Harley-Davidson is a major US maker of motorcycles and seller of
heavyweight cruisers. The company offers touring and custom Harleys
through a worldwide network of more than 1,460 dealers. The company
manufactures and markets six families of motorcycles: Touring,
Dyna, Softail, Street, 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
The company operates through two segments. Its core motorcycle
manufacturing operations generate around 90% of its revenue each
year; Harley-Davidson Financial Services contributes the remainder
Harley-Davidson's Touring, Dyna, Softail, Street, 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.
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
Harley-Davidson generates 60% of its total sales from the US.
Its operations are located in the Asia/Pacific, Europe, the Middle
East, Africa, Latin America, and the US. Manufacturing and regional
offices reside in Brazil, India, Australia, New Zealand, Singapore,
and the UK.
Sales and Marketing
Harley-Davidson's motorcycles are sold to customers through a
network of independent distributors. The company spends around $130
million each year on advertising. Its products are marketed to
retail customers worldwide primarily through advertising and
promotional activities via various broadcast, print, and electronic
channels. The company targets young adults ages 18-34, women,
African-Americans and Hispanics, as well as Caucasian men ages
Harley-Davidson's revenues remained static for both 2015 and
2016, hovering around the $6 billion mark for both years. The
company's profits also fell 8% from $752 million in 2015 to $692
million in 2016. Cash flow from operations increased from $1.1
billion to $1.17 billion during that same time period due to lower
net cash outflows from wholesale lending and favorable changes in
working capital driven by a reduction in inventory.
Wholesale shipments of Harley-Davidson motorcycles were down 2%
in 2016 compared to the prior year; this was in line with a 2%
decrease in dealer retail sales of new Harley-Davidson motorcycles.
Its motorcycles segment was also affected by unfavorable
manufacturing costs and unfavorable foreign currency exchange
rates. In addition, its Financial Services segment experienced
decreased sales primarily due to a higher provision for credit
In the midst of a soft US industry driven by weak oil-dependent
region sales, Harley-Davidson is focused on growing
internationally. To support this initiative, it has two CKD
(complete knock down) assembly plants, which assemble motorcycles
from component kits produced by its US plants and by its suppliers.
Its first CKD plant is located in Brazil and has been in operation
since 1999, and its second CKD resides in India and has been in
operation since 2011.
As a primary means of growth, the company adds new dealerships
to its network each year. In 2016 it added 40 new international
dealerships, and it plans to add a total of 150 to 200 from 2016
Tapping an important new market, Harley-Davidson has introduced
its prototype Livewire electric bike and has plans to launch it to
the market within the next five years. In total, the company plans
to introduce 100 new motorcycles over the next 10 years, including
an entire range of electric vehicles.