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Harley Davidson incorporated celebrated their one-hundredth year in 2003 and continues to grow. From the brink of bankruptcy, to the current industry, and looking into the future, Harley Davidson has had an interesting past, present, and future. In July 8, 1986 if you had invested $100 in Harley-Davidson common stock and reinvested all dividends, the value of your investment on December 31, 2001 would have been approximately $16,630, as shown in Table 1. In fact Harley Davidson stock continues to climb regardless of the performance of the S&P 500 (Harley-Davidson.com). Harley Davidson’s future is dependent upon growth and refinement, while complacency could retard their growth and status as an iconic brand. Sales and Profits With the boom of baby boomers so has the sales revenue for Harley Davidson. In 2002 sales totaled $4.090 billion with $3.161 billion or 77.3 % of total sales coming from the sales of Harley Davidson motorcycles. Building motorcycles isn’t the only way they make money. The other $930 million comes from Parts and Accessories – 15.4 %, General Merchandise – 5.7 %, and Beull Motorcycles – 1.6 %. Parts and accessories along with the general merchandise are integral part of the Harley Davidson image. Sales revenue for the Harley Davidson Incorporated and the sales of Harley Davidson grew 20.1 % and 18.3 %, respectively. In 2002, 83.5 % of their net revenue was made in 2002. Followed by a measly 8.2 % in Europe, 3.5 % in Japan, and 3.0 % in Canada (Harley-Davidson.com). The lack of worldwide diversity of Harley Davidson is a weakness. While Haley Davidson primary focus is in the United States, other competitors such as Honda can benefit from their lack of interest in other areas in the world. Harley Davidson’s gross profit margin for 2002 was 32.04%, which has been growing the past 3 years. The gross profit of Harley Davidson in 2002 was $1.4 billion, an over 10 % increase from the $1.2 earned in 2001. The net income was $580 million up from $ 438 million equaling the 17th straight year of significant profits (marketguide.com). Since their brink of bankruptcy in the 80s, through gains in technology, productivity, and vision they have turned past weaknesses into one of their strengths. Harley Davidson has continued to grow and learn in a weak economy. Market Share Harley Davidson posted a 46.2 % share of the North American 651+CC heavyweight motorcycle market. Harley also controls 21.3 percent in the Asia / Pacific market along with 6.6 % in the European market. Honda, Harley Davidson’s closest competitor posted 20.2 %, 21.0 %, and 19.1 % in those same markets. Worldwide Harley Davidson accounted for 28.0 % of the motorcycle industry and increase from 27.1 % in 2001. Table 2 2002 Market Shares 651+CC North American European Asia / Pacific Harley-Davidson 46.4 % 6.6 % 21.3 % Honda 20.2 % 21.0 % 19.1 % Suzuki 9.9 % 14.8 % 10.1 % Yamaha 9.3 % 17.7 % 13.6 % Kawasaki 7.1 % 8.5 % 15.8 % BMW 2.5 % 15.1 % 7.3 % Other 4.6 % 16.2 % 12.8 % Figures courtesy of www.harley-davidson.com The 6.6% market share in Europe is Harley Davidson’s greatest weakness.
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