Harley pulls the plug on the LiveWire - Page 7 - VTXOA
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post #61 of 103 (permalink) Old 10-20-2019, 11:32 AM
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I can remember back around 1990, walking out of the Honda dealership shaking my head because the cost of a new cruiser was $5000.
Yep. Inflation.

The best measure of how overpriced something would be is to measure Gross Profit (assuming the company is public). Honda's is 20%. HD is 38%. to put that in perspective one pays a 20% premium to ride HD.

To put it another way, they could cut the price 8k-10k on a 25k bike and still make a profit.

I suppose the utility of the HD might be higher, but that is highly subjective and would vary rider by rider. One thing is clear - the millenials see no where near the utility of riding a harley that we older farts did (as a group). HD is in deep sh*t. they will not be able to sustain that profit margin for long and demand for their product will continue to plummet unless they can pull together a pabst coup and become cool.

bottom line - harley is going to be a shell of its former self as its prime market dies and no one finds enough appeal to pay a 20% premium for their product anymore.

Do not go gentle into that good night. Rage, rage against the dying of the light - Dylan Thomas
All that is necessary for the triumph of evil is that good men do nothing - Edmund Burke
If you can, help others; if you cannot do that, at least do not harm them. - Dalai Lama
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post #62 of 103 (permalink) Old 10-20-2019, 11:57 AM
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Probably all true but....Harley seems to be the only company trying to put something out there for Everybody. If they do fail it won't be from a lack of trying. In that regard anyway.

I watch discussions like this and sit back and wonder why it is that so many Americans seem to want to see an American company fail. After spending time on another board for the last 18 months or so I'm starting to think that some of it is warranted. HD seems to be unwilling to listen to their customer base about some things, and also seems to turn a deaf ear at times to problems with their products, costing their customers time and money, and themselves those customers' loyalty. I don't know if the company has always been this way but it does remind me of the contempt that a lot of harley riders showed non-harley riders back in the day before Harley began outsourcing so much of their work and components out to overseas manufacturers. That hard to accept fact quieted a lot of the rider attitude, but doesn't seem to have done anything about the company's apparent disdain for the people they need the most, their customers. And this filters down to the dealerships who echo that disdain, making them dismissive at times to their own customers concerns.

Without a major change in attitude and approach to customer appreciation (in terms of price and post-sales support), I fear that things are going to get much worse for HD before they can get better.

As for myself I'm happy that I got a bike that is so enjoyable to ride. It's been very dependable, doesn't leak any fluids, and goes like a scalded goose when I twist the wick. I'm happy with my purchase.
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post #63 of 103 (permalink) Old 10-20-2019, 06:15 PM
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Originally Posted by Mowoc View Post
Yep. Inflation.

The best measure of how overpriced something would be is to measure Gross Profit (assuming the company is public). Honda's is 20%. HD is 38%. to put that in perspective one pays a 20% premium to ride HD.

To put it another way, they could cut the price 8k-10k on a 25k bike and still make a profit.

I suppose the utility of the HD might be higher, but that is highly subjective and would vary rider by rider. One thing is clear - the millenials see no where near the utility of riding a harley that we older farts did (as a group). HD is in deep sh*t. they will not be able to sustain that profit margin for long and demand for their product will continue to plummet unless they can pull together a pabst coup and become cool.

bottom line - harley is going to be a shell of its former self as its prime market dies and no one finds enough appeal to pay a 20% premium for their product anymore.

Uhm, you are aware that gross profit and net profit are different things, right? If you run a business on gross profit, assuming that's what goes in the bank, you'll be broke before long. My bet is margins are much tighter than you think they are. Also, your math doesn't work.


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post #64 of 103 (permalink) Old 10-20-2019, 11:34 PM
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Uhm, you are aware that gross profit and net profit are different things, right? If you run a business on gross profit, assuming that's what goes in the bank, you'll be broke before long. My bet is margins are much tighter than you think they are. Also, your math doesn't work.
Um.......

1. Gross profit is the cleanest measure of revenue over production cost. I admit Honda isnít exactly fair - it includes everything. Cars, boats, whatever. I am sure it is close though. That tells me Harley earns 20% more than Honda does prior to administrative expenses. So for every dollar of revenue HD makes they get .20 more than Honda.

