Michael Fowlkes blogged earlier about the dip in Harley-Davidson (NYSE:HOG) stock prices. Those who plan on holding this stock for the long run might want to look carefully at the product and its market demographic.In the short run, the brand should play strongly to boomers retiring with a wad of discretionary income and a taste for moderate adventure. They have the cash to pay for the top-line models such as the Road King, along with the (very pricey) Regalia.
For the following generation, however, H/D offers a weak lineup. Younger, more sport-oriented riders find nothing in the Harley dealership to compete with the race-tested (and promoted) sport bikes from Honda, Yamaha, Kawasaki and Suzuki. The Buell brand they have attempted to grow in this market sector has found no traction and remains a non-player. And the Chinese are ready to enter the market and beat the brains out of anyone competing strictly on price.
Another advantage the Japanese bring to the contest is their ability to leverage their R&D and customer loyalty from the auto side.
Market insiders will tell you that Harley's equipment, with the exception of the V-Rod, lags behind competitors such as the Honda Gold Wing in technology and comfort. What keeps them thriving is brand, and brand image is a fickle anchor for a company's future.
If they don't find products that speak to younger riders, the day may come when Harley's profits sink as low as the breasts in Daytona's Bike Week parade.
Tom Barlow is the former Membership Development Director of the American Motorcyclist Association.











Reader Comments (Page 1 of 2)
3-27-2007 @ 7:26PM
Sheldon L said...
Tom,
Do you think that women and the asian market can make up for any of the generational loss you see going forward?
Any idea what fare value for the stock might be?
3-27-2007 @ 7:30PM
Tom Barlow said...
Harley has led the pack in wooing women to their bikes, and they do have the advantage of producing cruiser-style bikes that those with shorter legs can straddle and remain upright. However, the number of women riding is still a very small part of the overall riding population.
The overseas market starts with China, and they have already forced Harley into allowing them access to their management systems in return for opening the market a little. I'm highly skeptical that American-made HD's will be allowed in quantity into China, and the company risks losing the All-American identity if they open a plant there. Someone has to absorb the 300,000+ bikes produced per year, though. Perhaps Eastern Europe and the former USSR states could be growth areas, if their economies continue to improve.
3-27-2007 @ 8:40PM
liz clare said...
Are you kidding me? What idiot wrote this article?
Harley Davidson is like moms apple pie. I would hope that americans wont settle for a japanese bike over a Harley. Harley riders are loyal to their bikes and usually know what they are talking about.
What happened to supporting America? Sheesh...Are we going to start importing apples from Japan? Theres something special about owning a Harley...
3-27-2007 @ 11:39PM
barlow.tom said...
We all once dreamed of driving a Vette. Patriotism hasn't worked well as a customer retention tool; Americans seem to prefer a better product at a better price, regardless of the origin.
And while Harley has its panache, the club is hardly exclusive; any newbie with twenty grand is welcome to join.
3-27-2007 @ 11:05PM
mike said...
Liz ... are you kidding me?!?
No serious rider under 40 would even think of owning a Harley. There are too many other bikes just simply better. Real bikers couldn't give a rats' ass if it's made in the US, Germany, Japan, or even (someday) China; We just want the best bike. It's been decades since Hardly, err I mean Harley, has been the best for anything except dentist wanting to relive something they never had.
3-28-2007 @ 6:33PM
Paul M said...
We have 2 Harleys in the family and that is the only bikes we have ridden for 30+ years now.But the brand is gettin old and so am I.Us older bikers have more time on our hands and want to ride longer and further.Harley can't keep up and will fall by the way side.The new American brand is Polaris and the Victory Vision.Harley better do something to catch up.
3-28-2007 @ 3:15PM
GARY said...
HEY GUYS,ARE YOU KIDDING ME.IM 33 AND HAVE BEEN RIDING A HARLEY FOR YEARS.ROAD KING,FATTY AND ULTRA.WHEN I WAS YOUNGER I OWNED A FEW JAP BIKES,THEY COULD NOT COMPARE TO THE HARLEY.TRY TO SELL A JAP BIKE AND LOOSE YOUR SHIRT.I NEVER LOST MONEY ON A HARLY.BY AMERICAN..
3-28-2007 @ 7:19AM
Anthony said...
You know, aging gracefully is getting harder for all of us. I spend WAY more time focused on diet and exercise than ever. I look great at 45.
What does that have to do with anything?
Harley is showing up like our fat old Aunt; the one with too much jewelry. and funny clothes; the one that tries to kiss us on the mouth! Yuck!
With hot looking, fast, and yes, less expensive rides available; Harley is showing up like a relic, a non-choice.
3-28-2007 @ 7:18AM
lisa said...
NOTHING compares to a Harley.b I wouldn't be caught dead on any other bike. True bikers ride Harleys. I want to ride, not race and I want to look good while I do it. Like Liz said, there's something special about owning a Harley. Rice rockets are a fad, Harley has been with us for 104 years and they're not going anywhere. Plus Harley riders dress better!!!!
