commented about. Even the cats from the Limpnickie Lot, many of whom had to skip Biketoberfest simply because they had too much work to do back in the shop, have seen growth in 2009. So Harley’s numbers are down, I’m sure they have a team together deciding what to do to enter a new age, one thing is for sure, those numbers can’t be as bad as the AMF days, right? Makes me wonder how many of their dealers today would drive school buses and tend bar at night to keep the bills paid like many of the old guys that I knew did back before Harley had quarterly reports. One thing is for sure, motorcycling will endure, at one level or another, and for many of us, that will always be enough.

  8. 8 Bigalyts Oct 18th, 2009 at 11:59 am

    This is an Alarming “BIG DEAL” Daytona Beach = Harley Davidson’s………………. What the HELL were they thinking? THIS IS MIND BLOWING NEWS ! If I say the word”Daytona Beach” I think of Harley Davidson, FIRST ! I don’t think of Naked Broads, Tits, T-Shirts, Vendors, Beach Street, or The Speedway, even in the same sentence. These “ITEMS” come as a Plus after I visit Harley Davidson, Factory Bikes, or go to the Rossmeyer’s Original Location or new Location. THIS IS REAL SERIOUS GUYZ ! THIS IS REAL SERIOUS GUYZ ! I will Bet you that If they asked for Volunteers, Factory Employees, to help with Daytona Beach in Promoting our Bikes. what we Build, and you paid their expenses…………THEY WOULD WORK THE SHOW FOR FREE! ! Thank You Cyril for a VERY, Honest and accurate Report on HD and Daytona ! What is next, People ??? HARLEY DAVIDSON DOES NOT SHOW !!!!!!! I can’t believe it ! ARE YOU SURE CYRIL????

  9. 9 FREDP Oct 18th, 2009 at 12:06 pm

    Well, here’s my take on all this. Harley basically has NO Competition from any American Motorcycle Manufacturer, we consider to be AMERICAN. If anything, it may see a 1-5% saturation in the market from “custom/OEM manufacturers.” H-D consumers are extrememly dedicated to the product lines. ( as you all see at the rallies, without H-D corporate being there) H-D dealerships are representing at the rallies with product and accessories. H-D corporate does not need to be. “Selective” H-D corporate events and advertising will become the norm in promotion of their products.
    I think what H-D corporate is leaning towards is actually SUPPORTING the dealerships! All dealerships want business coming THROUGH the door. There are H-D dealeships out there on the brink of selling out or closing. H-D, I think, would protect that line of distribution at all costs.
    If H-D corporate refocuses financial resources off of extravagant show/ad costs , and produce higher margins and promotional programs to the dealerships, possible lower pricing of some models, the consumer base will increase dramatically.
    We forget the under 35 age group, wants to ride, and I’m believe because of the culture of H-D, they look towards that product first, but renege to lower priced foreign products that “SOUND” like a Harley. I’ve seen it time and time again.
    H-D corporate has a monopoly over parts/clothing vendors and EASILY dictate costs they will pay. By clearing the house of all these side ventures, old and new (Buell/Mv Augusta) they will be a lean and mean machine to be dealt with!

  10. 10 J Oct 18th, 2009 at 1:39 pm

    Fred- sorry, I don’t NEED to buy anything “Harley”, and these past few years, Harley HAS been dropping the ball in a number of ways;

    “Extravagant show/ad costs”? Huh? Towing one of their trailers down to Daytona? Putting up a couple of banners? They pay more in debt service in 10 seconds than it would take to put together a road show for the major rallies.

    Umm, I think you should ask the dealerships bout the “support” they’re getting from The Company- ask them how much of that TARP money that Harley has been lobbying for is earmarked for dealership support, for example- lol. The Company has been jamming overhead down the dealerships throats for quite some time, and has NO intention of proving ANY financial support;

    In fact, it’s my guess that one of the MBA’s that run Harley now has a plan not dissimilar to what is developing in the auto industry- flush out these individual franchise owners, replace them with company- owned outlets. At this point in time, there are laws against manufacturers selling their products directly in most states, but watch those change as we go thru this “financial crisis”- lol..

    I think this “under 35” fear is largely a fantasy of marketers, designed to protect their jobs. When I was under 35, I didn’t ride Harleys, and no one marketed Harley products to me. As my affluence grew, so did my interest in Harleys. NO amount of marketing would have enabled me to purchase a $25K bike when I was 25- lol. Harley needs to continue to market well to their core demographic, and sales WILL continue to generationally expand;

    But that’s a difficult concept to quantify to an investment banker when you’re trying to get them to issue new float to cover your 15% vig- lol.

    There are no givens. Historically, less marketing has never led to more success in business, and Harley CAN screw up a good thing. With no Buells, Harley dealerships became less interesting to me, and Victory, Indian, and a handful of other domestic manufacturers produce good stuff- I can be swayed, no prob.

    “Lean and mean”? Try “Bloated and arrogant”- big difference…..

  11. 11 Chris Callen Oct 18th, 2009 at 2:50 pm

    Wait a minute J, I agree to most of what you’re saying, you made some great points, except the under 35 part.

