The Dog Days of Summer and Dealer Arrogance End

I’m not one to gloat, but I’m happy that the runaway freight train of motorcycle sales has finally slowed. During the last 10 years, sales of Harley-Davidsons have roared along with double-digit annual increases, defying nationwide economic slowdowns and stock market dips.

Harley has made butt loads of money as the rise in popularity of motorcycles went mainstream in the 1990s.

But wait, for the first 6 months of this year, sales of Harley were actually — GASP – down! Sure it was only 1.2% worldwide and sales in Europe were up 17%, offsetting a 5% drop in U.S. sales. Sales of all street bikes nationwide were off 5% for the first 6 months of 2007, with 389,765 units sold, compared to 410,421 sold during the first 6 months of 2006.

Well I for one am tired of dealership arrogance. It’s not just local dealers in the NW, but you “feel” it from Rapid City to Reno. Dealers have this attitude that Harley growth rates would defy logic, continue forever and demand could never catch up…the words “market saturation” and MSRP were not in the sales vocabulary! For the first time though I’m hearing “We see the market’s changing a little. We have to be more aggressive.” That’s music to my ears. You’d think Harley’s are made out of solid Palladium given the prices the dealer’s demand and I hope the sales decline makes them a bit more humble and focused on customer relationships.

The sub-prime market has created economic worries, and high fuel prices always create issues, but dealers are seeing an increase in sales of big touring bikes. Touring models, which at least partly accounts for Harley’s continued increase in revenue (4 percent up for the first six months of 2007), despite the flat to slightly down numbers sold. It seems the graying of America crowd are buying those $23,000 Ultra (Electra Glide) rather than the $15,000 Dyna Low Rider.