Harley Davidson is in some financial trouble. You have heard of the Sub Prime home loan in the USA, well Harley have a longer history of Sub Prime lending.
This has come about from being a bit one dimensional. They have no shortage of demand for their motorcycles however their prime market is still people who often can ill afford their motorcycles. So HD finance ends up with a high percentage of defaults.
How much? Well reports are they have borrowed 1.9 billion dollars to keep things rolling for the short term and 1 billion of that is at a whopping 15% interest.
And so whilst Buell runs at a profit HD have decided to axe the brand which they have owned 100% for some time as well as offloading MV Agusta which they purchased last year in hope of a quick fix. Wall street boosted their stocks about $4 yesterday or so I read, that in itself may be of some short term assistance.
Longer term I don't see how HD will be able to climb out of the hole they have dug themselves into. The problem IMO is they refuse to move beyond their existing market and produce models for other types of buyers. In fact they just stated their plan to get out of trouble is to simply lever their existing market with new models and accessories.
The existing core buyer already has every HD accessory he can afford and a HD tattoo on his arm - I don't think there is much more to lever. So while they will continue to move bikes off the floor, without anything to attract new riders I don't know how they can exit their current mess. I had never been into a HD dealership before I went to look at a Buell. During my visits with the last Buell and my current one some interest in the HD range had started to develop.
Alas it is a shame that the small boutique size Buell Motorcycle Company who worked so hard to build just a limited number of unique motorcycles with rich character is no more.
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