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Posts Tagged ‘MV Agusta Group’

Ice Racing -- Franky Zorn

Yes, it’s been ten years!

Magazines and newspapers with decade-ending rankings have started to appear.

Over the next month, we’re going to be deluged with statistics.  Telling us who the winners were.  People who provided fodder for the system, that you consumed, and forgot.  Best movies, best athlete, best TV shows, best songs, best companies etc.  So, I thought it would be good to go back and compile highlights on the Harley-Davidson decade.

It wasn’t all good news—marked by the roughest economy since the Great Depression.  In pulling together the data I was reminded of a song by James McMurtry’s “We Can’t Make It Here”.  It’s a favorite and one I would vote as the “best” song of the twenty first century, yet it never seems to get air play.  But, this isn’t a rant about how they killed radio and now have us anesthetized in front of the flat screen, selling us products we don’t need, that we put on credit cards that charge 29%.  Sure, McMurtry’s lyrics are poignant, but there’s a hypnotic groove that hooks the listener.  It makes me want to play the song again and again.  But, I’ve moved a little off topic… here is a look back:

2000 — The Softail Deuce is introduced.  All 2000 Softail models have the Twin Cam 88B engine, a counter-balanced version of the Twin Cam 88.

2001 — The V-Rod is introduced for the 2002 model year. Inspired by the VR-1000 racing motorcycle, the V-Rod is H-D’s first motorcycle to combine fuel injection, overhead cams and liquid cooling.  It delivered 115 horsepower.

2002 — The all-new Buell Firebolt is launched.

2003 — Buell launches the Lightning XB9S.  More than 250,000 people come to Milwaukee for the final stop of the Open Road Tour and the H-D 100th Anniversary Celebration.

2004 – The Sportster family models receive rubber engine mounting, a new frame, and a wider rear tire. The Road King Custom is introduced with a low rear suspension and wide handlebars it brings a beach cruiser look to a classic motorcycle.

2005 — The XL 883L Sportster 883 Low brings a lowered seating position to the Sportster line.  H-D and the Muscular Dystrophy Association (MDA) mark the 25th anniversary of their partnership.

2006 — The first of the 6-speed transmissions are made available on 2006 model year Dyna motorcycles. The 2006 model year includes the all-new Street Glide, a lower profile touring motorcycle. H-D appoints Beijing Feng Huo Lun (FHL) as the first authorized H-D dealer on mainland China.

2007 — Union rejected a proposed new collective bargaining agreement for employees and went on a strike at its final assembly operations in York, Pa.  H-D launch the Sportster XL 1200N Nightster. The H-D Foundation and the Disabled American Veterans (DAV) Mobile Service Offices (MSOs) launched the Harley’s Heroes Tour.  H-D celebrated 100 years of Police Motorcycle Sales.

2008 – H-D teamed up with the Ultimate Fighting Championship (UFC).  H-D holds its 105th Anniversary Celebration and the H.O.G. 25th Anniversary.  H.O.G. launched the Million Mile Monday ride. A H-D Softail stars in the new Indiana Jones movie. H-D acquires MV Agusta Group expanding presence in Europe.  The H-D museum opens to the public. H-D introduces the 2009 Tri Glide Ultra Classic motorcycle (3-wheel).  For 2009 touring models H-D introduces the all-new frame, swingarm, engine mounting system, wheels and tires and new chassis.   The H-D XR1200 is launched in the U.S.

2009 — CEO James Ziemer retires and is replaced by Keith Wandell. H-D reports decreased revenue, net income and diluted earnings per share and provides a new strategy and restructuring update. Buell named Official Pace and Safety Bikes of AMA Pro Road Racing. H.O.G. set a 5 Million Mile Monday goal, but falls just short of the goal. H-D launched the Ride Free II Guarantee program.  H-D rolls out nine new motorcycle models for 2010 across six model platforms. H-D formally enters the motorcycle market in India. H-D unveils long-term business strategy after poor Q3 revenue and announced the discontinue of its Buell product line and plans to divest its MV Agusta unit.  Erik Buell leaves the company to establish Erik Buell Racing.  H-D announced it will keep its motorcycle operations in York, Pa., that includes a restructuring plan which eliminates almost 50% of the workforce.

H-D Revenue: 2000 = $2.24 Billion (2000 was the 15th consecutive year of record revenue); **2009 = $4.08 Billion (back-to-back yearly declines — in ’06 revenue = $4.55B)

H-D U.S. & Canada Market Share (651+cc): 2000 = 45.9%; **2009 = 45%

H-D Gender:  2000 = Male (90%); Female (10%); **2009 = Male (89%); Female (11%)

H-D Median Age: 2000 = 44.2; **2009 = 48.1

H.O.G. Membership: 2000 = 582,400; **2009 = 1.3 Million

Unit Shipments: 2000 = 204,592; **2009 = 225,000

(** indicates estimates as final results not tabulated/reported and subject to change)

From record revenue and income to record downsizing and decline.  I didn’t mean to get you reaching for the Prozac, but it’s not all that bad.  Just like ice racing in winter months can be slippery with the occasional crash, H-D will continue to modify, adapt and adjust to come out on top.