    “I think this “under 35″ fear is largely a fantasy of marketers, designed to protect their jobs. When I was under 35, I didn’t ride Harleys, and no one marketed Harley products to me. As my affluence grew, so did my interest in Harleys. NO amount of marketing would have enabled me to purchase a $25K bike when I was 25- lol. Harley needs to continue to market well to their core demographic, and sales WILL continue to generationally expand;”

    I was 19 when I got my first Harley, it was used but my contribution to parts, apparel and general attendance can not be discounted. That’s part of the problem I think. Everyone wants to gear their business towards the Power Consumer from the baby boomer generation and those cats are close to finished with their spending here. It was good while it lasted but that’s just the truth. Where does that leave everyone under 40? Up for grabs as far as I can see. You say that there is no competition to Harley….. man, there are young dudes out there building everything and they start with anything from used Ironheads to vintage Pans and Knucks to old ricers. It’s not a lack of money with a lot of them; it’s a lack of connection to the brand. You see a thirty something dude on a hand built Knuck rolling down the street, you can’ tell me he’s riding that because he doesn’t have the money to buy a new bike. Either way, including that demographic is essential for all of us! JMO –

  12. 12 Bruce Hunt Oct 18th, 2009 at 3:39 pm

    Great article Cyril. In magazines no one would dare to print what you wrote about Harley, its President & CFO by fear of not getting their advertising. It’s proof that you are independent and free. Reason why I read your blog. Chris Callen also made excellent remarks regarding the 35 age group.

  13. 13 Grayhawk Oct 18th, 2009 at 4:26 pm

    Reality in full light, Biketoberfest has been in decline even before the turn down in economy, yea or nea?

    HD said they were going as lean as possible and they are, a few guys and a couple trucks would not come close to HD setup costs at a simi major fall event. Money spent versus ROI.

    Sturgis at Rapid was cut way back this year, etc., etc. About as major as you get with the whole new 2010 line up and product to exhibit but still minimal versus past years.

    HD has displayed everything new for 2010 at Sturgis and beyond already and all is at dealerships on shelves and showrooms already.

    Destination Daytona has as big /bigger display than if the Motor Company set up, not to mention all the outlets in the general Daytona area.

    Most of the majors OEMS including customs have deemed rallys at high end setup venues are far less worth the expense just look at the vendor licenses and booth setups.

    Look at the trend of local rallys in numbers way up and everywhere everyweekend. Dealers showing/setting up there, less traveltime/expense, etc., same for Joe Customer.

    Last but not least most figured mid 2010 was the best case that things as a whole would start coming around and have tucked their wings in.

    Todays reality is if Heath Care, Crap and Trade, Vat Taxing and taxing on any and all will extend this dilema and prospects of deeper decline a very possible forecasted outlook if voting minds don’t reel it in; this will get far worse in time and casulties as we have seen only a false bottom as all the bad Fannie Mae and Freddie Mac paper is still on hold at the banks and not being valued or packaged and sold so that is just out of site out of mind to most not to forget the looming Commercial loan failures lurking to come. Toy/Fun Loans to those in the loaner brackets are far and few between no matter the interest or make of want.

    The guy who ran Johnson Controls may have a better long range Business head than a lot are giving him credit for maybe a bit of insight to save the company in net decline as much as can be when you cut product from 360k to 227k plus or minus numbers and a base in decline.

    Its a major revisiting of supply and demand and sizing for the future not so different than businesses of all sizes just proportional. Wish them the best as so goes HD like it or not so goes a major impact on the rest of us so yes its a gloomy time but make the best of it, be business smart and move forward with a plan of survival, maintaining and sound path out as it improves with an evolving markets of regions, likes, and numbers in change.

  14. 14 John Oct 18th, 2009 at 6:49 pm

    Seems like the same old issues, too many bikes beng made overseas and getting into the USA cheap , tuff to compete against cheaper bikes that still look and run great. Government is to blaime , where are the import taxes and duties that should put these foriegn products into a competetive pricing mode with Harley. Seems like nothing runs in our favor in trade until a near total collapse of an industry , how long are are law makers going to wait on this one. To much of the bring the whole World into the game and let overseas competitors kick our a@# so they can all live good too. What about keeping our Icon industries strong and let the rest just make toasters and not bring cheap great looking and running motorcycles here without equel taxation and duties.The playing field needs to be evened, why would a young upstart kid want to by New Harley when he has a job that pays $9.00 an hour, umh, lets see, he or she must say no Harley let me buy a cheap foriegn bike. Raise the freaken taxes on imported mechanical products.

  15. 15 1550tc Oct 18th, 2009 at 6:50 pm

    Guys did Daytona ever really need 2 bike weeks?

    Wow 100k people can i asl you guys what was the attendence at its highest?? for the fall event?

  16. 16 J Oct 18th, 2009 at 11:00 pm

    I see what you’re saying, Chris, tho I think you’re confusing my note with Freds- there very much IS competition for Harley, and I made it very clear I won’t have any problem shopping around.

    Personally, I think that Harley SHOULD return to a more “arrogant” business style, in one sense- limit bike production, make their product more exclusive, and quit trying to sell me lighters and sofas. That the CFO clearly thinks that he has a business plan without motorcycles is seriously flawed logic- it’s this sort of short term, quick-buck thinking that has plagued The Company ever since they went public and got in bed with investment bankers.

