American Motorcycle Dealer AMD 180 July 2014 | Page 11

Harley-Davidson dealers report slow store traffic
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believe makes full year shipment
forecasts robust.
Dealers
remain
broadly
unimpressed where promotions are
concerned with one dealer saying that
they would “like to see more co-op
dollars” and another saying that
“Harley has not been proactive
enough to help dealers sacrifice
margin to help sell bikes.”
One dealer commented that
“inventory levels of Rushmore bikes
are a bit low. We can’t get enough of
the hot selling bikes i.e. FLHTK and
FLHXS. Used bikes are down due to
lack of trade-ins and lack of new bike
sales.” However, another dealer said
that “I wouldn’t want any more
bikes as I have lived through high
demand and low inventory, and also
low demand and high inventory.
High demand and low inventory is
definitely more profitable and fun.”
In terms of new bike pricing, 57
percent are saying that they are
selling bikes below MSRP – a smaller
proportion of dealers relative to last
year, suggesting that dealers remain
confident that retail will improve,
despite a condensed selling season.
One dealer told us that there is “a
lot of competitive dealing going on”
and that it “seems like the number
one focus is on volume.” Another
said that “dealers are still giving
significant discounting” despite
market growth. Yet another dealer
told us that “dealers are taking the
hit on pricing. For the first time I’m
cancelling orders,” with another
telling us that “dealers from outside
territory are coming into other
territories and discounting hugely to
gain a sale. It is not about the
customer experience to them, it’s all
about stealing the sale at any cost.”
Finance availability continues to
ease according to survey
respondents, with the overall
consumer financing environment
remaining stable – 89 percent of
dealers report credit availability as
being less difficult or unchanged
compared to the year ago period.

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However, one dealer believes that
“HDFS is difficult to deal with.
Something [has to] change. From
underwriting to funding, they are way
behind other lenders in all categories.
H-D needs to look into a better dealer
operation system than Talon and
Connect”.
Baird recently established a HarleyDavidson Dealer Sentiment Index,
capturing both current and longer

term (3-5 year) dealer sentiment. They
asked dealers about their current
outlook 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 82 versus 70 last year. The 3-5 year
outlook remains remarkably positive
as well, as dealer sentiment is 82
versus 70 last year.

For context, sentiment readings can
range from 0-100 with 50 providing a
“neutral” outlook. Overall, Baird’s
Harley-Davidson Dealer Sentiment
Index is indicating a high level of
dealer confidence.
On average, dealers are expecting
retail sales to improve approximately
5 percent in 2014, but when asked to
rate the retail impact of the 2014
models while results for the
Rushmores were overwhelmingly
positive (13:1 love/hate ratio), retail
impact for the Street and Low
Rider/SuperLow models was more
mixed.
It would appear that whilst many
dealers are excited about the Street
models, lack of ava