American Motorcycle Dealer AMD 177 April 2014 | Page 6

Continued from cover
scathing about promotional activity.
Dealers report that used bike
inventory "continues to be elevated as
poor retail coupled with weak demand
for used bikes (due to continued
consumer appetite for the Rushmore
models) has elevated inventory levels in
the off-season", according to survey
report author Craig Kennison.
One dealer explained that "Our used
bike inventory is very high due to
increased trade-ins on Project Rushmore
bikes in the Fall ... but our used bike sales
were up significantly for the first six
weeks of this year"; another that "We
need the right new inventory, i.e. touring.
Used inventory was fine and then we
sold through it, so we are light now.
There is limited promotional activity of
the Harley programs other than in store
POP.”
ne responding dealer in Australia
provided some interesting insight
into the situation there, and some of the
issues the dealer said they had with
Harley-Davidson Australia (HAD), saying
that "this is putting more and more
pressure on management to provide
these reports and we are losing focus on
the real issues like selling and promoting
our brand. Whilst I understand that we
do need some of this reporting, perhaps
this can be refined."
Further indication that, as ever,
Harley's dealers aren't a homogenous
crew, one domestic US dealer told
AMD/Baird that there are "no
promotions to drive business in the slow
months, all the weight is on the dealer,
not on Harley. In addition Harley has too
many stale models that are outdated,
over-priced, or were poor designs”; with
another stating that "We need more TV
ads just like other brands", with yet
another saying "What Harley
promotions?"
Pricing conditions remain largely
unchanged relative to prior survey results
with over half of dealers selling bikes
below MRSP (56 percent of
respondents). This is no doubt reflective
of the weather, the lag that the market
still has from slow recovery to real-world
trickle-down, and may also explain some
of the dealer scepticism raised about
promotional activity.

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"Weather has killed us, but Harley hasn't helped either"

One dealer said that "Rushmore bikes
are ok, but Dyna, Softails, and Sportsters
are way under MSRP. The reason is there
are too many, and the Softail models
compete with the Rushmore line in
price”; another that there were "Too
many car dealers coming in to the H-D
business! They don't understand the
H-D brand - they think volume-volumevolume”; a third that "Harley talks about
building brand loyalty and providing
customers with a consistent premium
customer experience, however, it is all
about moving inventory. Retailers who
discount and sell more bikes, yet short
change the customer on the Harley
experience, get kudos as they are moving
inventory.”
One Canadian dealer raised a specific
issue that affects dealers there, saying
that "Canada has a distributor, so our
prices are too high. Even H-D credit
charges are a higher rate in Canada. A
lot of people shop for P&A & GM online
with USA dealers. We cannot compete
on price.”
n terms of credit, more dealers are
reporting that consumer financing
continues to get easier, but, interestingly,
there appears to be an increasing
reluctance among consumers to take on
debt.
Baird recently established a HarleyDavidson Dealer Sentiment Index,
capturing both current and longer term
(3-5 year) dealer sentiment. We asked
dealers about their outlook currently as
well as their outlook at this time last year.
Harley dealers hold an optimistic
outlook based on current conditions, as
dealers reported sentiment levels of 78
vs. 81 last year. The 3-5 year outlook
remains remarkably positive as well, as
dealer sentiment is 81, both this year and
last year.
For context, sentiment readings can
range from 0-100, with 50 providing a
“neutral” outlook. Net, Baird’s Harley-

I

AMERICAN MOTORCYCLE DEALER - APRIL 2013

Davidson Dealer Sentiment Index
indicates a high level of dealer
confidence.
On average, dealers expect retail sales
to improve approximately 5% in 2014.
Harley-Davidson retail sales grew
4.4% in the U.S. and 4.3%
internationally in 2013, based on
company data.We expect U.S. retail sales
to grow 6% in 2014, and international
retail to grow 7% for the year.
In what maybe the first research
initiative into starting to gauge perceived
impact of the re-launch of Indian
Motorcycles on Harley dealers, now that
they have had a chance to see the new
bikes, Baird asked for views.
el