    It’s great that you were able to buy a Harley at 19, but my point was that my ownership of Kawasakis at that same age didn’t prevent me from appreciating and ultimately owning Harleys. The Company did ok up until about 10 years ago not trying to be everything to all people, because ultimately, that sentiment dilutes the brand.

    Rolls Royce would sell a BUNCH of cars today if they popped out an entry-level model; Cadillac tried that with the Cimmeron- didn’t work out so well for what was once THE iconic brand, even if the car hadn’t sucked. The Buell really wasn’t in that same category, so I think it’s a shame to see it go- this certainly is not gonna help Harley sell more Harleys;

    Then again, maybe Harley will snag a few of those Buell stylists and engineers, and we’ll see something more interesting than new paint every year.

    Build a good enough Road King, and you won’t have to worry about how to get 19 yr olds off their Ninjas- eventually, they’ll come to you.

    Harley does understand this; Problem is, it’s being run by a bunch of short-timers who just want to make a big score with their stock options and move on to the next deal; 20 years IS short time when all you’re there to do is polish up the equity side of the business.

    When Harley votes some real industry people to the board, then you’ll know they’re serious about their long-term business success; Until then, gonna be tough to survive while paying 15% vig.

  17. 17 Leo Oct 19th, 2009 at 12:19 am

    First of all thanks Cyril for a great site and keeping us up to date. I admire you speaking your mind against the conduct of HD by not being at Biketober fest. I would appreciate you letting me speak frankly about how I see it.
    IMHO, I think that HD has very much insulted the whole biker community by being a no show at Daytona and the other shows. Daytona bike week is pretty much Harley week for the most part. They should show some appreciation and have the biggest ever Harley owners only party at Bruce Rosmeyer’s Harley Davidson Daytona. Bruce Rosmeyer was a genius and did great things for Harley. He was the biggest seller of Harleys in the U.S. till his recent death riding a Harley. The way things are right now, the Prez himself should take off his wooly crown and be there at least a couple of hours a day handing out hot dogs and shaking the hand of the average Joe that keep him in business. HD has great bikes but has always relied too much on the ‘ I buy American heritage and lifestyle’ guy willing to pay 17-30 grand. Especially the last few years that it became trendy and cool to have a Harley and all the expensive clothes plastered with the HD logo.
    Those folks with that kinda extra income are becoming more and more rare.
    Add to that the Japanese 7 – 11 grand excellent quality, state of the art engineering with fresh styles and it’s obvious where a lot more of the riders are gonna spend they’re money. Stop passing the buck and blaming them for doing a good job at it. HD is gonna have to forget about the easy money and start to learn from the competition, by doing a better job, not by planning to give less. The American Indian motorcycle used to sell better than Harleys and the only HD war contract saved them while Indian and many others didn’t survive the depression. Harley had it easy and dominated after that. Japan is not a third world country or India where people work bare-footed for 20 bucks a week. How can they build very good quality bikes, pay the U.S. for the privilege of selling here and still be able to sell them for a lot cheaper than the price of a HD? Maybe they should find out how and beat them at there own game. The days of Harley segregation where you couldn’t even be in the same Daytona campsite, got no hellos and dirty looks for riding a Jap bike are gone. Time to get to work and stop blaming others. I wonder what the motorcycle world will look like in 10 years. Maybe it’s Victory’s turn to survive the storm!

  18. 18 Pop Oct 19th, 2009 at 6:11 am

    The last new Harley I bought was a Bad Boy in ’96. I have ridden customs and Indian since I finally had enough of the HD “factory image” thing. I am one. There are others.

    Harley made a point of cutting off the core in the seventies between AMF’s ridiculous effort to make Harley compete with Honda and then the direction the family promoted when they bought it back. It was clear then that the factory was quite capable of walking away from a loyal segment in favor of attracting what marketing considered a more lucrative consumer. It was good business monetarily and lousy business philosophically. Well you can’t run a business on philosophy, however mystique plays a role in motorcycle sales and if you on the one hand base part of your marketing on mystique while at the same time rejecting the people who created the mystique that you now sell, it’s not rocket science to figure out that you are marketing a contradiction.

    Now Harley has decided against showing at Daytona. Why is that a surprise? The factory is planning a strategy for sales that does not include the current generation of core riders. It worked for them in the ’70s and they are going back to the playbook that got them through the last dark days.

    There are plenty of bikers customizing iron, American, Euro, Asian, you name it. Being a rider is not about a brand that many of us tattooed to our flesh. I learned that lesson from the Motor Company when Milwaukee made it clear that my kind was not in keeping with the image they were commited to and that the parts for our aging rides were not going to come from their dealers since the space was allocated to “lifestyle products”.

    I wish the bar and shield the best. It’s a great machine and has history ingrained in many of us. But for Pop riding is life not lifestyle. I haven’t missed buying Harleys in 15 years and Harley hasn’t missed my money, at least not until now.

