Enough About H-D, What About the Other Guys?

Alright, far from just picking on the corporate talking heads at Harley-Davidson, I figured I’d pick on a few of the other big companies that build big cruisers overseas. I’m not talking about small shops that are just really just one-offs of Harley and their overall production and market saturation is really dependent on Harley to set the bar. No, I’m talking the bigger players in the market.

Polaris, who owns Victory and Indian is doing a nice job, but they are limited in scope because they are only selling in North America. On the other hand, they delivered something approaching 17,000 Harley look-alikes last year – nothing to sneeze at, especially when you consider the price point they sell at is generally lower than H-D.

Worldwide? Let’s start with Honda. Internationally, they total sales from 2016 compared to the same time last year? Down less than 500 bikes. In 2015, the last year (obviously) that cumulative data was available saw Honda up 9.4% in North America and double digit gains in Asia and Europe. They may build ugly bikes, but they obviously know how to sell them.

BMW is still sucking wind after their 2008 meltdown and higher end brands that actually go fast, like Ducati, are stealing market share in the European homeland. BMW’s quality has sucked for a long time (and is, fractionally, worse than Harley’s) and the high price of replacement parts and extremely expensive factory-trained labor has stymied the brand around the world. The result? BMW sells enough cars to continue to weather the storm if their bikes struggle.

Enough about H-D What about the Other Guys

Yamaha is still out there, along with Kawasaki, and you have to add them together with Honda to scrape past Harley’s North American market share (35%). The one thing that these guys have going for them? They are more than motorcycle companies. Collectively, they build everything. That gives them R and D budgets, discretionary budgets for market study, and advertising. Harley Davidson? They’ve got brand down pat, but they have to constantly try to keep up with innovations that cost in a market that thrives on “throw away” marketing. Let’s face it, people don’t work on things anymore, they just buy another one. When was the last time you saw a television repair shop? Let’s face it, we live in a world that says “don’t repair it, just trade it in.”

…And that’s the real problem for Harley, I think. They’ve made their bones by building stuff that the average guy could fix. (Especially if you had a panhead – that meant “had to fix”.) I mean, nobody collects 1970’s Honda bikes. If we look at consumer goods manufacture worldwide, quality is still pretty high.

The downside is that the costs of good materials continues to climb and the buyer’s willingness to spend is often dictated by the final price. If price point is an issue, then the only way to lower an item’s overall cost is by cutting the labor budget. Guess who costs more – an item made by organized labor in the US or by a free market, non-union shop? I hope that Harley can reach a younger market that is willing to pay more for better quality, but I thought that about many companies (and buyers) many times over the years. Unfortunately, I think too many people want cheap stuff that is “almost as good” versus the real thing. If that trend continues, we will see the end of Harley as a major company in the years to come.

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