Buell is done, finished, gone

[RACER X]

Originally Posted by Particle Man

that explains why my local HD dealership dropped the Buells from their floor lineup and no longer sell parts.

hmmm......guy called local HD place thats having the firesale and they said they'd carry parts for the next 7 yrs.........

[Dave]

Originally Posted by pdog

Would you buy a Buick or Mercury sports car?

This is the exact reason why Toyota created Lexus and Honda created Acura. They couldn't sell luxury cars because they were perceived to be low or mid range car makers so they had to create new brands. HD will need to do something similar if they ever want to get into sport bikes.

if you told me you didnt pop a massive woodie any time you saw a big block gsx id call you a fucking liar

[karl_1052]

Originally Posted by Particle Man

that explains why my local HD dealership dropped the Buells from their floor lineup and no longer sell parts.

I doubt the dealers knew. I don't think Erik knew until they brought him into HR one morning.

[Gas Man]

http://hellforleathermagazine.com/20...n-to-erik.html



We just got off the phone with Harley spokesperson Paul James. According to him, Erik Buell is in ongoing discussions with Harley about taking on an advisory roll at The Motor Company, in which capacity he'll contribute to future product design. The rest of Buell's 180 employees won't be so lucky, they'll be out on the street as of December 18, the day the Buell plant shuts down. This news will come as a shock to them, like the rest of us, they only found out about Harley killing Buell this morning.



Paul didn't have Buell sales figures to hand and we don't believe they're published by Harley, but he suggested that this year's sales were down compared to last's about the same percentage as Harley's better-than-industry-average 21.3 percent figure. Indeed, Harley isn't killing Buell because it's unprofitable, it's killing Buell because it wants to invest every last penny back into Harley to save that brand from possible failure. It's not actually sales that are Harley's biggest problem -- although they can't help -- it's the troubled finance wing. Harley's practice of giving sub-prime motorcycle loans to unsuitable candidates has bit the company in its proverbial ass, forcing Harley to borrow $1 billion in operating capitol at 15%. That's only enough money to see it through to the end of the year. So far this year, revenue at Harley is only down 17 percent, yet net income has fallen 71.4 percent.



The decision was made to shutter rather than sell Buell because it's product range and distribution network are so heavily dependent on its parent company, that there's relatively little value in the company that could be transferred to a new owner.



Asked how Harley intends to replace the customers that will now be lost to Buell's competitors and how Harley intends to expand its appeal to post Boomer generations, Paul is insistent that Harley's current range already has the ability to appeal to that audience, saying, "Keep in mind, in the U.S., H-D holds the number two share position overall (all size bikes) among young adults 35 and younger and we are the share leader in heavyweight motorcycles among this group, so we know our motorcycles appeal to young adults.



"We will continue to develop products under the Harley-Davidson brand that appeal to riders under 35 years old. That said - and while I can't discuss the specifics of future product plans - you can expect us to focus on high-impact product introductions that attract new riders and help define the future of motorcycling. We are not ruling anything in or out...we simply will pursue it through the Harley-Davidson brand."

Wes Siler. October 15, 2009 — Permalink

[Particle Man]

Originally Posted by karl_1052

I doubt the dealers knew. I don't think Erik knew until they brought him into HR one morning.

Good point. I think the local guy mentioned that it just got too damn expensive to carry the franchise.

[Sean]

Well that's interesting

Sales (MRQ) vs Qtr. 1 Yr. Ago -18.02
Sales (TTM) vs TTM 1 Yr. Ago -13.25
Sales - 5 Yr. Growth Rate 4.02
EPS (MRQ) vs Qtr. 1 Yr. Ago -84.13
EPS (TTM) vs TTM 1 Yr. Ago -67.85
EPS - 5 Yr. Growth Rate 2.24

So they're down slightly and losing their shirt. Their gross margins are still higher than the industry average. Considering that so much of their sales is high-margin accessories (t-shirts and chrome junk), I would guess that the drop in earnings is not in line with the drop in sales revenue.

I think if Buell were earning money for them, they would keep the brand and just suspend R&D and marketing (inc racing). That tells me it's a money losing operation.

[z06boy]

Originally Posted by pdog

Would you buy a Buick or Mercury sports car?

Well since that's not what we're talking about probably not but...

If I was smart enough to know it was a rebadged Buell and Erik Buell was still overseeing it I might.

[pdog]

Exactly. HD took the first step in getting into the sportbike market: create (or buy) a brand. They just failed to follow up on all the other details: go racing, use or develop competitive technology, etc...

Originally Posted by Sean

You mean like create a new brand to sell sportbikes run by an ex-racer?

[pdog]

I have no idea what a big block gsx is but I'm sure it's very erotic.

Originally Posted by Dave

if you told me you didnt pop a massive woodie any time you saw a big block gsx id call you a fucking liar

[pdog]

Ah, a 40 year old muscle car. Nice.