I don't normally watch the stock of Harley Davidson Inc. (NYSE: HOG). Lately though, I've had a look at how it's doing and things look pretty ugly right about now. Value investors might be tempted to buy in or to build on an existing position at this time, and that may be a good choice, but as far as a seasonal investment, this year HOG may be scheduled for intake to the slaughter house. In the face of a worsening economy and a kaleidoscope of consumer credit woes, that big bike maker probably won't be faring so well. It's my opinion that domestically, Harley Davidson is going to become it's own largest competitor, at least in the near term. For the last 20 years, buying a Harley has been a purchase of status far more than an expenditure of need. As much as 85% of the Harley Davidson fleet has been purchased by pleasure riders rather than commuters or hard-core biker types. This reality puts those classy machines into the realm of consumer toys rather than consumer needs. Add to this the fact that Harley riders are getting older. They say: If you won't be able to pick up your bike when you lay it down, it's time to give up the ride.
My point here is that more and more Harley Davidson motorcycles are entering the secondary phase of their life cycles. First phase owners are beginning to sell off their bikes. I noticed the increase of used Harleys for sale beginning two years ago, and last year I noticed the start of a very slight decline in asking prices. This does spell good news if you're in the market for one, and if that's the case, I envy you. However, this signals tougher marketing domestically for that classic American icon, hence the Harley Davidson push into India and China.











Reader Comments (Page 1 of 12)
2-29-2008 @ 2:05PM
mike said...
Buy victory. the hammer has 1634 cc's, 6 speeds. Besides harley could use some competition.
2-29-2008 @ 2:06PM
mj said...
Most HD's today are purchased by boomers who think that by owning a Harley, they are bikers. This isn't true at all. They are Rubbies to the real biker. I do think HD is catering to them way too much, with all the tie ins available. Even AVON sells Harley products! (I know, I'm a rep).
2-29-2008 @ 2:13PM
billy said...
Harley's are wayyyyy over priced compared to the japaneese bikes. The japaneese bike last longer and are much more reliable.
2-29-2008 @ 2:15PM
Heather said...
In 2003, I met a former CEO of HD, and I told him then that I thought the company was setting itself up for failure. They have turned on their core constituency--the hard core biker-- and instead catered to yuppies who ride recreationally if at all. As finances get tighter, all those garage-kept bikes with less than 500 miles on them will flood the market, pushing demand for new bikes way down. The increased inventory will force lower prices on the new bikes. And in the meantime, many old HD loyalists have turned to custom built bikes because they feel that HD turned its back on them in favor of "fake" bikers. I don't think those riders will come back to HD.
2-29-2008 @ 2:17PM
Joe said...
Harley makes agood bike, but the metrics are cathing up. I had Harley's in the past, last two bikes have been Yamahas'. latest is a 1900 cc Raider S that Harley can't come within $7,000.00 for a comparable bike.
2-29-2008 @ 2:17PM
Janet said...
They say: If you won't be able to pick up your bike when you lay it down, it's time to give up the ride.
Let's look at that comment.They never road a Hog or Big Bike age has nothing to do with lifting a dropped bike,a 20 year old is not going to lift a downed bike alone. Who is they? Definetly not an experienced rider which with age come more experience and if you are dropping your bike you need to walk !!!
2-29-2008 @ 2:19PM
Jc said...
Harleys are the ultimate motorcycle and the ultimate American Icon...
Over the past 20 years I have owned several motorcycles of different brands and styles, all good motorcycles.
Anyone who knocks a Harley...hasn't ridden one or has not been riding very long. The fact that every company wants to sell Harley branded merchandise is a testament to the popularity of the brand name.
Give me my Harley and let me ride....
2-29-2008 @ 2:23PM
Bob Wong said...
Love my Sprotster!!!!!!!!!!!!!!!!!!!!!
2-29-2008 @ 2:28PM
Evol-Twin said...