Photo courtesy of Rutger Pauw;  Statistical Sources: H-D; H-D Investor; Google Finance and various analyst estimates.

All Rights Reserved © Northwest Harley Blog
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amc-hdAnyone can purchase Harley-Davidson industry reports which discuss motorcycle demand and forecasts.  Topics often include market size, product segmentation, technology trends, environmental and regulatory factors, trade, market environment, product forecasts and the like.

Or you can wait and watch your inbox as the news or sales promotions roll in for an indicator on the state of the state.  Statistically motorcycle sales are way off.  Tell me something we don’t already know!  Yet adding to this drum beat was the announcement and regulatory filing from Harley last week that worldwide sales by its dealers fell 13% in the first two months of the year, a clear sign that the recession continues.  In the U.S., which represent nearly two-thirds of the company’s business, sales were down 9.4% and international sales were down 21.5% compared with 2008.  All this after the “We Ride Free” campaign where its message is: trade up!

The latest Harley deal to arrive in my inbox was from American Motorcycle Classics (Albany, Or.).  It’s a $3679.00 discount on a 2009 FXDFSE CVO Dyna Fat Bob.  Does that pull on your heart-wallet string?  I’m not so sure!  Because $22K is still a lot of coin in this time when so many are in dire need of cash.  The 90% of the population who are employed and can afford it know the value of money in these dicey times and those who don’t are unlikely to qualify for a loan.

HOG

HOG

Maybe Harley-Davidson should consider the possibility of selling off some of their brands?  The Buell and MV Agusta Group would be likely candidates for the “selling block” and might help restore the company or remove massive debt loads?  Just a short seven months ago Harley paid $109 Million for the Italian motorcycle maker to increase its presence in Europe.  This was somewhat logical back when stock was in the mid-$40’s and sales in the European market were increasing 16%-20% every quarter, but clearly HOG shareholders would like a “do-over” as sales are in the tank and the stock has now closed below $8 a share!  It’s interesting that Harley exec’s got this deal through the board at a time when Harley’s 2008 sales were down more than 7% and after a 5.3% drop in 2007.

Now the trouble is, does anyone have interest in Harley – or the equity – to make a deal?  That doesn’t bode well for the company unless they are looking at efforts to turn themselves around with the help of taxpayer cash?  Think about it: well-financed Asian motorcycle companies like Honda (NYSE: HMC) or Tata Motors Ltd. (NYSE: TTM) could pull the Harley nameplates off the scrap heap for next to nothing — without having to take on burdens like massive debt loads or union pension obligations. But even they are not willing to because they don’t think they can make money with it.

Yet, somehow we’re supposed to look the other way after reviewing Harley’s dreadful balance sheet and debt situation and continue to believe those same managerial geniuses will turn around the brands without shedding their massive debt obligations?

It just doesn’t make any sense at all.

Photo courtesy AMC

Disclosure: Author has no ownership in HOG.

All Rights Reserved © Northwest Harley Blog

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turkeysWith Thanksgiving fast approaching, and everyone’s thoughts turning to the big feast, I decided to look at some of Harley-Davidson’s turkeys that made news in 2008–albeit for the wrong reason in my opinion. 

It’s never nice to point out the flaws in plans, products or ad schemes if they are questionable, failed or are in the process of going downhill, but it would also be irresponsible to simply just forget the follies of some of Harley’s bigger turkeys.

Click through the list to get a juicy taste of these ’08 Turkeys:

  1. Hired Hip-Hop Artist Run DMC For Judges At HD “Hot Model” Contest
  2. We Don’t Do Fear Ad Campaign
  3. Headcount Reductions Announced Q1
  4. HD Stars in Indiana Jones Movie
  5. Mv Augusta Group Purchase
  6. HD States Obvious Market Declines In Q2 Results
  7. HD Announces Tri Glide Ultra Classic and Ford Announced “Big Hog Daddy” Hauler
  8. Sex Sells – Ad Campaign with Marisa Miller
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It’s not a good day to be a Harley-Davidson (NYSE: HOG) dealer.  The company reported that Q3 profits fell sharply and they tried to reassure investors that company management is taking prudent steps to manage the brand.  They also cut earnings outlook and lowered the estimate for motorcycle shipments for the rest of the year.

Harley reported that earnings for Q3 dropped 37% to $166.5M from $265M as compared to Q3 of 2007.  This is the fifth straight decline in quarterly earnings for Harley.  Revenue fell 8% to $1.42B from 1.54B in 2007.  Shipments of motorcycles fell 14% to 75,704 although they did report that international shipments were slightly up.  Dealer retail sales fell 10% this quarter as purchases of high-end motorcycles are often tied to consumer confidence and the credit market squeeze has compounded the problems.

Speaking of credit, the Financial Services segment of the company reported higher delinquency rates this quarter, a 28% decline in operating income and having to raise interest rates for all potential customers.

In a downturn climate Harley acquired MV Augsta Group, expanded on European operations, opened the new museum, rolled out MySpace and Facebook sites and hosted the 105th celebration all during this quarter.  So, given the daily doses of financial doom and credit circumstances Harley seems to be doing “okay” in trying to weather this slowdown.

Call transcript is HERE.

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