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 ...
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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.
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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: