Harley Davidson

The purpose of this industry analysis is to develop understanding for Harley Davidson Inc. and the employee owned manufacturer of heavyweight motorcycles. We will focus on some of the distributing of products to domestic and international markets targeting men and women of all ages.

The motorcycle industry is made up of five major manufacturers: four Japanese (Honda, Yamaha, Kawasaki, Suzuki), one American (Harley Davidson) and some European companies (mainly BMW of Germany and some other Italian companies). Most companies market their motorcycles and accessories on a worldwide basis. Industry sales of motorcycles were shrinking in the early l990s because of the recession.

Three types of products/services are being offered motorcycles, accessories, and financing services.

Motorcycles: This is a loose term for some, however we are going to look at that would include motorcycles. Mopeds or scooters (with engines under 125ccwhich are used as an alternative to walking), accounting for about 17% of total motorcycle sales; lightweight motorcycles road bikes, dirt bikes, dual purpose bikes (with engines ranging from 125cc to 499cc), accounting for 51% of sales; sport motorcycles street bikes, and super bikes (with engines ranging from 450 to 749cc) accounting for 13% of sales; heavyweight motorcycles cruisers, touring bikes (ranging from 750cc to 1500cc) accounting for 19% of sales.

Accessories: all leading manufacturers produce Aftermarket accessories, such as saddlebags, windshields, custom seats, helmets, and clothing items. Accessories can bring in a large amount of profit but they can also strengthen customer relations and customer loyalty. In order to succeed companies need to do a market analysis of what sales and what the customer base requests.

Sales of accessories and parts make up 36% of total retail sales and are a

viable area for producers to explore because people want something to

differentiate their bikes. In the past, motorcycles were viewed as a cheap means

of transportation. By 1992, they came to be viewed as a recreational, or a

luxury item. This new perception of motorcycles led to the introduction of more

expensive models with higher prices. This led to the introduction of consumer

financing, one of the fastest growing service areas in the motorcycle industry.

Financing Services: As motorcycle prices increase to above the cost some can afford out of pocket. Many customers are finding a need for financing within the dealership of the motorcycle company. Financing terms and payment arrangements are necessary to succeed and be competitive.

The customers of motorcycles can be divided into two categories men and women.

Men:

A. Men under 30. This group accounts for 44% of all sales. Therefore, a

great opportunity exists here because of the group's size. This group's members

buy motorcycles for their transportation and recreation needs. Men in this group

buy more of mopeds, scooters and entry-level lightweight road bikes.

B. Men between 30 and 50. This age group makes up 45,000 of buyers another

large area providing opportunities for firms. The motorcycles most frequently

purchased are the heavyweight touring bikes and cruisers. Many buyers are married

couples looking for an alternative to taking the car out for weekend drives to

the country.

C. Men over 50. This group accounts for about 11% of motorcycle sales.

The heavyweight touring class and the middleweight road bike categories account

for most of the sales here.

Women. This group is a segment that is growing at a fast rate, thereby

representing an opportunity area. Firms to be successful here are to provide

smaller, easier to handle, comfortable, and good quality bikes to build up brand

loyalty.

As the years went on new models were produced and during the fifties women began taking more active roles in motorcycling following examples set a decade before by the Motor Maids. This popular group of women riders, which was supported by the American Motorcycle Association (AMA), demonstrated women didn't need to be only passengers. New models of bikes were made to suit the desires and needs of women riders. The bike's engine size and metallic structure was configured specifically to fit women.

Although motorcycles are sold internationally, 3 main geographic markets

comprise the bulk of motorcycle sales North America, Asia, and Europe. The

largest is the North American Market (USA and Canada account for about 60% of this market) accounting for 60% of worldwide motorcycle sales. With the baby

generation aging, opportunities exist for the penetration of new markets.

The Japanese market accounting for a great chunk of the Asian Market

is an untapped one for foreign manufacturers. Government regulations and trade

policies make it difficult for foreign manufacturers to enter though. Most

Asians consider motorcycles as a basic means of transportation. Major target

areas