Yesterday it was reported that Harley Davidson has announced an 84% fall in their third quarter profits – ouch!  Profits are reportedly down to $26.5 million (11 cents per share) from $166.5 million (71 cents per share)a year ago. Sales are down 21 percent to $1.12 billion.  In the United States, which unsurprisingly is the company’s largest market, sales are down by almost a quarter.

The management are confident they can ride out the storm with costs being controlled.

Part of this cost cutting exercise is the announcement that Buell will cease trading immediately and their recent acquisition of MV Augusta is also to be sold taking Harley out of the sports bike market.

Erik Buell made an emotional video, link below, which surely questions Harley Davidson’s decision to stop production of the Buell motorcycle?:

See Erik Buell’s video by clicking here

Is this a good move for Harley when our own home grown motorcycle success story, Triumph Motorcycles, are riding the storm of the recession, largely on their sports bike models?

Only today their Street Triple R was voted Bike Magazine’s Bike Of The Year 2009.

Triumph, in contrast to not only Harley, but also some of the major Japanese manufacturers, continue to buck the recession and have enjoyed a 30% increase in their share of sales in the bigger bike markets worldwide.  One in eight being sold in the UK over 500cc, now being a Triumph.

In contrast to other manufacturers Triumph is concentrating on developing new models as well as focussing on customer satisfaction, whilst at the same time minimising stock holding and reducing costs.

Harley Davidson are obviously in trouble and that is the reason for halting production of Buell and selling MV Augusta, thus giving them some leeway on the costs of keeping on at their current production levels of their Harley range.  If sales continue to decline at such a dramatic level, however, their only choice maybe to reduce production costs by further plant closures.

Only time will tell whether leaving the sports bike market is a good choice or not.

Let me know your thoughts below