  19. 19 Freedomlaw Oct 19th, 2009 at 6:21 am

    I really enjoy Harleys (as well as my Indian and custom bobber from Swift). I enjoy motorcycling. However, I LOVE this blog. Cyril, once again, you are on the money in your analysis.

  20. 20 Scott Oct 19th, 2009 at 6:53 am

    Withdrawing from sponsorships and trade shows are a typical knee jerk reaction in the corporate world. It is all part of the mentality that gets them in the mess to begin with. Worry only about today’s bottom line and we will worry about next weeks when it gets here. It takes considerable cash to build and transport and staff a display for an event. The corporate though train is it will cost me X dollars to attend the event. Will my sales exceed this during the same time period due to our attendance? While we look at Biktoberfest with passion, the motor company merely looks at bottom line. The corporation exists to make money. How they make money is secondary.

    Please don’t look at this as defending Harley or any other corporate entity. I disagree with the direction they have taken over the last 2 decades. I understand the reasoning behind some of it and am totally baffled by the rest. There are a lot more people that can afford $25.00+ t-shirts than motorcycles. I fail to understand turning to selling furniture and popcorn machine to promote the biker lifestyle. Clothing and accessories made in China has a lot higher profit margin than complete US manufactured motorcycles. Take away all the glitz and glamour of Harley Davidson and the board of directors is no different than the board of directors of Citicorp.

  21. 21 MDK Oct 19th, 2009 at 7:19 am

    H-D screwed Indian for that war contract by not following the guidelines set by the DOD who also screwed Indian by not tossind out H-D for doing so. Since the early 90’s H-D’s big head and overly priced bikes has a lot to do with getting them in the mess they are in. I can’t believe that for the same price of a middle of the road H-D I can buy a decent car. With that being said look for the new Indian to go belly up for gossly overpricing their product. I believe the Quality is there but damn that’s a wad of cash and IMO they missed the window for those prices.

  22. 22 Newtonian Oct 19th, 2009 at 7:43 am

    Lot of good points here but would take issue with some recent remarks about Buell :

    If EB had been bright enough to abandon his name, and use theirs, HD might have had some hope of selling “his” bikes.

    Insiders who knew him from day 1 said he was never interested in HD-type engines, only in finding someone to pay for his racing, his ego, and his – often clever – ideas. HD went round the world shows with stands that always played the Jay Springsteen card but never had any ‘bikes that bore any resemblance to anything vaguely sporty.

    Buell was ashamed of the Sportster motor and did his best to hide it. His styling was piss-poor from day-one – which is not what The World expects from the US – and reached a new nadir with the Apple Mac plastic bodywork.

    Good riddance therefore.

    The Trade will be relieved, because the only reason Buells were ever present – in Europe, at least – in show-rooms was because of massive pressure from the importers. and anyone who is in the least bit surprised at this denoument has been under a stone.

    The writing was on the wall 10 years ago once he started to “hide” the engine, and it the wall got flood-lights on it at Milan in 2008 when the Rotax was shown.

    There are a lot of clever people on the design-side of the trade, with clever ideas just like some of Buell’s, but they just never got some bunch of management-idiots to fund their fantasies like EB did. I would say he got away with it for far too long and should consider himself lucky.

    His ideas didn’t sell, he blamed the market for being stupid and carried on in his own blind alley until HD pulled the plug, end of story.

  23. 23 Grinch Oct 19th, 2009 at 8:24 am

    It was over when Harley took away Harry Molnars dealership away from him because he refused to set up a boutique. He was the 3rd origional Harly dealer in the country. Harry told them he sold Harley’s not clothes.
    The Molenaars were the founders and long-time owners of Illiana, creating the original dirt speedway after World War II. Motorcycle competition was featured at the track during its early years – 1945 through 1947. Auto racing action was first presented in 1948 with the first stock car racing program held on Sunday afternoon, November 14, 1948 at the speed plant that was simply known as “Molenaar’s half-mile.” Harry Molenaar died in October of 1999, while Mrs. Molenaar passed away in April of 1994.
    He knew then what you know now.

  24. 24 Sev Oct 19th, 2009 at 8:29 am

    Nice article Cyril. TRUTH finally from some one who is not owned by the Harley Advertising Dollar.
    Now all we have to do is put the truth out about all the inexpensive bikes & parts that have hurt so my consumers.
    So far our experience with repairing these everyman specials ,13K-15K bikes has been entertaining.
    It does come down to you get what you pay for.

  25. 25 Fedup Oct 19th, 2009 at 8:40 am

    Elect Cyril Huze, Chris Callen & Jesse James at the Harley board of directors for a deep HD cleaning and a ton of good ideas.

  26. 26 Brandon Oct 19th, 2009 at 8:45 am

    And Harley advertise on Cyril Huze blog…Cool.

  27. 27 Tommy Graves Oct 19th, 2009 at 8:59 am

    Good morning Cyril!
    I am 5 days behind on 2 bikes with not a minute to spare….but yet I just had to spend over 2 hrs reading every word of your blog once again. Now that’s how to start my day! Loved the HD Biketoberfest writup. Keep those blogs coming!

