Two Brothers
Walking, Talking, and Smiling!
China no... India Yes!
Say It Ain't So
- Thread starter Geoff
- Start date
- Joined
- Apr 17, 2010
- Messages
- 125
- Location
- 112 moody drive, panama city,fl
- Bike
- 1998 CB750
- STOC #
- 7502
Move Harley production here, give me a decent paying job, and I'll buy one.... and all the gear it takes to turn myself into a card carrying member of the "pirate" faithful. Good grief......times are hard. 
Pepe'
Jabberwockey knowledgeable
Harley Davidson backfire? Noooooooooo!
Actually I have been looking at a Harley Ultra Classic. There is truth to being overinflated. Too many owners thinking that they can get more for their bikes because it has some extra farkles and a Harley badge just because it has always been that way. I have seen prices ranging from $13k for an 2008 to $20k for an 2001 with only a few minor differences. In this economy, I don't think they get it.
Baby boomers saved Harley by getting back into bikes in the 90's. Now they are getting out and the market is flooded.
Two Brothers
Walking, Talking, and Smiling!
Now thats funny.
Two Brothers
Walking, Talking, and Smiling!
Don't you guys remember when they where doing some assembly in Brazil. They have also just released the full line in India. They claim this is the next big market.
There are several options, they could easily do all the tooling and castings off shore and ship it all back to be "assembled in the US" Labour in India/China could easily offset the cost of shipping containers full of bike parts back to the US. Whether HD could survive the horrendous PR storm that would follow is another story. Interesting
Two Brothers
Walking, Talking, and Smiling!
Pepe'
Jabberwockey knowledgeable
I think what that article shows is that Harley is still stuck in the last decade and only makes changes when forced. For example: I believe Harleys would still be carburated (Japanese Mikuni)if emissions laws did not force them to step up to fuel injection (Webber Marelli Italian).
I think the V-rod (or even Buell) was a radical step for Harley, but they did not carry the ball far enough.
I think the V-rod (or even Buell) was a radical step for Harley, but they did not carry the ball far enough.
And here I thought the import tariff on Japanese bikes in 1982 was what saved Harley from going under.
Tom
Tom
draboo
SpongeBob Ogler
Quality of their motorycycles has increased resulting in market saturation. AMF should take over again.
Someone mentioned having the parts made overseas and assembled in the U.S.
Boeing tried this, and encountered a nightmare of close tolerance problems.
Someone mentioned having the parts made overseas and assembled in the U.S.
Boeing tried this, and encountered a nightmare of close tolerance problems.
draboo
SpongeBob Ogler
There are plenty of empty buildings in Flint,MI!Union may or may not factor into it, although I thought Harley was owned by the employees?
The biggest factors are: Labor cost, relocation costs, incl new building, new machinery, etc.
If they can get enough incentives to warrant building a new plant, with all new, modern high tech machinery, they could pay the same (as they do now) to about 1/2 the labour force, while improving quality and increasing output.
If I were the CEO of HD, and I was looking at reopening the Nova project (or any other line) I would send people to scout out land, laws, and equipment. While this was going on I would 'leak' that we are thinking of moving, so as to force the city and state to come up with some incentives to stay, and then I would build the new plant (take a year or 2), build a new line of bikes, while scaling down the old plant (over the next few years) .
Or something like that
Can't reduce pricing, if you're paying out the nose for your employees. The goal of every business is to turn a profit. I think one of the reasons HD's are so expensive is that they're one of the few companies trying to keep everything stateside. I've seen the dealer cost of the HD's and believe it or not, if the dealership sells the bike for exactly MSRP, they might make $1,000. That's it.Instead of focusing on reducing labor costs, perhaps the Motor Company should focus on reducing the price of their bikes! $36,500 MSRP for a CVO Ultra Classic
pretbek
Ŵΐļļ ŗĭδέ ∫ỗґ Ŧщịştịέş
Gotta love having "a guy on the inside".
And believe it or not, that surprises me, [-]HD[/-] the dealer making only $1000 on a bike sold for MSRP. HD is in deep doo-doo if their production costs are that high.
