Harley Davidson in trouble? Lending money to slackers?

Question

Did you see the article in Forbes on Harley? I happen to know for a fact that Harley makes a good % of their profit off of their finance group, because, lets face it, how many people pay cash for a Harley? This article basically states that Harley has been lending money to dirtbags that haven't been paying it back. It also states that HD will be further affected by the its supply inventory - bikes haven't been selling and they haven't been able to keep their inventory at the artificial low levels they typically do, so the bikes have been depreciating faster than usual. I don't believe it - as any Harley person on this site can tell you, Harley's are investments that never depreciate, and people who can't afford Harleys don't own them... what do you think?

http://www.forbes.com/markets/2007/03/14/harley-subprime-losses-markets-equity-cx_rs_0314markets33.html

Answer 1

Sounds to me like they need to scrutinize who they qualify for a loan better than they have been.
Harley Davidson is more than just a motorcycle it is an entire culture of loyalty to the design and history.
With the rip-off of the V-Twin cruiser design by the Japanese companies that are now making cheap knock-offs for cheap posers it is not really surprising that Harley sales are down.
But loyalty to the Harley tradition does have it's rewards.
With a Harley you not only get the really hot beautiful women that you just can't get with a Jap Cruiser, you also get respect from your fellow Harley riders.
Even if you are a weekend poser with a Harley you still get the respect for loyalty.
Those are the biggest advantages of owning a Harley and that is the image Harley Davidson should be promoting.

Answer 2

I think that your living in the past. That is the way that things used to be. If you can recall, say about 10 years ago, if you went into a Harley dealership and wanted to purchase a bike, you were put on a waiting list for 3,...6...maybe a year, till you got the bike that you wanted. I heard of times when you got the color that it came in or you didn't get it.
Now, go into the show rooms, and there are bikes everywhere. I recently bought a Street glide (2007, patriot edition) and from the time that I ordered it, till I actually picked it up, was under a month. And, since it was a limited edition, it had to be built from scratch, so, that is hardly a long time. Anyway, the next day, I attended the dealership's HOG chapter meeting, which was held in one of their 3 warehouses. There were at least 200 bikes in boxes, yet to be built. When I made a comment about that, the salesperson told me that these were nothing, compared to the number in the other 2 warehouses. A few days later, the York, PA plant workers went on strike. It last exactly 2 weeks. Everyone that i've talked to (I live in York, PA) that works there, be it management, workers, etc., have all said that they produce 5,000 bikes a week, and they had an inventory of 10,000 more than what they thought that they could sell. Solution? don't give the union what they wanted for two weeks...5,000 a week times 2 equals 10,000...hence no overage of bikes.
Also, go to the harley website or any dealership and you'll see hundreds of used bikes for sale. Then go to "ride-usa.com" and check out their classifieds. People are trying to sell bikes there, that are higher priced than you can get for a new bike at the showroom. Which leads to the question, why would you buy a bike with some extra chrome on it, when the dealership have them with a warranty? And less money?

Answer 3

Unfortuantely a Harley or any other motor cycle is a motor vehicle and will depreciate the same as a car or truck. Supply vs demand will determine to an extent how well any vehicle reatins its value. Harley Davidsons have an advantage as they are very popular compared to other bikes in their market so even in a slow market the impact should be much less. Lastly, the investment department at HD should have their financial assets spread out into various investment instruments. Even if their financial branch takes a hit, the company should be able to absorb the hit. Harley Davidson is not alone in this risky strategy of lending to less than prime borrowers. The markets just took a dump two days ago because the mortgage banks are in the same sinking boat. Part of it is a business venture, most of it is political pressures, which I think are wrong. HOG member since 1992.

Answer 4

Harley is not the problem. Most every financed item has been offered to people with low credit scores, big screen TVs, boats, buy now pay later, no interest until X. All non-essential products suffer during downturns. HDs bigger problem is an aging buyer market. In a few more years a good portion will them will be ready to give up riding.

Answer 5

Sure,I"ll take the bait you troll!It should be clear that virtually all Harley customers are dirtbags,just a fact.Some of these dirtbags have money,a lot don't.Being the ruthless capitalist that HD is(The only good thing about them)they will do whatever makes the most profit.A substandard bike sold for an inflated price to the uninformed consumer is a fine business plan.Combined with a steady stream of repo's to resell over and over will fatten all the stockholders nicely.Further getting the purchaser to believe the myth that they are "Investing" in a HD is brilliant strategy.Any simpleton with rudimentary math skills will quickly realize what a farce that is.Fortunately the target demographic rarely thinks that far ahead(Lemmings don't check topo maps either).The most hilarious notion is that the rest of the motorcycling world can't afford,therefore do not posses,Harleys.If that means not pissing money away on some laughable trinket to show off to the boys then I guess your right.God bless the Davidson family.True American robber barons.

Answer 6

What's the matter, William?
Did your investment depreciate while your loan payment didn't? Don't borrow.

As for me, as long as there are bikes available, there are parts to keep mine going. The more there are, the cheaper they are. Keeps me happy 'cause I'm a tight son-of-a-gun. Many times I've made my own because I didn't like either what was available, or the price.

Answer 7

Looks like the time I've been waiting for is finally coming. The rubs are losing interest. Soon there will be a pile of used HD's going for cheap. This means lots of good chopper material for us hordcores. All I can say is ABOUT TIME !!!

Answer 8

anyone that buys a bike as an investment is a moron, buy microsoft instead. harley is in trouble cuz they let anyone own one, look in the classifieds and see how many harleys are there. when they sell a bike for $350 a month for 7 years what did they expect to happen??? people buy a $18k bike, add $5k to the motor to make it run right and then throw in another $2k in chrome to make it look different just like every other harley and and when they get tired of the harley and try to sell it they wonder why they can't get their investment back....

Answer 9

Did some guy above really say, "With a Harley you not only get the really hot beautiful women that you just can't get with a Jap Cruiser, you also get respect from your fellow Harley riders."? Let me address: A) Really hot beautiful women is a matter of opinion. If you're a fan of meth-mouthed clap-traps then I'll give you that. Me, I don't care for the scrappy-ho type. B) respect from fellow Harley riders. I suppose hanging around with a bunch of other people that were as stupid as I were to buy an overpriced piece of unreliable antiquated machinery made with 45% foreign parts would provide me with the comfort I needed to not feel like a total idiot. But - to answer William - stupid people have poor credit - stupid people have more of a lemming type need to belong - stupid people will take on loans they can't afford to become part of a group that will give them "respect" and get them "hot beautiful women" (see above). Sadly, stupid people breed at a higher rate than smart people.

Answer 10

As I've stated before, HD's are not an investment. Although they hold their value well, they are still a used vehicle. If you've dumped $30K into a $15K motorcycle and can only get $15-$20K out of it, that's an investment allright...a bad one.