Sturgis Rally
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Originally posted by Buck Lovell on Monday, 21 May 2012 in Buck Lovell's - American Biker Blog

Survey points to low inventory levels at Authorized Harley-Davidson dealerships

The latest Baird quarterly research survey has low inventory level stats at more that half of the authorized Harley-Davidson dealerships surveyed. The survey was conducted in May 2012 to measure mid-quarter trends. It found that demand remains up over the same period in 2011, by some 4 to 5 percent. However following the 25 percent surge in demand reported in quarter one (attributed to the early spring among other factors) Milwaukee based investment analysts Robert W. Baird & Co are pointing to "particularly lean" dealer inventory levels as likely to be holding back sales growth for some dealers. Baird's Harley-Davidson specialist Craig Kennison said that "90 percent of the dealers surveyed told us that their inventory is too low or about right. With Harley seeking to drive scarcity back into the brand, US dealer inventory is near the lowest point in a decade, ending quarter one near 54 bikes per dealer, down from a peak of 124 in 2006. "After a long and prudent de-stocking cycle, lean inventory could finally be hurting retail. We therefore remain confident that Harley will ship some 250,000 bikes in 2012". Baird say that they believe retail is on track to grow 12 percent through the first six months of the year. Commenting on the impact on price levels, Kennison says that "notably more bikes are selling at or above MSRP than below, for the first time since 2008. We are seeing dealer discounting finally abating. Dealers understand that Harley has little capacity in the timescale needed to increase production further [even if it wanted to] so they are making the most of what they have". Kennison points to the strong leadership provided by CEO Keith Wandell since his May 2009 appointment as the first 'outsider' to take the reins at The Motor Company. The steps he's taken to realign Harley's cost structure and focus on the core Harley-Davidson business, though controversial in some quarters, have worked. This replicates the turn-around success he achieved at Johnson Controls - said to have brought him to the attention of the Harley-Davidson board as they sought to respond quickly and decisively to the downturn. Baird is also pointing to the improved liquidity at Harley-Davidson Financial Services, sound brand management, and successful outreach as key to Harley's position on a moving forward basis. Though aware of market tends to overstate the risks associated with this demographic trend, since penetration growth has explained most of Harley-Davidson's recent success". Progress in previously under-performing market sectors such as young riders, women, and minorities (where Harley-Davidson has been shown to be among, if not the, fastest growing of motorcycle brands) have been a noticeable success story for Harley-Davidson. The survey also points to good news in terms of used motorcycle values and sales activity. "Dealers have reported an 8 to 10 percent increase in used bike retail". With new bike inventory being kept low, logic dictates that there will be fertile ground for Harley's used bike values to improve, but interestingly Baird are saying that there appears to be a positive and "sustainable" trend at play, with "efforts to revitalize used bike prices having stimulated demand for new bikes".

WALL OF DEATH AT THE CHIP 2012..........
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