"Put your a** on some class," reads one (not necessarily official)
Harley-Davidson T-shirt. Harley-Davidson is a major US maker
of motorcycles and the nation's #1 seller of heavyweight cruisers.
The company offers touring and custom Harleys through a
worldwide network of more than 1,300 dealers. The company
manufactures and markets five families of motorcycles:
Touring, Dyna, Softail, Sportster, and V-Rod. It also makes
three-wheeled motorcycles. Harley-Davidson sells attitude with
its brand-name products, which include a line of clothing and
accessories (MotorClothes). Harley-Davidson Financial Services
(HDFS) offers financing to dealers and consumers in the US and
Year-over-year 2011 revenue rose 9%. By segment, motorcycles and
related products, accounting for 88% of sales, enjoyed an
uptick in revenue of 11%. Good results for the motorcycle segment
were supported by a number of factors, including a 10% increase
in wholesale shipments, higher wholesale prices, favorable
foreign exchange rates, and lower manufacturing costs after
restructuring. In 2011 retail sales of motorcycles rose about
6% both in the US and internationally.
HDFS's year-over-year 2011 revenue declined about 5% owing
partly to a drop in interest income. HDFS generates about 12% of
revenues and provides financing for new motorcycle buyers
-- typically more than 50% of all purchases. While HDFS
provides service in the US and Canada, dealers and customers
outside North America may receive financing from companies
that have licensing or branding agreements with
Harley-Davidson's Touring, Dyna, Softail, and Sportster are
equipped with air-cooled, twin-cylinder engines (in a 45-degree "V"
configuration), while its V-Rod sports a 60-degree "V"
configuration twin-cylinder engine that is liquid
cooled. Harley-Davidson introduced three new models for 2011,
including the SuperLow, XR1200X, and a CVO (Custom Vehicle
Operations) model -- the Road Glide Ultra. The company also
makes special editions for peace officers and firefighters. Its
products and related lifestyle are supported by H.O.G. (Harley
Owners Group). Harley also supports a rental and tour program
market, and a rider training program known as Riders Edge.
Harley-Davidson commands a 55% or so market share of
heavyweight motorcycles in the US, but only about 13% in
Europe. Significant non-US markets include Australia, Canada, and
Japan. While Harley-Davidson closed about 20 US dealers in
2011, it is intent on expanding its international dealer network by
100 to 150 through 2014. The company began assembling
motorcycles in India (with parts manufactured in the US) to
support that goal. International sales account for about 32% of
revenue for the motorcycle segment.
To create savings in its operations, Harley-Davidson is at work
on a major restructuring effort through 2013. Completed projects
for the effort have included the consolidation of
manufacturing operations onto a single production line in
York, Pennsylvania, the consolidation of Wisconsin powertrain
locations into one site, and more flexible union contracts at US
manufacturing facilities. A project in progress is the outsourcing
of wheel and wheel manufacturing slated for completion in 2013.
That effort will include the closing of Harley-Davidson's
Australian subsidiary in New Castalloy.
In 2011 Harley-Davidson also launched a strategy to focus
its research and development efforts on more timely
introductions of products that meet the diverse needs of its
growing customer base. The strategy includes enhancing R&D
methods and organization to cultivate more flexibility and input
from the consumer. The company spent more than $145 million on
R&D in 2011.
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