Wednesday, April 27, 2005

Harley Davidson's Financial Woes

Via Motorcycle Daily:
Harley-Davidson Inc. stock took its biggest hit ever today as investors reacted to the news that the company was reducing its projected 2005 earnings growth by almost half, and cutting projected 2005 shipments back to 329,000 instead of the previously projected 339,000 bikes.


The increasing mainstream popularity of "choppers" and cruiser culture over the last few years would normally be assumed to have helped Harley-Davidson, but in fact it may be just the opposite. These days, everyone with a little wrenching ability and a few catalogs is suddenly a "custom builder", and many potential buyers may be lured away from the popular Harleys when they find they can buy a "custom" personalized to their taste for nearly the same price. This problem is only exacerbated by Harley-Davidson's insistence on holding back shipments of bikes to ensure that demand exceeds supply, creating a frustrating, waiting list-style buying experience.

It seems that it's too early to begin proclaiming the "end" of Harley Davidson, but cutting earnings growth by almost half is big, bad news.

UPDATE: Travis has much more on this issue here.

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