  28. 28 A 1 cycles Oct 19th, 2009 at 9:28 am

    i didnt trailer my bikes to any show, set up a booth, or generally plan to do any business. but i did walk around and sway hi to all of my vendors, friends, industry magazine types, i hit all the shows as a spectator and not a competitor…it was evident that even the big companies have tightened their belts, very few big rigs, much open real estate on rossmeyers property, the crowd seemed good but it doesnt mean they are buying anything…i really beleive all of the money the people are spending on is doo-dads for their bikes, tires, oil changes keeping the bike going a little longer, and clothing..i cant say enough about the clothing. i was completely flabbergasted when i saw a couple come out of jp cycles and strap a harley ceiling fan on to the back of their 2003 ultra classic…no new bike but an h.d. ceiling fan made in indonisia to install in the family den when they get home?

  29. 29 Jeff Nicklus Oct 19th, 2009 at 9:38 am

    I have one question for all of you giving HD hell for being a No Show at the events:

    Would you rather see HD at the events or succeed as a business?

    I really believe that this is an issue here. HD is in SERIOUS trouble and the events do not put dollars in the corporate coffer. The events may well help the local dealers and it may sell a few bikes but all in all the $100K HD would have spent to attend Biketoberfest with a full display is money better spent elsewhere. Now before some of you know it all arm chair quarterbacks out there say “NO fuckin way it costs $100K to come to Biketoberfest” …. unless you have ever paid the tab you have no clue. For example: I cannot bring my transporter to Biketoberfest and pay the associated truck expenses, driver, plus 4 employees, housing, space rental, local licenses, airline tickets, car rental, food and insurance for less than $60K …. so figure HD and 3 rigs etc ….. their ticket would be close to $100K. Multiply that times 15-20 events a year, now you are talking serious bucks (for the mathematically challenged among you that is $1.5M-2M annually).

    That is my 2 cents worth.

    Over & Out,

    Jeff

  30. 30 Joe Skonecki Oct 19th, 2009 at 9:49 am

    Great feed Cyril,

    This where all you builders can get business. The capitalist system can still work for you all. If the giant falls you little guys can fill in the gaps.

  31. 31 TheFink Oct 19th, 2009 at 10:13 am

    We ride what we choose to ride. We choose based on the choices available and affordable. We sacrifice certain pleasures to indulge in others. I don’t ride H-D because of what the corporation is doing today. While the mystique of several brands and the on-the-road lifestyle brought me to ride, I ride H-D because my Dyna suits me best of everything available within my ability to acquire. I love riding and maintaining my Dyna.

    That being said, it is interesting to watch the Company position itself in the new and difficult economy. I wish H-D, and every manufacturer in difficulty the best, and I leave it to each of them to make the decisions they see fit. Mine is not to judge or criticize. I did not buy the company…I ride their product…and it is good.

    Will I feel that way in ten years? Time, and how ‘the product’ (not the brand) is managed will tell. Everything will be what it will be. Carry on H-D. Carry on Cyril. Carry on fellows and gals. I hope you are enjoying your time here. It’s all we’ve got. Be good to each other, and ride like the wind.

    Peace.

  32. 32 Rip Oct 19th, 2009 at 11:06 am

    I have to agree with Jeff until your the one that has to foot the bill for many of these events you can’t imagine the costs. This is a dilemma that all of us face as both manufacturers and dealers where the money would be best spent as we all know….your conspicuous by your absence.

    And as MDK mentioned and something that has baffled me for years. How can the cost of a motorcycle be equal to or more than that of an automobile that has double the wheels, multi more cylinders, seats, glass and miles more wiring? Yes, I understand supply and demand and production volumes but something just doesn’t add up here maybe it time to look within the production systems

  33. 33 dgbyers Oct 19th, 2009 at 11:45 am

    Harley-Davidson is making some poor choices in the short term.
    I wonder why there was no presence at Daytona this week? Are the 2010 models not worth promoting in the saturated, declining market?
    I can understand selling MVA but shutting the doors at Buell esp since the intro of the WORLD CLASS WINNING rotax mill will haunt H-D forever.
    Just my 2 cents.
    BTW, I am a Red Seal, PHD trained, career motorcycle mechanic (30 years) primarily working the H-D Buell dealership network for over a decade now.

    My feeling is that WARRANTY FRAUD is by far the most important issue facing/costing the MoCo.
    The cost of attending events is minor in comparison.

  34. 34 Chris Callen Oct 19th, 2009 at 12:11 pm

    Great Post dgbyers –

    Now there’s a good topic for Cyril to take up on another post here. Warranty Fraud. I wonder how many people know what the cost has been to dealerships and Harley for the rise in Lemmon Law returns. I know a cat that is a PHD tech at a local dealer and he said as soon as the economy got tough he found customers trying to work the system to use the Lemmon Law and get a court order forcing the dealership to give them their money back for their bike.

    Now the reason I say fraud is the loop hole that exists. No one wants to talk about this but the problem is that the Law, at least in our state, depends on the number of times that a bike has been taken in for the same problem in a given time frame. What the dealerships don’t have is the ability to see that the customer has taken it to other dealers in between visits there by giving them the need requirements to file a case.

