VTXOA - View Single Post - Harley pulls the plug on the LiveWire
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post #68 of (permalink) Old 10-21-2019, 03:39 PM
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Join Date: Jun 2004
Location: Denver and Chicago
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Originally Posted by Harkon View Post
Your metrics then are different than mine. While gross profit is one measure, and perhaps the cleanest, it isn't accurate as to what is left in the bank account at the end of the day. You are certainly free to run your business your way, but gross profit without knowing your op costs is foolish. Again it may be the cleanest measure for you, but it does not take into account what it takes to keep the lights on, develop new tech, and remain competitive in the global market.

You do understand how motorcycles get priced for a given market, right? Do you know if Honda's margin is the same in the US as it is in India? If you believe it is, then perhaps some research into the matter is in order. I, for one, would not be surprised at all to find out that Honda Canada/USA had far higher margins than 20% in North America. Why? Well if you sell bikes in Asia and India at 15% margin, it will take a lot if extra margin in North America to bump that up to 20%, given the much lower volume. Personally, I think if you saw all of the numbers, you might be surprised. I believe you are right, Harley does get more for their brand, but I don't believe it's near the premium you think it is.
I think i agreed that Honda gp % could be slightly misleading. We donít have much to go on as we only get what is publicly available. Still, Honda seems to operate more efficiently than HD as their gp % is 19% and HD is 38%.

From a consumer perspective I donít care what their overhead is - itís irrelevant. I care how much I am paying and what I am getting.

For sure HD is getting a premium here from anyone who buys it. I donít get that - 60 year old technology isnít worth a premium to me. I would expect that to be cheaper.

Still - letís look at net profit. Honda is around 5% for its total product line. HD is at 12%.

All we can take two facts from these numbers:

1. HD is less efficient than Honda.
2. Anyone who buys HD is likely overpaying.

Is that worth it? Up to you. I wouldnít buy them for the same margins as Honda - HD isnít reliable with its air cooled nonsense and I place little value on a brand name to begin with.

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