Harley Cuts Shipments After Slow August
Harley-Davidson Inc. (H-D) has cut back production in wake of slow retail sales in August and expects its current challenges to extend into 2008.
The company reduced third-quarter production to between 86,000-88,000 units from the previously announced 91,000-95,000. As a result, H-D is expecting full-year shipments to be down approximately 6 percent compared to last year.
“The company expects its actions will result in fewer wholesale motorcycle shipments than dealer retail sales during 2007,” H-D CEO Jim Ziemer said in a press release.
H-D also reported that it will shut down five plants for a week in November and some sites will “take additional steps to achieve their production reductions.”
The sites that will close the week of Nov. 26 will include Harley-Davidson’s final assembly plants in York, Pa., and Kansas City, Mo., as well as powertrain operations in Wauwatosa, Wis., and Menomonee Falls, Wis., and Tomahawk Operations in Tomahawk, Wis.
Tim Conder, an analyst with A.G. Edwards & Sons, said the production cutback signaled Ziemer’s intention to follow through with promises made to dealers at the manufacturer’s recent dealer meeting. Conder said Ziemer told dealers that H-D would aggressively control inventories and not mirror what U.S. automakers have done, driving sales only through finance promotions, fearing this strategy would reduce resale values and dealer profitability.
In announcing the production cutback, H-D said it now expects a modest decline in year-end revenue and also reduced its possible earnings per share growth in 2008 to 4-7 percent from the 11-17 percent the company said in its second-quarter report. H-D also would not provide a 2009 outlook.
“Initial reports about our 2008 model year motorcycles from our dealers and the media have been excellent, but this is a difficult time for the U.S. consumer,” Ziemer said.
Ziemer also said U.S. dealers’ retail sales “have fallen sharply during August,” although he did not cite a specific percentage. A Banc of American Securities LLC report estimated the August retail sales drop at mid-double digits.
Ehlert Announces Partnership With IMS
Ehlert Publishing Group, parent company of Powersports Business, recently announced its two consumer all-terrain vehicle publications, ATV Magazine and ATV Sport, will be sponsoring the “ATV/Outdoor Showcase” area of the annual Cycle World International Motorcycle Shows.
Each of the 13 shows will have a special area focusing on ATVs. One of this year’s show features is the creation of “The Ultimate Sport Quad” by the editors of ATV Sport. The custom quad will consist of a Yamaha Raptor outfitted with top-of-the-line aftermarket parts and accessories. The Ultimate Sport Quad will be featured in an upcoming issue of ATV Sport and will be on display in the ATV/Outdoor Showcase area at all 13 shows. Consumers can register to win the quad on the magazine’s Web site or at the shows.
This year’s 13-show circuit, which starts in Phoenix beginning Oct. 28, is produced by Advanstar Communications.
“These are the premier motorcycle shows in the country and as Advanstar looked to expand the shows to include more ATV presence it became a perfect fit for our two leading ATV publications,” explained Dick Hendricks, Ehlert’s executive vice president.
Cycle Foundation Launches Program To Reduce Crashes
The Motorcycle Safety Foundation (MSF) released its latest public education and awareness program, Intersection, for motorists to help reduce the number of crashes that occur between motorcyclists and other vehicles, according to a MSF press release.
The program is geared to help all motorists become more informed about how to share the roads safely with motorcyclists. Dean Thompson, director of communications at the MSF, says they are aiming to create a safer rider environment.
“In the majority of crashes that involve a motorcycle and another vehicle, the other vehicle’s driver violated the motorcyclist’s right-of-way, too often with serious consequences (for the motorcyclist),” he said.
The program’s curriculum was based on input from a number of organizations, including the National Highway Traffic Safety Administration, the American Motorcyclist Association, the Motorcycle Riders Foundation and the National Safety Council.
New Harley Dealer Rides In As Long-Time Owner Sells
Bruce Rossmeyer, the owner of 11 other Harley-Davidson dealerships, including the world’s largest Harley store in Daytona, Fla., jumped at the chance to buy the oldest Harley-Davidson dealership in New England, according to the Boston Herald.
Previous owner John Atwood, whose family has owned the business since 1959, decided to sell the shop to spend more time with his kids.
New owner Rossmeyer says he hopes to triple the operation’s $20 million annual sales.
Rossmeyer plans to open satellite stores in both Faneuil Hall and Newbury Street to sell T-shirts and other Harley-Davidson gear. psB
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