• Aging customer base, with discretionary income

• Profitability linked to the expensive Touring bikes - Company dependant on these bikes

• The company certainly needs additional sources of growth. – New motorcycle registrations have fallen 41 percent since 2007 overall

and 36 percent for Harley. – The company's production has sunk to 2001 levels. – About a fifth of the bikes Harley ships today are Sportsters, the smaller,

less expensive (and less profitable) models.

• The median age of a Harley buyer has leapt from 35 in 1987 to nearly 47 today. – Whatever youthful countercultural mystique Harley

may have once enjoyed, it is now a middle-aged nostalgia brand.

Business Challenges

• Harley-Davidson (HOG) is in a fight with:– The recession and a sharp consumer

spending slowdown– The aging of its customer base– Cheap foreign imports– A credit crisis that has made it difficult

for both the motorcycle maker and its loyal riders to get financing.

• Strapped Harley customers wound up selling their motorcycles during the recession. This has created a glut of used bikes on the market, causing the ratio of used-to-new bike sales to rise to two-to-one in 2009 from one-to-one in 2007.– As a result, prices of used bikes are falling

Business Challenges – Cont.

• biggest share of the bike market in the U.S.• a rabidly loyal owner base

Business Strengths