Taking a broader look for the moment ...
Everyone is talking about the decline in MC sales since the peak in 2005. However this seems to be a short sighted analysis. Look at the graph and conclusion from webbikeworld.com below ...
>>>
U.S. Motorcycle Sales 2009 and Totals for 1992 - 2009
January 22, 2010 - I updated our chart showing U.S. motorcycle sales figures, which now covers 1992 to 2009. These are gross numbers, including motorcycles (street bike, dual-sport and off-road) and scooters. The numbers were compiled from various public sources but most of the sources probably trace back to the Motorcycle Industry Council, who tracks motorcycle sales in the U.S.A.
Note, however, that if a motorcycle manufacturer isn't an MIC member, their sales may not be reflected in these numbers. But overall, this is about as good of an indication as you will find.
Note that motorcycle and scooter sales are now just about back to where they were in 1999, fully 10 years ago, a dramatic decrease by any measure.
<<<
Whilst there is a huge decline since 2005 this is the tail of a "bubble". Up to 1996 there was steady growth, around 1997/8 there was a sharp increase and THEN the decline post-2005. The bigger question is why this pattern of boom and bust? I was not riding then, does anyone know if a reason why there was a boom in 1997/8 thru 2004 ?
I checked gas prices, and they were relatively stable prior to 1997 and on the rise from 1998. This probably accounts for some of the boom, but I am not sure if it fully explains it.
It would be somewhat reasonable to conclude that the boom was in part from gas prices, and maybe other sources ? good economy - more people buying toys? baby boomers toy buying? good marketing? tax / tariff / import duty changes? Then the bust was due saturation and a worsening economy.
Now back to HD, they seem to be struggling to show the same rebound after 2009 that Japan is now showing. This may be in part due to the higher relative cost of HD bikes, or maybe an extension of the gas conscious boom pre-2005, tightening of European (and to a lesser extent the US) emissions standards, or simply HD trying to take advantage of a poor economy to put the squeeze on the unions/workforce/local govt.
Perhaps there is a different reason for ownership for HD vs. other bikes. HD's are perhaps seem more as toys or luxury items, whereas non-HD are perhaps more functional. I personally consider my ST as primary transport unless it is snowing (and sticking!). I know many other non-HD owners that see the bike the same way. This might be why HD suffers more in a downturn.
US manufacturing has been moving overseas, Detriot is the classic example where parts are now manufactured abroad, and final assembly is in the US. This is creeping into HD too. More parts are made overseas. HD is lucky that the 1994-American Automobile Labeling Act does not extend to motorcycles. It would be interesting to see what percentage was still US made. If this act was to extend to MC's it could be a serious marketing issue for HD.
Pricing interesting here too. HD's are assembled here an pay no import duty. However this is a significant cost per bike on European and Japanese manufactures. This is a huge advantage to HD profits in the US and is left over from the 80's "bail out" HD received in the form of tax legislation.
Long term it would seem HD has to reduce costs to stay competitive. Moving the plant (and cost incurred) doesn't save them that much if the majority of cost are still in the US and therefore still relatively high. Moving the plant overseas would be a marketing nightmare. So the only option is to move manufactured parts overseas and keep a minimal final assemble here. If they move I would bet the plant would be split, the final assembly staying in a cheap area of the US and everything else going to ... Mexico perhaps? China, India, Malaysia and Korea would also be options.
Can you tell I had a lot of coffee today? :coffee1:
Everyone is talking about the decline in MC sales since the peak in 2005. However this seems to be a short sighted analysis. Look at the graph and conclusion from webbikeworld.com below ...
>>>
U.S. Motorcycle Sales 2009 and Totals for 1992 - 2009
January 22, 2010 - I updated our chart showing U.S. motorcycle sales figures, which now covers 1992 to 2009. These are gross numbers, including motorcycles (street bike, dual-sport and off-road) and scooters. The numbers were compiled from various public sources but most of the sources probably trace back to the Motorcycle Industry Council, who tracks motorcycle sales in the U.S.A.