    And let’s not even talk about the guy coming in to the dealership that says “My bike is making a funny noise” or “It feels funny going through a turn” How can these be legitimate warranty complaints that can go against the Lemmon Law if the techs can’t find anything wrong with the bike. It’s gotten out of hand to the point that my buddy, who is service mgr. is ready to quit his job.

  35. 35 Darin Maltsbeerger- MTI Instructor Oct 19th, 2009 at 12:30 pm

    Cyril,

    Thanks for a great post. You truly have the insight that many of us lack. I always feel “well grounded” after I read one of your posts and find that I’m having the same thoughts that you and many of the other contributors here have. Keep up the good work.

    -Darin

  36. 36 doc Oct 19th, 2009 at 12:32 pm

    Harley davidson stock up 22.9% since last Thurs. Market know sometning we don’t know?

  37. 37 Cyril Huze Oct 19th, 2009 at 12:39 pm

    Doc. Most often, Wall Streeters buy a stock on bad news (firing people, closing plants, getting rid of a division, etc) because it makes the company immediately more profitable and they bet that the worse is over. They don’t care about the long term of a corporation. They “buy the trade” in & out & in & out. Wall Street is sharply up during these last months not because the economy is better but because profit margins increase when you fire people and/or subcontract to cheap labor. Wall Street & Main Street are very often disconnected. It’s very true right now.

  38. 38 Manhattan Choppers Oct 19th, 2009 at 12:49 pm

    @leo. very well put..

  39. 39 Olly the Aussie Oct 19th, 2009 at 1:27 pm

    The bigger they are, the harder they fall.

  40. 40 hoyt Oct 19th, 2009 at 1:27 pm

    Like many, I can only afford one cycle at the moment. When I was shopping, I had 3 on my list. The 3rd from the top of the list was a Moto Guzzi V11 Sport. It is now in my garage.

    Point: Guzzi (very small budget in comparison to HD) managed to show up at the IMS convention. I was able to sit on the bike and spend quite a while checking it out that day.
    Plus, I was able to walk around and try my other 2 choices right away….and found that the Guzzi fit better.

    Prospective buyers are much more comfortable doing that at a convention than doing that at a dealership any day. My mind was changed as I went into the “test ride stage”.

    Had Guzzi not been there, I would be on another bike and not as happy.

    Not showing up to these events is a mistake.

  41. 41 Leo Oct 19th, 2009 at 1:31 pm

    Jeff has a good point that is worth considering but cant they think things outside the box a little? I’m no business genius but I think that its obvious that if you alienate (intentionally or not) your loyal customers its’ bad for you..very bad. I think they’re dropping the ball big time for a perfect opportunity to turn something bad into a good opportunity. Nobody has more brand loyal followers than HD. It almost looks more like religion the way some are so passionate. They could understand if you don’t bring bikes to ride. Ok, pulling a fleet of bikes around the country for people to get a ride around the block might not worth it to them but why not at least have a presence there. But don’t say ‘We moved on to something better for us’.
    Have a big tent with something different than everybody else at the show. That alone would help you stand out. You have Destination Daytona for goodness sakes. Call it ”Bruce appreciation day” hand out free Orange bandanas with a flyer that says ‘We love our loyal HD riders” and have pretty girls putting them on the folks keychains. Give them extras they could give to fellow riders. Thousands would be proudly ride everywhere with that orange bandana flapping like a flag from their belt loops and tell others to do the same. Involve them in the rescue of their loved HD. A child that loves his father prefers a day fishing with his dad and a loving smile, than a fancy toy from a father he never sees. Hand out some VIP cards they could take to they’re local dealer to ride a bike. Makes them feel special and there’s a better chance the impulse buyer that went to the dealer will fall in love and make a bike purchase there than a guy that has time to think after he gets home tired from the show. This isn’t about haters on the blog talking trash. It’s about tough love from hurting HD riders speaking up. Ok, they had a bad year, but how many good ones did they have? It doesnt take a lot of money to say ‘We love you too and we’ll beat this thing together’.
    Send a few guys from home office to look people in the eyes and shake some hands. Willie seems like a nice down to earth guy. Maybe he’s created a corporate out of his hands monster that just looks at the investors. They need to change the attitude. I think loyalty is the best thing HD has by far and is what keeps them ahead of the game. If they loose that, it will hurt everyone that is passionate about riding. Loose biker passion and we will all ride Vespas in 20 yrs.

  42. 42 Jeff Nicklus Oct 19th, 2009 at 1:39 pm

    Leo,

    Well said!

    Over & Out,

    Jeff

  43. 43 Leo Oct 19th, 2009 at 2:45 pm

    Thank’s Jeff, I appreciate that especially comming from you. I wish you the best with your shop durring these difficult times.
    Leo

  44. 44 Bigalyts Oct 19th, 2009 at 2:59 pm

    You KNOW WHEN BUISNESS IS GOOD YOU GO ADVERTISE, WHEN BUISNEES TURNS BAD THEN YOU MUST ADVERTISE. yOU WEL WRITTEN AND WELL PROCLAIMED MARKETING MAGNETS, FIGURE THAT WHEN YOU DON’T SHOW EVERYBODY KNOWS THAT THERE IS A PROBLEM. NOW LET’S FIGURE HOW BAD IS THE PROBLEM? IF YOU DON’T COME TO PLANTCITY/TAMPA , FOR THE ANNUAL STRAWBERRY FESTIVAL , WE UNDERSTAND THAT THE MARKETING FUNDING IS ON RESERVE FOR THE MORE MEANINGFUL EVENTS. WELL , IF THAT MEANS YOU PASS ON GOING TO DAYTONA, IT SOUNDS LIKE YOU ARE,…………AT THE BEGINNING OF THE END.

