Major, and mostly unexpected, announcements from Harley-Davidson today! Because of the impact the current international recession has had on sales of Harley-Davidsons, the company is doing what many other manufacturers have had to do: tighten its belt and readjust production to meet current demand. The Motor Company experienced a 21.3% drop in worldwide sales in the 3rd quarter compared to 2008 (but this was an improvement over 2nd quarter sales, which had dipped 30% from last year.)
The first step in improving their financial position has been under consideration for a few months - possibly moving out of their old, inefficient and over-sized manufacturing plant in York, PA, looking for something more modern and properly sized for their production needs. They're looking at possible plant sites in MO, KY, IN, and TN.
The company is also selling MV Agusta. They just purchased this Italian brand in August 2008 to get seriously into the sports bike market in both Europe and the US. The purchase of Agusta by HD represented a move that was questioned by many at the time because it was so far afield from Harley's core market. More noteworthy for their U.S. market is the fact that they are ceasing production of the Buell brand effective the end of this month. Buell has been a wholly owned subsidiary of HD since 1998 and was noted for its advanced engineering design. The Buell name has been around for 26 years, ever since former Harley engineer and racing privateer Erik Buell took the concept of motorcycling physics and performance to a new level.
H-D will focus on what has been its core market, and customers, for over one hundred years; traditional Harley-Davidson road bikes.
It's probably a good time to buy Harley stock. It's taken a bit of a beating lately and is just starting to move upward again. Things will bounce back and the company is making the right moves at the right time. Harley's worldwide market continues to grow. In addition to Europe, countries such as India and China, with huge populations and a rapidly expanding middle class now able to afford luxuries such as touring motorcycles, are rapidly growing markets.
A detailed financial report by Harley-Davidson can be found at: http://www.harley-davidson.com/wcm/Content/Pages/HD_News/Company/newsarticle.jsp?locale=en_US&articleLink=News/0581_press_release.hdnews
