How to save Harley Davidison - Page 6

 

The Older Gentleman wrote:

Could be - these days.  But we were discussing 1980.

 


Ah, that's pretty much it, then. More than one BMW exec told me that
the first time they considered ending bike production was when they
had to replace the R69 and similar bikes. These were the fabulously
built ones Earles forks things with all ball-and-roller bearing
engines, and phenomenal quality. And they were incredibly costly.
Anyway, that was the first time they decided to keep going because of
the 'car sparkle effect', and the result was the /5 series (cheaper to
build etc etc).

The second time was around 1980[1] when they knew that the old
airheads had had their day and would have to be replaced with
something more modern, almost certainly water-cooled[2], more
powerful, etc etc. And they knew the development costs were going to
be horrrendous for what was a relatively small player. And they came
to exactly the same decision: the influence on their cars' image could
not be under-estimated. And this time the result was the K series[3].
Launched in 1983[4], and still around a quarter of a century later -
just.

Nowadays, of course, BMW bikes are definitely a profit centre in their
own right. And BMW is spending sums on R&D which must have seemed
unimaginable 30 years ago...

[1] So you are absolutely right on the money with that date! <Doffs
hat with respect>
[2] They actually built a water-cooled, er, airhead mule just to see
if it would work. Charmless, apparently.
[3] The mule that led to the development of this had a Peugeot 104
engine (small one-litre four from what you'd call a sub-compact car)
dropped sideways into a bike chassis. The idea worked damn well, and
the rest is history.
[4] I was there!

 

J. Clarke wrote:

Or they wanted a brand new bike for $thousands less than MSRP had been a
year or two ago with the Japanese government subsidizing the loss.

 

On Jul 13, 2:20 am, totallydeadmail...@yahoo.co.uk (The Older
Gentleman) wrote:

The fact that the Japanese manufacturers were using profits from one
export market (Europe) to dump product on another export market (the
U.S.) with collusion from their own government tells me that it was
not "free" in the sense that the market was distorted.


However, it did provide a pattern of marketplace behavior that U.S.
(and other countrys) trade officials could (and did) consider in their
trade relations with Japan.  And it almost certainly contributed to
the U.S. decision to impose the tariff on imported motorcycles over
700cc in engine displacement.


Certainly there were plenty of customers for Japanese big bikes.
However, that was not enough for the Japanese manufacturers.  In fact,
sales figures showed that Harley-Davidson sales (though already
declining at the time for many of the reasons that you cite) suffered
disproportionately when the Japanese began selling their liter bikes
at prices below their own cost to make them, and warehoused tens of
thousands of bikes in 1981 and 1982, only to flood the market with
them at as little as 40% of their original msrp in late 1982, 1983,
and 1984.  Even for people who might have been predisposed to buy a
Harley simply because it was American-made, that may well have
provided enough reason to switch.


No argument with the above.  In fact, I doubt that if the Beals/Willy
G privatization buy-out and the development (not production) of the
Evo engine had not happened BEFORE the tariff - providing a reasonable
chance for recovery given relief - the government would have imposed
the tariff at all.


Because, ostensibly, the Japanese VASTLY overestimated the sales
growth curve of large displacement motorcycles in the U.S. based on
sales from 1978 through 1980, and produced approximately 1.5 times as
many motorcycles as the market could bear in 1981, 1982, and 1983.

Rather suspicious is the fact that those very conservative companies
had NEVER made that mistake in the past, did NOT make that mistake in
Europe or Asia at the time, and have never REPEATED that mistake since
then.  It's enough to make one wonder if it was, indeed, a mistake at
all.


Oh, it's a very successful American MOTORCYCLE company right now.
It's just not a particularly successful American FINANCING company
right now!  ;-)


Not the same thing.  Lada was not being subjected to unfair trade
practices.  Nor did they have new,competitive models in the works.
Nor had they recently extricated themselves from the clutches of a
bloodsucking corporate owner who had diverted their profits and
starved their manufacturing facilities, R&D department, and quality
control budget (did Lada even HAVE a QC budget?) for years.


Certainly not the equivalent, at all.  But the "Low Slingers," the
"Midnight Specials," and the "Customs" of the Japanese manufacturers
that began trickling into the states in 1977 WERE proof that the
Japanese companies saw Harley-Davidson as their competition, and the
gradual morphing of their custom, cruiser, and touring motorcycles
into virtual clones of SPECIFIC Harley models is proof that they were
dead right about what American riders wanted.

Notice that those models now compete against their H-D competitors on
the basis of MERIT, since they cost very nearly the same as the Harley
models that they compete against?  The new Honda Shadow RS, a DIRECT
competitor to the base 883cc Harley Sportster, does not sell for 1/3
the price of the Sportster.  In fact, it lists for MORE than the price
of the base Sportster.

Now *that* is the free market in action.  Interesting that *that*
doesn't have Harley against the ropes.

 


<snip>


Possibly. If so, that was wrong. But the US has a long history of
ignoring trade rules when it suits it. I really don't need to give
examples.

<snip>

Yes, but you don't know *why* the market was flooded. it wasn't a
deliberate attempt to dump. It really wasn't.

<snip>

 

Partial reason. There was another, bigger one. I'm still waiting for
someone to identify it.


No, they made a single crucial mistake and have been smart enough not to
make it since.

<snip>

Heh. That made me grin. It's probably true, too.

<snip>


In 1981 the US dollar was worth 221 yen. Today it's worth 92. I think
that is *far* more likely to be the cause of the rise in price of a
Honda Shadow against a Harley, don't you?



--
BMW K1100LT  Ducati 750SS  Honda CB400F  Triumph Street Triple
Suzuki TS250ER GN250  Damn, back to six bikes!
Try Googling before asking a damn silly question.
chateau dot murray at idnet dot com