Industry Slowdown Hits Harley-Davidson

By Kevin Miller

04.18.2008

Harley-Davidson announced this week that they are slowing production and laying off workers amid slowing demand for their motorcycles. Around eight percent of the company’s employees will be laid off, including about 370 unionized production workers across H-D’s production plants and 360 other workers, mostly in the company’s Milwaukee headquarters.

Production slowdowns will allow Harley to ship fewer motorcycles to dealers, which in turn will prevent stores from becoming overcrowed with motorcycles. As in the automobile industry, when inventories are high retailers often sell units at steep discounts, which lowers the value of the product. Harley-Davidson’s production slowdown will help protect the brand by keeping inventories low in order to avoid incentives or promotions to clear out unsold inventory.

While many people are downsizing their cars, or moving from cars to scooters or motorcycles to fight rising fuel costs, few people will be downsizing to a Harley, whose cycles are not inexpensive, nor are they particularly efficient compared to other motorcycles. Harley-Davidson motorcycles have become luxury purchases, high-end cycles for the well-to-do rather than motorcycles to be used simply for transportation. As such, Harley’s sales may not recover for quite some time; certainly not until the larger economy’s strength returns.

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Author: Kevin Miller

As Autosavant’s resident Swedophile, Kevin has an acute affinity for Saabs, with a mild case of Volvo-itis as well. Aside from covering most Saab-related news for Autosavant, Kevin also reviews cars and covers industry news. His “Great Drive” series, with maps and directions included, is a reader favorite.

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2 Comments

  1. Luxury purchases is right! I’m sure I read somewhere a couple of years ago that the average new-Harley buyer has a household income of over $127k.

    I guess a lot of the people I see on Harleys must buy them used because they don’t look like they come from a $127k household.

  2. Most Harley owners just take them out on the occasional weekend. It’s an effort to build up their self image to something more exciting than their real lives.

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