Posts Tagged ‘Harley’

Survey: 3Q U.S. Harley Retail Sales Up 3.5%

October 3, 2011

Here is some good news for followers of Harley-Davidson: Retail sales in the third quarter were up 3.5%, compared to the 3Q last year when sales slumped 9.4%, according to a recently-completed survey of dealers by Wells Fargo Securities.

There’s more good news as well: Inventories remain at five year lows and all of the dealers described inventories as comfortable/light with a need to improve the mix such as adding more touring bikes. Inventory levels are at about 40-45 days, according to the survey.

However, dealers voiced concerns about the inventory mix and said there probably were lost sales due to lack of product availability on models such as the model year 2012 (MY12) touring, sportsters and softails. “We believe Harley underestimated U.S. summer demand, especially in touring (models),” says Tim Conder, Wells Fargo Securities senior analyst and author of the report. “It likely will be late fall before Harley has U.S. inventories normalized,” he added.

Here’s an interesting comment from Conder: “We continue to believe Harley is making specific efforts to limit some availability of Touring models, in part to encourage the dealer network to grow sales (i.e. Sportster, Dyna, Softtail) into targeted, less penetrated customer demographic segments (i.e., under 35, women, African-American, Hispanics). However, this effort may have been too aggressive when combined with York restructuring transitions.”

The survey included 40 dealers located in 24 states across the U.S., approximately, 6% of Harley’s U.S. dealers and was skewed toward larger dealers in major metropolitan areas. The survey included 10 dealers in the East,  10 in the South, 10 in the Midwest and 10 in the West.

The dealers surveyed were very aggressive in their marketing. In addition to selling new and used motorcycles, clothes, merchandise, parts, accessories and service, 98% of the participating dealers had Harley Owners Group (HOG) chapters, 55% offered rentals, 45% sponsored a Rider’s Edge training program and 33% had an on-line sales program.

The dealers also were very aggressive on their pricing. Seventy percent of the dealers sold at MSRP, 20% sold at MSRP with what Wells Fargo calls “minimal discounts,” and 10% sold at a premium to MSRP. Twenty percent of the dealers said they were selling at least some new models below MSRP, compared to 13% in the Q211 survey by Wells Fargo, and 18% in Q310.

Here are other findings from the survey:

  • The ratio of used to new bikes has improved from 2:1 to 1.75:1.
  • The price gap between used bikes and new bikes has continued to narrow. Used bike prices were stable through the 3Q after rising for much of the last 24 months, according to Conder.
  • Price discounting does not appear very likely in the near term, says Conder, “given clean dealer inventories, increased demand and management’s aggressively managing supply in line with demand.”
  • Used Harley bike prices stabilized in Q209 and have increased since then to the point where new bike demand “is positively impacted,” notes Conder. Since Q209, he says, dealers reporting flat or increasing used bike prices jumped from 25% to 88% in Q311.”
  • Prices of used Harley’s are likely to continue to increase, year over year, over the next year, Conder predicts.
  • Credit standards of Harley-Davidson Financial Services (HDFS) have remained basically stable between the second and third quarters this year, according to the dealers.

Harley common stock has traded in a range of $28-$47 over the last 52 weeks. It closed at $34.33 on Friday, Sept. 30, 2011. JD

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Harley-Davidson Forty-Eight, Coming Right Up

April 16, 2010

Just got word from the good folks over at Harley-Davidson that a loaner Forty-Eight, the latest Sportster-based bike in the Dark Customs lineup, will be coming my way next month. If you read this here, it’s pretty obvious that I’m a fan of this growing class of bikes. Low, light and quick. Good stuff all the way around.

I first got to see the Forty-Eight when it was unveiled during the International Motorcycle Shows New York stop. The most striking thing (more…)

A Saturday at Harley-Davidson of St. Augustine

January 18, 2010

Dealernews Top 100 Dealer Builds Traffic Several Ways

ST. AUGUSTINE, Fl. (Jan. 16, 2010)—Owner Clark Vitulli opens his small Harley-Davidson store here before 8 am this cool, drizzly Saturday morning, making last minute preparations for a couple of special events and the shooting of several TV commercials.

