It's better to call it now than be trying to have a clearance sale on Hogs in February.Well if so many are closing now, I can't imaging what's going to happen when winter hits.
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Policaro Harley-Davidson. Great Dealership
- Thread starter Jampy00
- Start date
Mad Mike
Well-known member
My guess is most of them are getting buyouts.
Those small town dealerships have no real business value, just the auction price for assets and some value for their service business. If HD tossed them $100k on a 30 day offer they would be nuts not to take it.
I’ll bet they make more off service and used bikes then off new HDs which the are probably going to continue.
If I owned one, I
AllistonGT
Well-known member
I live in a small town. I want none of those here.
Trials
Well-known member
Didn't they just recently replace their faded plastic sign not long ago?There goes another one...
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Probably. Just because you recently invested a million in required corporate branding doesnt mean they wont whack you.
Mad Mike
Well-known member
I think the small dealership closings are based on the success GM had doing the same a few years back. If closing a dealership simply concentrates business, it’s a smart business strategy.
May look mean spirited, but at the end of the day it will probably be good for HOGs bottom line, as it was for GM.
May look mean spirited, but at the end of the day it will probably be good for HOGs bottom line, as it was for GM.
Of course, all original parts were provided to me.
Trials
Well-known member
According to their dealership application participants are looking at a 5 year contract and there are performance goals to meet. I would imagine the ones that are closing shop have been at it for at least 5 years and under performing or defaulting on corporate loans.
I’m not sure that will be a winning combination.
Are they aiming to be similar to the stupid “Supreme” clothing line where they strictly limit supply and release “limited editions” magically turning $20 tshirts into $500+ tshirts, sometimes more on the resale market? That works on the 20-somethings, and for clothing, but will it work for the target audience of motorcyclists, and for motorcycles?
Well they have been playing a similar game with CVO for quite a while. They should have a handle on expected adoption rate. CVO is running approximately double the price of the similar base model. That's a big bump for options.
But how deep is that market with the pockets deep enough to buy them? I know a lot of Harley owners in my friends pool. A grand total of one of them owns a CVO, and I’m fairly confident (for a few reasons) that many of the non-CVO owners wouldn’t buy a CVO if they wanted a new ride and it they were presented as the only options.
Well if price is not their only obstacle, HD might be able to get away with adding 10K to everything. That way they can still get the bike they want it just costs them more. One thing that HD has going for it is their bikes are very rarely cross-shopped. If you decide you are buying a harley, you are buying a harley almost regardless of price (and the vast majority definitely don't look at comparable asian cruisers even if they were half the money).
“Regardless of price” may not necessarily be what it was even 6 months ago anymore. It could take the toy market (Motorcycles included) years to recover from Covid.
Amongst my aforementioned friends circle I also know a few who would like a Harley but just can’t afford one, even more so now that they may have suffered through a layoff, are just getting back on their feet, or don’t have that feeling of job security they might have felt in the past.
Placing them even further out of reach isn’t necessarily helpful to getting them into the ecosystem.
The idea has merit however - Apple for example is quite happy selling drastically fewer phones can its android rivals, but taking the overall lions share of profits in the mobile market. I’m just not sure that a $50K motorcycle using that tactic converts to a $1200 cellphone though.
Amongst my aforementioned friends circle I also know a few who would like a Harley but just can’t afford one, even more so now that they may have suffered through a layoff, are just getting back on their feet, or don’t have that feeling of job security they might have felt in the past.
Placing them even further out of reach isn’t necessarily helpful to getting them into the ecosystem.
The idea has merit however - Apple for example is quite happy selling drastically fewer phones can its android rivals, but taking the overall lions share of profits in the mobile market. I’m just not sure that a $50K motorcycle using that tactic converts to a $1200 cellphone though.
Mad Mike
Well-known member
My guess is they will rethink their product and pricing strategy now or very soon. IF I were at the helm, I'd do the following:
1) Skinny down the number of variants in the cruiser and touring lines
2) Reprice aggressively. They can maintain premiums on their big iron, but need to be price competitive with Rebels, Boulevards, Stars and Vulcans.
3) Buy KTM and pump those bikes into the existing HD dealer network
Sounds reasonable but I hope they don't do it. HD has a history of killing merged brands as their whole culture is setup to support one brand only while crapping on everything else. If they did it, they would probably immediately deep six husky which would be sad. KTM would then die a slow and painful death.
Mad Mike
Well-known member
Price is always an obstacle, and I'm guessing a big one for HD. You're right they may not be cross shopped, but when prices are an obstacle buyers defer their purchases or opt for another brand they can afford now, then look to the dream brand in the future.
So, is if better for HD to sell you an entry level product that's priced competitively with other brands, then sell you the dream bike later? Or let you buy the Star, Vulcan, Rebel, Boulevard now then sell you the dream bike later?
sburns
Well-known member
Honeslty most of HD's bikes are the same, there are probablly a few base chasis's and engines which make up all the line's it's kinda smart but not sure how much it costs to make all those separate addon's. Anyhow slimming it down makes some sense.
What about pricing of Indian Motorcycles, they seem to be on par with HD's?
Something like buying KTM would be a great move to diversify the business, but I believe all other brands have revenue streams outside of motorcycles, which HD doesn't, to my knowledge.
It’s an extremely large risk with that approach however – that somebody buys another brands model which is drastically more affordable and realizes after riding it for a year or two that it’s actually an awesome bike at an affordable price, has proven reliable, and is probably paid for already. Who knows, they may have a soft spot for the brand at that point, too.
At that point, unless they’re the type of person for whom brand image matters more that anything else (IE, someone who cares more of form before function), then is there really an incentive for them to switch to a potentially equal quality alternative product but at a significantly higher price?
Although gramps may have wanted to ditch the perfectly good Chevy and buy a Caddy when he got into his elder years, will that trend hold true in a likely reality of decreased disposable incomes in future generations? So we return to the “Even if they wanted to buy one, they can’t afford it” scenario?
Harley owners want a Harley price high and forget about the low models. Iphones and macs aren't cheap and Harleys shouldn't be either. Be a premium lifestyle brand and make big profit
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