Note, however, that if a motorcycle manufacturer isn't an MIC member, their sales may not be reflected in these numbers. But overall, this is about as good of an indication as you will find.
Note that motorcycle and scooter sales are now just about back to where they were in 1999, fully 10 years ago, a dramatic decrease by any measure.
<<<
Whilst there is a huge decline since 2005 this is the tail of a "bubble". Up to 1996 there was steady growth, around 1997/8 there was a sharp increase and THEN the decline post-2005. The bigger question is why this pattern of boom and bust? I was not riding then, does anyone know if a reason why there was a boom in 1997/8 thru 2004 ?
I checked gas prices, and they were relatively stable prior to 1997 and on the rise from 1998. This probably accounts for some of the boom, but I am not sure if it fully explains it.
It would be somewhat reasonable to conclude that the boom was in part from gas prices, and maybe other sources ? good economy - more people buying toys? baby boomers toy buying? good marketing? tax / tariff / import duty changes? Then the bust was due saturation and a worsening economy.
Now back to HD, they seem to be struggling to show the same rebound after 2009 that Japan is now showing. This may be in part due to the higher relative cost of HD bikes, or maybe an extension of the gas conscious boom pre-2005, tightening of European (and to a lesser extent the US) emissions standards, or simply HD trying to take advantage of a poor economy to put the squeeze on the unions/workforce/local govt.
Perhaps there is a different reason for ownership for HD vs. other bikes. HD's are perhaps seem more as toys or luxury items, whereas non-HD are perhaps more functional. I personally consider my ST as primary transport unless it is snowing (and sticking!). I know many other non-HD owners that see the bike the same way. This might be why HD suffers more in a downturn.
US manufacturing has been moving overseas, Detriot is the classic example where parts are now manufactured abroad, and final assembly is in the US. This is creeping into HD too. More parts are made overseas. HD is lucky that the 1994-American Automobile Labeling Act does not extend to motorcycles. It would be interesting to see what percentage was still US made. If this act was to extend to MC's it could be a serious marketing issue for HD.
Pricing interesting here too. HD's are assembled here an pay no import duty. However this is a significant cost per bike on European and Japanese manufactures. This is a huge advantage to HD profits in the US and is left over from the 80's "bail out" HD received in the form of tax legislation.
Long term it would seem HD has to reduce costs to stay competitive. Moving the plant (and cost incurred) doesn't save them that much if the majority of cost are still in the US and therefore still relatively high. Moving the plant overseas would be a marketing nightmare. So the only option is to move manufactured parts overseas and keep a minimal final assemble here. If they move I would bet the plant would be split, the final assembly staying in a cheap area of the US and everything else going to ... Mexico perhaps? China, India, Malaysia and Korea would also be options.
Can you tell I had a lot of coffee today? :coffee1:
Imrubicon
Wannabe Squid
so let me get this right , their labor costs will go down but the quality of their bikes wont ?
Is that how it works ? you pay new people less and they will provide better work for less money ... Hmm bet some bigwigs get a big end of year for that thinking
Is that how it works ? you pay new people less and they will provide better work for less money ... Hmm bet some bigwigs get a big end of year for that thinking
Pepe'
Jabberwockey knowledgeable
I worked for SuzukiYamahondasaki dealer in the past. The dealer profit on the bikes was about that 10 years ago and I suspect still is.
Actually, the average (400-800cc) SuzHonKawYam has about a $600 profit right now.
Why would it backfire on HD and not the thousands of other companies who have moved to other states or even other countries. I have a Mexican Dodge.
The CVO is a special case, 883 Sportsters start around $7K, big twins at $13K and loaded touring bikes $20K. A few years ago you couldn't find a unmodified bike on the floor--they were blinged out. Now there are lots of stock bikes for sale and the touring bikes are cheaper than Wings.Instead of focusing on reducing labor costs, perhaps the Motor Company should focus on reducing the price of their bikes! $36,500 MSRP for a CVO Ultra Classic