The Motor Company in Crisis?
I read a notice today concerning the closure of a significant Harley-Davidson dealership in Southern California, the Los Angeles Harley-Davidson in Fullerton. As of October 31, 2024, this legendary motorcycle dealership is closing its doors. The news came after several other industry posts I recently read, confirming the closure of multiple large and noteworthy H-D dealerships across the country. Taboo Harley-Davidson in Alexandria, Louisiana shut down on October 16, New York City Harley-Davidson back in September, as well as about five to six others over the past couple of months.
What is happening at the Motor Company?
Mark Sheffield, a powersports industry insider, recently wrote, “Historically, HD dealers usually doubled the net-profit percentage of metric powersports dealers (for a decade having an HD franchise really was a license to print money). However, over the last decade, many of these dealers have constructed what we powersports guys refer to as ‘Taj-Mahals’. Those big facilities cost a lot of money to heat, cool, and clean. And as they start to age, they are also expensive to maintain. Now that most HD dealers have seen both a reduction in unit margins and sales volume, those big buildings are consuming a larger and larger share of the dealership profits. For some, it looks like the pendulum dipped too far in the opposite direction, and shutting the doors is the best exit strategy.”
The Teddy Morse Daytona Harley-Davidson complex we visited in Ormond Beach, Florida. Definitely a “Taj Mahal” edifice. Photo by Teddy Morse H-D.
I’ve visited several of those “Taj Mahals”, such as Teddy Morse’s Daytona Harley-Davidson and Falcons Fury Harley-Davidson in Conyers, Georgia, to name just two. During Daytona Beach Bike Week this year, Phil G and I wandered the grounds and levels of Morse’s H-D, awestruck at the sheer size of this “shopping mall” style motorcycle dealership. Phil even quipped that day, “Can you imagine the monthly HVAC bill on this place? The overhead? The insurance??” The more we thought about the expenses of a massive structure, inventory and staff of a dealership this size, the more overwhelming it seemed.
Apparently, it has indeed overwhelmed some dealerships.
Many of these massive “Taj Mahal” dealerships are in trouble. What has caused this crisis for so many of them? Has it been simply a difficult economy? Is this another sign that the Motor Company is still in decline? Or is it simply a market course correction?
What are your thoughts? Let’s discuss in the comments below!
Rob
Sounds like the same thing that happened when GM had their big ”2000” facility upgrades, a lot of older dealers either sold off or closed shortly afterwards having invested millions to do the facelift but never realized sales.
Harley dealerships are closing at an alarming rate here in the UK, things ain’t looking good
Well, if they didn’t cost as much as a small SUV they might sell more. they have priced themselves out of the market. $35,000 for a bike that cost maybe $8500 to build.
All I have to say is Go woke Go Broke!
no motorcycle regardless of what options it has should be over 20,000. Dont care what manufactures claim. There is not 38,000 dollars worth of materials or electronics put into a harley to justify the cost.
Let’s get back to basic…streamline nd simplify the production of the bike….lower the price..and for gods sake bring back the 5 most successfully popular selling bike models..but before all this fire the CEO…top management is lost…put the biker back at the helm…Americans should be in charge no one wants an electric Harley-Davidson…stupid
The baby boomers who fueled the surge are aging out
Fewer young riders coupled with high price on top bikes street/road glide isn’t painting a great picture.
Agreed. Definitely contributing factors.
My thoughts exactly. The prices on these bikes have become ridiculous and I am one of those who is aging out. Im looking for a Softail to replace my Road King but my zeal to do so has diminished due to the cost of these bikes. Sadly I am leaning towards selling mine and going without.
Soooo painful to think of that.
Hi Rick,
Don’t go without, just find another brand and pick something appealing and affordable to you.
I’d like to suggest Triumph’s Bonneville line and/or the modern classics of Royal Enfield, for starters. These brands build bikes with the traditional look, lines and feel of the motorcycles we and our fathers before us rode in yesteryear, with the reliable modern tech we’ve come to expect.
At a much better price point than new H-Ds.
Ive been riding Harleys for years- I also ran on the rice burners before I wised up. The british bikes? if you dont run to the dealer to change your oil you’ll want to get parts and do the work yourself. I had a TR6 years ago TRY AND GET PARTS. Theres no bike like a Harley, too bad, ill just keep mine going.
