Harley-Davidson appears to have turned the corner financially. The company seemed doomed to bankruptcy in 2008. See “Harley Is Doomed” from January 2010.
The motor company’s profits for the quarter ending with September rose 21 percent. Sales in the United States increased by 20 percent over July through September last year. Harley made a profit this summer of $162.7 million. Last year it was $134 million.
Harley dealers sold 70,517 motorcycles in the quarter – 48,529 in the United States and 21,988 overseas.
Harley is now making a company profit of $2291 per motorcycle and expects to ship about 260,000 bikes in 2013.
In a press release Keith Wandell, the chairman, president and chief executive officer, credited the company’s new Rushmore line for the company’s success. “Rider response to the 2014 motorcycles we introduced August 18 was extremely positive. In fact, initial retail sales of the new Project Rushmore motorcycles sparked the largest year-over-year new model year sales increase in two decades,” Wandell said.
Middle Aged White Men
Harley’s core demographic remains middle aged, white men. In the United States, men between the ages of 35 and 74 are ten times more likely to buy a Harley than one of the company’s competitors. In the last five years, Harley’s most robust competitor for that group of potential buyers has been Polaris Industries, a snowmobile manufacturer that also makes Victory motorcycles. Polaris recently resurrected the Indian brand.
Despite its success, Harley-Davidson is trying to change the demographic of its customer base. The Rushmore bikes are aimed at younger buyers. The company has always aimed its 883 cc Sportster model at women. This year the company is hoping to attract even more women with its 2014 Sportster Superlow model.
Harley is also trying hard to sell bikes in Asia and South America. During the third quarter sales rose ten percent in Asia and 16 percent in Latin America over a year ago.
The $18,000 average cost of a new Harley has hampered sales in South America where the average per capita income is about $9,000.