There are only two kinds of people that own Harley's, white trash and wealthy people that want to pretend that they are white trash. Wouldn't getting a mullet be a cheaper way of showing off your white trash pride then spending all that money on a motorcycle that goes " potato, potato, potato, misfire, potato, potato, potato, misfire. Plus you still have to buy all of the Harley costume stuff like the bandana to hide the balding head and the xxx-L shirt to go over the beer belly.
2-29-2008 @ 2:32PM
John said...
Want a jap bike. go to Asia and work there it is a package deal. sure jap bikes will be cheaper. so was cotton when slaves picked it. Abe lincoln is rolling in his grave. Who will buy harleys in Asia? you dont buy much bike jap or American on their saleries. My answear close our shores to imports untill they learn free trade. Compete on terms that support America and the american life style. Or we will lose our life style and be like Asia and not buy harlies , or anything bigger than a moped. China has almost 5 times the population we have. They contribute nothing to us they dont buy our products or theirs. They are not a trading partner. It is one sided ..
2-29-2008 @ 2:36PM
Karen A said...
We bought our 1st Harley in May 2007....we have not stopped riding yet and we wouldn't have any other....We just rolled 13,000 miles on it, yes, I said "thirteen thousand"!!!
2-29-2008 @ 2:44PM
harry wayne said...
The market is about to be loaded with used low milage bikes by this summer.I agree with janet ,if you think one person can pick up a BIG BIKE ,you do need to walk.With experince you won't need to pick it up.
2-29-2008 @ 2:45PM
lilcanoli said...
To Janet.. You are clearly not a Harley Rider. Laying your bike down is sometimes a necessary due to drivers(cars) on the raod who can't calculate how close they really come to you when they cut us off! Stupid drivers(cars) forget that we are allowed on the road too! Also i aggree that Harley has pushed us(the real bikers) a bit out in the outfield and wants to sell to those pencil pushing yuppies who don't even know how to change their own Hog's oil! But I will remain a Harley chick, the product still prevails!
2-29-2008 @ 2:48PM
Leno said...
I don't ride, but the Harley looks and sounds better than any Jap bike. They definitely need to bring their prices down. I think that people who own Jap bikes either can't afford a Harley or they have homosexual tendencies.
2-29-2008 @ 2:50PM
Bama said...
#4 Heather got it Right.
2-29-2008 @ 2:50PM
Andy said...
I'm still not sure what a REAL biker is. Some one who rides every day? Some one who's in a club? I thought it was someone who likes to ride motorcycles. I do think Harley is catering to people .People that like to ride no matter what other people think.
2-29-2008 @ 2:51PM
lilcanoli said...
to evol-twin..i am white trash.. one of my stickers on my helmet says so! And i am wealthy, and educated as well. And my custom softtail is way white trash with all kinds of skulls and flames and chrome..Not really nice what you said, but it is funny, i can take it! Maybe you might not want to break down in your yuppie car in front of one of the biker bars.....mmmm, cat got your tongue now?
2-29-2008 @ 2:56PM
drser93 said...
come on folks... since the 100th year annivercery all the jump on a new craze people have found something new to spend there money on. besides soon as the rubs found out it took more than clothes and bike and boots with the nameon it to be a biker ....they couldn't handle the load. instead of bar hopp'in try iron butt'in my personal record 1368 miles in 24 straight i have also a 1238 and 2/750s and numerous350-450 day rides no bars for me, like i tell my grandkids you can't buy kool you is or you ain't!!!!
2-29-2008 @ 3:08PM
ted said...
I once was interviewed for a reliability engineering position at a companjy in Wisconsin. The VP of Marketing asked me about the reliability of Harleys. I gave him my honest answer. They are really crap and break down all the time.
I didn't get the job. Later I learned that the VP had a hog.
2-29-2008 @ 3:13PM
rich said...
I'll know metrics are more popular than Harley when I start seeing people with Honda tatooed on their forehead.