  45. 45 Don Oct 19th, 2009 at 3:32 pm

    Harley has not recognized their customer’s for a long time, as evedenced by the 100th anniversary party in Milwaukee featuring Elton John!

  46. 46 Pop Oct 19th, 2009 at 5:05 pm

    On the contrary Don. The Motor Company knew damn well what they were doing with Elton John headlining.

    The misconception is not a case of HD not understanding who their target market is. The misconception is that so many of us believe that HD is making motorcycles for us..

  47. 47 1550tc Oct 19th, 2009 at 5:50 pm

    Jeff

    When they went outside in Sturgis, how much did theyreally save?? It wasnt like like some body else was giving the city more $$ for using the CC in Rapid City

    Being outside and with minimal staff out there made HD look like total 2 bit PIKERS.

  48. 48 Woody Oct 19th, 2009 at 6:12 pm

    had H-D asked around early enough, I venture they could have found a location for their semis for free. I know of lessor names getting comped to use as a draw for attracting other vendors paying full boat. Empty spaces at Destination? Bet something could’ve been worked out. Harley has been selling sizzle over steak for years, and my hat’s off to them (‘cept for the Elton John gaff) for being the best at it. Nobody throws a party like the MoCo, and that bragging rights goes a long way. For their 100th, look what they put on in Milw. For their 50th, Honda passed out keychain fobs and vest pins. What’s Harley going to do next year-juice boxes?

  49. 49 Jeff Nicklus Oct 19th, 2009 at 6:28 pm

    1550tc,

    I don’t exactly know what HD was paying in Sturgis but I can about bet they saved 50% by moving out of town. Again, how much that is I have no idea.

    I think some on this site do not realize what dire straits HD is actually in …. their financial house is seriously on fire and they may not make it. HD needs to cut every unnecessary expense possible and that includes attending the shows and doing demo rides. (The savings in insurance premiums for the demo rides alone would be a significant number in and of itself) Besides the shows should be the responsibility of the local HD dealers anyway, it is not necessary for the factory to be there.

    2 more cents worth …..

    Over & Out,

    Jeff

  50. 50 DK Oct 19th, 2009 at 7:26 pm

    I work for a company that is 30 years older than HD. If our business was as down as much as HD, our managers, CEO and CFO would be shitting bricks. HD is facing some serious hardships and missing Daytona is just a start.

  51. 51 Grey Beard Oct 19th, 2009 at 8:25 pm

    This is my take on whats happening with Harley and the bike market.
    Harley experienced the same phenomenon the baseball card, model railroading, and comicbook hobbies went through. All the baby boomers had some expendable cash and decided to recapture the memories of their youth. Now they wanted toys that either they had, couldn’t afford, or wasn’t allowed to have in their younger yrs. In doing so, this created a hype on all the above markets, supply couldn’t meet the demand. Inturn everybody came out of the woodwork to grab a piece of the $$$$ pie, this ran parallel with all the above hobbies.
    Going back to the 70’s and early 80’s Harley was manufacturing a total of 60 to 75 thousand bikes a yr, now fast forward to the early to mid 90’s where there’s a demand on Harley which created a waiting list of 6 to 12 months for a new Harley which only fed the frenzy. If you were lucky to get one back then, you could have sold it the next day and made $2k on it. By 2002 Harley was manufacturing 200,000 bikes a yr.
    The way I see the market today, this is the starting downward slide to getting back to normal.
    I’m sure the old guys that have been around will agree with me.

  52. 52 justin Oct 19th, 2009 at 10:50 pm

    I agree with leo, in that it would’nt cost much to do the same thing they did back in 82′ put the exec’s on the road go to the big shows & put that hand in the hand of the man that supports you & your company. It would mean 100 times more to me for willie or the (vice pres in charge of acorn nuts for that matter) to say thanks for your support I appreciate it, than for that same Freightliner & trailer to show up. To say that Harley should set up at the home dealer is kinda dumb, like jeff said why pay upwards of 100k to show the same thing already in an air conditioned building. Nobody would be going to that truck to see something new. It would be like Chevy driving to your local dealer to show off the new models. Like the old saying goes hindsight is… I really do think they are trying to save money. It burns my soul to think about but look, a T-shirt at a harley dealer is around 30-45$ maybe they have $5 in it thats profit in the bottom line. In the eyes of a CEO it’s easy money, and every one has been to a bike night & seen a soccer mom wearing a $45 sequen shirt. The bottom line is things have changed in my eyes & not for the good, maybe?

  53. 53 JP Oct 19th, 2009 at 10:58 pm

    If HD wants to cater to the 35 & under market, they better start buying up 20yr old Sportsters. I see at my shop everyday, under 35=an old Harley (think mid 80’s and back) or a Jap bike newer than 2004. There are some that will spring for a newer HD and also some who will build their own. I’m not saying the old ones are clapped out either. But you can buy a used Sporty for $3500. That’s a number the wife/GF won’t leave you over.