Sales of all makes of new and used motorcycles were down more than 40 percent in Florida last year, but Vitulli’s operation bettered that sad figure; his sales were off by less than 30 percent. The operation generated revenues of nearly $10 million last year. One reason for his success is that he worked hard on promoting the store and giving prospects many opportunities to visit his 16,000 sq. ft. facility. It has a 9,000 sq. ft showroom and a 7,000 sq. ft. service department with 10 service bays that is completely air conditioned with an AC duct in each bay. There are 20 full-time and part-time employees.

There’s a picnic area and a band shell for live music every weekend. There’s also a shuttle bus running to the huge outlet mall nearby.

Clark Vitulli

Today, the store is promoting a 9 am blood drive, followed by the monthly meeting of the store’s HOG group. After the meeting, the film crew will move in to shoot footage for a series of 30-second TV commercials featuring customer testimonials. The shoot will last a couple of hours. After that, traffic should slow down this afternoon.

While it seems a bit crazy here, it’s a typical Saturday for the store.

The dealership also operates a tiny retail satellite operation (Harley calls it an Alternate Retail Outlet – ARO) a few miles away in St. Augustine’s Old Town, the center of this delightful historic tourist attraction. St. Augustine is the oldest city in the United States, older than Jamestown by 42 years, in fact. It was founded in 1565, 55 years before the Pilgrims landed at Plymouth Rock. Vitulli and his business partner, Allen Good, opened the small 1,500 sq. ft. store to sell apparel and accessories in December, 2009. It’s in the high rent district of splashy retail shops on St. George Street, the main tourist venue, but with the high pedestrian traffic, it generates sales of about $200/sq ft and helps drive riders to the main store located on the edge of town, just off I-95.

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Now For Some Dealer News

November 26, 2008

wilwert1

Wilwert’s, Inc., a Harley-Davidson, Buell, KTM and Suzuki dealership in Dubuque, Iowa, is preparing to close its doors due to foreclosure. A sign on the dealership’s showroom window informed customers of the closing.
The Dubuque County Sheriff’s Department says the building will be made available for public auction on Jan. 15, 2009. A sale notice says the Dubuque-based American Trust and Savings Bank, the Wilwert’s lender, recently was awarded a judgment of $1.6 million. The 53,000 sq. ft. Dubuque location was opened in April 2003.
Owned by Clay and Janelle Wilwert, the dealership is a family-run business, opened by Clay’s parents in September 1960 as a Harley-Davidson retailer. Since then, the store has relocated five times and added KTM and Suzuki brands.
Wilwert’s, Inc. had 40 employees at one time, but is now down to 16 in an effort to cut costs and remain open.
The Dubuque County Assessor’s Office this year valued the building at $2,011,200 and the parcel’s 6.78 acres of land at $335,800. Records show Wilwert was current on his property taxes, last paying $40,315 on Sept. 6. His next payment of the same amount would be due March 2009.
In 1999, Wilwert’s opened a second location 15 miles away from Dubuque in Galena, Ill. The 6,000 sq. ft. Galena store carries only Harley-Davidson and Buell. The Galena store also will close because Harley-Davidson considers it an extension of the main store and Motor Co. by-laws prohibit branch stores from remaining open if the main dealership is closed.
Wilwert’s is only one of multiple long-time H-D dealerships to close in November. Santa Cruz Harley-Davidson owner Mike James closed his dealership earlier this month, ending Harley-Davidson’s 80-year run in the city.
Citing poor motorcycle sales due to a struggling economy, James shut his dealership and museum Nov. 11. The dealership’s satellite shop in Watsonville closed earlier this year.
“The simple answer is we’re a victim of what’s happened to consumer confidence,” James told the Santa Cruz Sentinel. Though other areas of the dealership were doing fine, bike sales at the Santa Cruz dealership had fallen from an average of 50 per month to 15 in October, James said.
In Wisconsin, River Falls Harley-Davidson closed its doors on Nov. 1.