2. Letís take the 25k bike. If HD sold it for that amount than it cost 15k to make (40%gross margin). If Honda sold a 25k bike than it cost 20k to make (20% gross margin). Based on this the numbers very much make sense in that 8k off would still net HD a profit.

No matter how you slice it he is priced higher than the competition for nothing more than a name. The numbers and facts donít lie about this.

Is it worth it? Up to you. To me it wouldnít be worth it but I donít spend your money.

Do not go gentle into that good night. Rage, rage against the dying of the light - Dylan Thomas
All that is necessary for the triumph of evil is that good men do nothing - Edmund Burke
If you can, help others; if you cannot do that, at least do not harm them. - Dalai Lama
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post #65 of 103 (permalink) Old 10-21-2019, 09:08 AM
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Um.......

1. Gross profit is the cleanest measure of revenue over production cost. I admit Honda isnít exactly fair - it includes everything. Cars, boats, whatever. I am sure it is close though. That tells me Harley earns 20% more than Honda does prior to administrative expenses. So for every dollar of revenue HD makes they get .20 more than Honda.

2. Letís take the 25k bike. If HD sold it for that amount than it cost 15k to make (40%gross margin). If Honda sold a 25k bike than it cost 20k to make (20% gross margin). Based on this the numbers very much make sense in that 8k off would still net HD a profit.

No matter how you slice it he is priced higher than the competition for nothing more than a name. The numbers and facts donít lie about this.

Is it worth it? Up to you. To me it wouldnít be worth it but I donít spend your money.
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.


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post #66 of 103 (permalink) Old 10-21-2019, 03:14 PM
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Itís a conspiracy. The Arab oil companies bought the patents for it and wonít let HD sell it, this also happened in the 70ís with a carb that would allow a caddy to get 75 MPG, in the 80ís with the perpetual motion machine, the 90íscold fusionÖ.
What about that boat the ran on water man, it had a fiberglass air-cooled motor and ran on water man....


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post #67 of 103 (permalink) Old 10-21-2019, 03:20 PM
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no rumble of the engine?
that sweet vtwin vibration?
whiff of the exhuast sometimes?
shifting gears?
not a motorcycle in my opinion as i know it.
maybe some of the newbies will like them?
Harley better look elsewhere for a new project.
exactly!!! they can take that bike and the electric car's and shove them... I don't want any of that crap.... I want my internal combustion engine burning gas and making noise like god intended!!!!!


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Gone to new home - 2007 Honda VTX1300C

Last edited by KenDawg; 10-21-2019 at 03:30 PM.
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post #68 of 103 (permalink) Old 10-21-2019, 03:39 PM
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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.

Do not go gentle into that good night. Rage, rage against the dying of the light - Dylan Thomas
All that is necessary for the triumph of evil is that good men do nothing - Edmund Burke
If you can, help others; if you cannot do that, at least do not harm them. - Dalai Lama
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post #69 of 103 (permalink) Old 10-21-2019, 04:01 PM
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Wow! I didn't know there were so many accountants on this forum. Now I know when tax season comes around I'm going to hit up one of you folks with all this knowledge😉
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post #70 of 103 (permalink) Old 10-21-2019, 09:24 PM
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Originally Posted by Mowoc View Post
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.
You can assume what you want. It is assumption, though. Doesn't matter if you care about overhead or not, you aren't running the business. Honda's costs likely are lower, that's what they manufacture bikes in Asia now. Your understanding of how business is done, especially internationally is rather shallow and doesn't take nearly enough into account.



The 60 year old technology is an old and dead argument. Because it isn't water cooled? Please. Because it uses pushrods? Really? There is far more tech in my 2012 Road Glide than in any VTX ever, and counts only the fuel management, ignition and brakes. Have you owned both? Recently? You assume much. Not reliable? I honestly have had fewer issues with my Harley than I did with my VTX. As in I haven't had an issue yet. I loved my Honda and wouldn't hesitate to take it on the road anytime. I have the same confidence in my Harley. Of course I do take good care of it. Regular maintenance and so forth, just like my Honda got.



It is certainly a wonderful thing, our free market. You are free to purchase what you want, seeing whatever value in it that you wish. I would never call out anyone for doing so. Misinformation is what I'm calling out here. They are wonderful things ... opinions, and the freedom to voice them as fact.


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