Continuing to struggle with its lackluster performance, Harley-Davidson announced two steps aimed at returning the company to the solvency of a couple years ago,Shutting down its Buell line and selling off the high-performance brand MV Augusta. The moves will cost the company millions, but will allow it to refocus on its cruiser bike market
Harley bought the Buell name and product of inventor Erik Buell in 2003 in an attempt to brake into new markets, including sport and standard bikes.
MV Augusta once dominated Grand Prix racing, but has changed hands several times.in recent years.
Sales of Harley-Davidson bikes were down 22.9 percent from the same period in 2008. Revenue for the quarter dropped 22.1percent year over year, while distribution fell by 27.4 percent. Earnings per share were 10 cents shy of analysts' expectations of around 21 cents a share. To help reduce dealer overstock, the company said it would be cutting back on manufacturing in the fourth quarter.
Unlike its competitors, the uniquely American brand cannot offshore its business without risking damaging backlash from its customers.
Harley-Davidson Financial Services unit, recorded an operating loss of $31.5 million for the quarter.
Harley-Davidson remains constrained by its narrow identity as a cruiser bike company, The real question remains, however, just how much unfulfilled market for its machines remains?
(from an article in Daily finance)
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