A new Baird Survey shows that a Harley dealer had an average 41 new motorcycles in stock on their show floor in October. It compares to 67 motorcycles a year ago at the same period. Of course it’s the consequence of Harley-Davidson decision, like other motorcycle manufacturers, to cut production to avoid to flood the market during a recession and to protect the value of the brand.
Positive effect is that dealers face less financial risks managing their inventory, incurring lower interest payments and depreciation costs. Negative consequence is that some dealers are losing new motorcycle sales although some sales are transferred on pre-owned motorcycles with for consequence that used motorcycle prices are firming. Balancing production with demand is a difficult exercise, but it seems that Harley is succeeding at getting close to balance production and demand. With just enough workforce to produce its motorcycles, the flexibility of temporary workers to adjust to seasonal fluctuations, with the abandon of aggressive discounting to move both new and used bikes and consequently protecting its brand value and image, I think that Harley-Davidson is very close to start a new healthy business cycle. And of course all the after-market motorcycle industry will benefit from it. Harley-Davidson.