3-28-2007 @ 7:18AM
potter said...
Hondas are made within fifty mile of my Ohio home. The cost of a loud, rough riding h/d is not worth it compared to the other cruisers available.
3-28-2007 @ 4:09AM
Chris said...
I am a motorcycle mechanic and have been for many years. I think some of the comments in here are rediculous. Especially that you are un-American unless you own a Harley. That is just plain stupidity. I have served my counry in our armed services (US ARMY) and I do not own a Harley. Are you telling me that I am un- American? I believe that the common misconception that you are not a "biker" unless you ride a harley is just pure incompetence. I have owned many bikes in my day ranging fromm superbikes to motorcross and cruisers and I believe that everyone who rides, no matter what they ride, is a biker. I personally think that we need to stop judging other people by what they ride and start paying more attention to the laws that protect riders. I am a member of the American Motorcyclist Association and they are the leader in protecting the rights of riders and the laws that protect us. Recently they published an article about how a woman in an SUV killed two people on a motorcycle and only paid a $60 ticket and $117 in court costs and that is it. I think that is a whole lot more important that who is a biker, who is american, and what brand of motorcycle you ride. We need to focus on what is more important in life than to judge other people.
3-28-2007 @ 6:35AM
Pat said...
very funny. our harley biker team will take rally next week. You can join us at lovebiker.com
3-28-2007 @ 7:52AM
mike said...
GARY said "..BY AMERICAN.."
... and I think that just about sums up everything that needs to be said about Harley.
3-28-2007 @ 9:06PM
Don Gallent said...
Ever heard of anyone tatooing "Honda" or " BMW" on their arm????
Harley Davidson is the number one brand in captivity!
They will figure out what needs to be done and do it. The loyalty of their brand is the best of any!
3-28-2007 @ 9:07PM
Tom Barlow said...
I think those Beemer riders would give you a ride for your money on product loyalty.
3-29-2007 @ 1:44AM
mike said...
Only those of us that have the "Harley" pandemic/pandemonium instilled 4there (proud Amer. etc)reasons,whatever,like,(if I have to explain it,you probably wouldn't get it).
That said,the author had some accurate point's
(he as a analyst)and stock's are a fade $wise.If HOG can't keep up w/the younger boomer's,taste's then?the fade($)may further decline.
I've only owned H.D.(my instillment's)and my 49' pan/shovel is in the barn.I will wait for HOG to get lower?then I will pounce,these guy's have been here for to long,lost it once(amf)but I have faith in there future.
3-29-2007 @ 2:01PM
Radar said...
What's killing the future for Harley is overproduction. Guys spend $35,000 for a ground up rig and clothing, then two years later, while they're still making payments, resale on that same bike is less than half its new cost. There's no waiting, no anticipation, no "newest on the block" charisma. Throttle the production line back, build in a waiting period and watch the demand rise. Then, who needs China or the USSR?
3-29-2007 @ 4:54PM
Chuck said...
Harley Davidson For Ever !!!
Purposeful bad publicity like that shown above in comments is what is bringing down the valus of Harley stock and not any real problems for the future of the company.
It is almost like there is an orchestrated effort by a few to drive down the value of HD stock by fabricating problems, so they can buy HD stock at a low price.
Harley is all about style, durability and comfort which none of the other brands can compete against. You never find a Harley in a scrap metal salvage yard where the other bike brands go to die.
As the earning and buying power of the new generation goes up they will also buy Harley's as their parents do because style, dependability and a comfortable riding position is more important than speed that causes high insurance costs.
Harleys have lasted forever while others have died or trying to copy the Harley style without success. !!!
It also sounds like the above former American Motorcycle Association employee who is bad mouthing HD is selling his past position to advertise other brands of motorcycles because everyone knows Harley has its own HOG Owners Association, which competes with the AMA and is hurting for AMA members to pay for higher saleries of AMA employes to which they would like to become accustomed.
Ignore the "nay sayers" that may have a conflict of interest and continue to buy HD/HOG stock and motorcycles.
3-29-2007 @ 7:08PM
Larry Lubell said...
http://urbaninsuranceagency.com/docs/motorcycle.pdf
Harley-Davidson's long-term prospects look just fine.
I would be more concerned about the $5,000 - $8,000 "Crotch-Rockets" that are coming out of Japan.
Yes they are popular at this moment, but there us a question if they have the staying power that Harley-Davidson does. Also as soon as the Chinese do enter the U.S. motorcycle market, it is going to be the Japanese bikes that they set their sights on.
A 20 year old buyer of a Honda CBR, or Ninja 600 might considerer switching to a bike made in China, but the buyer of a Harley would rather take the bus.
http://urbaninsuranceagency.com/blog.php?content=displayPost&article=19
3-30-2007 @ 12:59AM
ray said...
the author is probalby a short seller of the stock. I have been a dealer longer than he probably has been riding. Sounds like sour grapes and a guy who has sold the stock short. Better be careful as Harley has big plans for 08