    I’ve got a used 2008 Vulcan 900 on the lot right now, 5500 miles, at $4,000. The average chick won’t know the difference between that and a big twin and in reality, that is what most 20-something guys are buying a bike for anyway.

  54. 54 Mike L Too Oct 20th, 2009 at 10:06 am

    Pop. You are right. I’ll add that they just want to use “us” to show off such a wonderful, 2-wheeled mystique. We the riders are a part of their advert scheme. We are just like Elton John to them. Yes, we are all gay folk that over accessorize.

  55. 55 1550tc Oct 20th, 2009 at 10:07 am

    Jeff

    but I can about bet they saved 50% by moving out of town. Again, how much that is I have no idea.

    Jeff did you hit your head againLOL……….the lead in LEAD must have got to you??

    they moved out to the parking lot, instead of being inside the Convention Centre, Jeff they still had a do for the HOG folks! inside the CC

    DON

    Harley has not recognized their customer’s for a long time, as evedenced by the 100th anniversary party in Milwaukee featuring Elton John!

    NO KIDDING, would have loved to been a fly on the wall of that meeting before and after the show……..the BROKE BACK MC is one market where they could probably have good growth in!!

    Don they more than made up for it with Bruce last year!

  56. 56 FUJI Oct 20th, 2009 at 10:43 am

    HOW ABOUT THIS. BACK IN THE MID THIRTY’S HARLEY SOLD A WHOLE MANUFACTURING FACILITY TO THE JAPPANESES. PLUS THE RIGHTS TO BUILD HARLEYS UNDER HD GUIDE RULES. ALL OF THIS WAS A SURVIVAL MODE FOR THE CO.

    IT JUST COULD BE THAT THE YORK PLANT IS HEADED TO CHINA WITH ENGINEERS IN TOW WITH WILLY G TO DESIGN A NEW VERSION OF HARLEY TO FIT PEOPLE OF SHORT STATURE. CHEAPER LABOR AND CHEAPER STEEL FOR THAT IS WHERE ALL OUR STEEL IS HEADED ANYWAY.

    THE REASON THAT I TYPED THIS IN CAPS IS FOR BETTER VISION AND TO LOCATE TYPO MISTAKES.

  57. 57 Jeff Nicklus Oct 20th, 2009 at 12:46 pm

    1550tc,

    Just shows how much I don’t pay attention to what goes on, or doesn’t go on in Sturgis. HD paid the same amount to be in the parking lot as inside so they didn’t save anything. I have some pull with the Chamber in Lead, have HD give ma a call and I will hook them up in Lead and they will save a ton!

    Over & Out,

    Jeff

  58. 58 1550tc Oct 20th, 2009 at 1:41 pm

    Jeff

    HD paid the same amount to be in the parking lot as inside so they didn’t save anything

    If they did that, then they are wayway more stupier than most of us give them credit for !!!

    and in 09 what a year to be a vendor outside lol

    Jeff to be honest most vendors should have did what you did,and told sturgiswhere to go…………. that vendor space in downtown sturgis has to be the biggest rip off at any event.

  59. 59 Jeff Nicklus Oct 20th, 2009 at 3:38 pm

    1550tc,

    And that my friend is why I am Sturgis’s favorite Son …… NOT! My “Sturgis For Dummies” Series made people start to think and when I had the balls to move out and tell Sturgis to kiss my ass, so did many, many others!

    After all this is the “Black Hills Rally” not the Sturgis Rally ….. Sturgis is just a part of the big picture.

    ….and yes, HD did pay the same price …..

    Over & Out,

    Jeff

  60. 60 RevBoden Oct 21st, 2009 at 9:49 am

    Hu… Ya mean that Harley doesn’t really care about the people who bought into the “Harley lifestyle”… really. It’s amazing that once someone buys into a lifestyle they will defend the version that brought them in (no one wants to admit they got suckered). Harley is a company and not anyone’s friend. Just because you have their patch on your jacket doesn’t mean they care about you.

    They may say they care about you, want to take care of you, be there for you, but like some women… They care about money.

  61. 61 RevBoden Oct 21st, 2009 at 9:59 am

    I should add, If you as a costumer want to buy a motorcycle from someone who cares about you, buy a bike from a company or builder that will allow you to meet and have a conversation with the owner.

  62. 62 1550tc Oct 21st, 2009 at 11:47 am

    Hey RevB

    you know what they say??

    If it fucks, flyes or floats its cheaper to lease it!

  63. 63 billybob Oct 22nd, 2009 at 5:34 pm

    jeff, i know who you are. a legend in your own mind

  64. 64 Jeff Nicklus Oct 22nd, 2009 at 5:38 pm

    Billybob,

    …. and a legend in your sisters mind as well! …

    Over & Out,

    Jeff

  65. 65 Barack for Pres Oct 25th, 2009 at 3:51 pm

    The party’s over….sell your inventory before it’s worth nothing. The industry wlll only be a memory shortly.

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