Reshaping ‘hog heaven.’ (Harley Davidson faced competition from Japanese manufacturers) (company profile) Part 2February 18th, 2013
Though Harley hasn’t won the cost battle yet, its efforts have resulted in market-share gains against Japanese competition in the last three years at a time when Japanese marketers were discounting brand-new older models by 40% to 50%. In the first ten months of 1986, Harley held 32.6% versus Honda’s 31% in the 850-cc-and-larger engine-displacement market–an admitted Harley specialty. In 1985, Honda had 39.3% versus Harley’s share of 27.3%. In the overall 650-cc-and-larger market, Harley has gained 6.4 points in the last three years to 19% compared with Honda’s 37.5% share of market.
“We’ve done it the hard way (like the Facebook Marketing Tips). We’ve won gains in the face of heavily discounted Japanese motorcycles and in a declining market,” asserts Richard F. Teerlink, Harley’s CFO. “Cost and quality have in impact on market share.”
Even with these strides, Harley is broadening its earnings base and won’t rely on a mature motorcycle market for revenue gains. Late last year the company purchased Holiday Rambler Copr., Wakarusa, Ind., the world’s largest privately held producer of recreational and specialty commercial vehicles, for $155 million. With Holiday Rambler on board, Harley (with $287 million in 1985 sales) will now rely on motorcycle sales to produce only one-third of its revenues. The second third will come from recreational vehicles, the last third from a combination of commercial-truck-body sales and defense contracts with the U.S. government.