I bought HD Heritage Softail in 2009. Great bike but I’ve seen HD asking more and giving less. They cut they’re HOG rallys way back. The newer bikes don’t look as nice. Quit trying to compete with other brands and go back to what you did before. Build great bikes and smaller dealerships.
as a former GM of a H-D dealership I can tell you that H-D corporate itself sends those dealerships into the abyss. Basically they decide how your site needs to look, charging ridiculous prices for tooling, software, retail environment (which can only be bought thru them of course) and in the end set unmatchable goals for their dealer principals, making it impossible to reach targets or to make ends meet. I quit my job as I was just tired of dealing with them idiots!
The Harley-Davidson Motor Co. and Harley Financial will give dealership owners as much cash as they need to build large dealerships. Harley Financial will finance cars, homes or evey air planes for dealership owners. The problem comes when pay back time begins. If a dealer defaults, Harley can then take everything financed through Harley Financial then basically give the franchise to any interested car dealer in the area. This happened in Carson City Nevada. Harley Financial is located in Carson City and I am sure the motor company did not want an empty building in the town where Harley Financial is located. Harley has given dealers all the rope they need to hang themselves while demanding Dealers maintain an impossible standard.
Rick, have you ever considered Janus Motorcycles of Goshen, Indiana? American made quality with some Amish craftsmanship added.
After 51 years of riding Harley’s at age 71 I bought an Indian Super Chief Limited!
And having HD dabble in the lunacy of woke electric bikes coupled with building overseas in Asia is nuts. Having to absorb the overhead loss from those elec bikes only hurt them.
I was one of those dealers who built a mega dealership. I liked to call mine a GarageMahal!
I built my new building in 2005 and sold my business in 2011.
From November 2019 until August 2020 I attempted to buy my business back from two Canadians, who had run it in the ground.
That’s the same time Harley-Davidson’s new CEO who hasn’t shown me anything today decided to close 100 dealerships in America if they weren’t selling 100 new units a year or more..
I had sold two and 300 new units in the good days never less than 150 but the Canadians who bought my dealership had run it in the ground and were at 106.
They sent me a contract in early August that I immediately told him I could live in and we get the bank financing done and finish my Harley Davidson dealership application.
Three days later they announced they were closing the dealership that they had done a contract to close with Harley-Davidson.
They owed me a large sum of money and back rent at the time and today now that the lease is up, they owe me nearly $1 million.
Now I read that the CEO has signed some type of WOKE agreement that has upset a lot of potential writers and sales are expected to go even lower.
What I was the deal at 56% of all motorcycles over 650cc in my territory were Harley-Davidson
I just read that Harley Davidson now holds only 27% of that category in the nation!
I’m sure there are lots of factors that contribute to the decline of Harley-Davidson the closing so many dealerships could not have helped
Bobby, wow, that’s quite a testimonial. Thanks for shedding some more light on this, and how it personally went down with you.
We love the brand, rich legacy, but seeing warning signs of more adversity ahead.
I was a HD dealer for 19 years and sold out in 2004. I could see the writing on the wall. We were 1 of only a few that hadn’t done the designer store and I couldn’t convince myself that it made sense to invest 6 mil to please Harley. That would have brought on more employees plus stocking and doing things the way Harley wanted it. In fact one time I came back from lunch and the wife was mad because the HD District Manager had come in and told her she didn’t have a say so as to what he had to say. Needless to say he got a phone call to NEVER come back into our store and to never call and if he ever needed something to just fax it. Of course he tried coming back in but my employees told him I wasn’t in even though I was standing right next to them.
Oki said it once and I’ll say it again Go woke Go broke!
same as cars overpriced junk give me a EVOLUTION MOTORCYCLE THAT last forever that cost me $12,500 new just a bike not a computer
I have the same Evolution Engine and this bike is a higher quality than any other Harley. Smooth as ever and fast as hell:)
EVO bikes are the best bargain on the planet. Parts are cheap and plentiful. Maintenance is simple and they sound and ride like a Harley should.
No need for the over managed, over priced dealership.
Bike Prices are Through the Roof
when I change my last name to Rockefeller I’ll buy one.
Wasn’t it the MoCo that threatened alot of small dealers to keep their franchise, they had to build giant showrooms?
go woke
go broke
When a motorcycle cost more than some houses, and the dealers push and push to buy it. Promises are made never kept, Harley has basically shot itself in the head. Hiring a foreigner to run the company, closing American factories doesn’t set well with lots of people.
There are a lot of problems with the company.I think the Union hurts the company because some employees are overpaid for what they do.I also think they don’t need to have big showrooms & prestige to sell Harley’s.I think people are buying cheaper bikes now because Harley’s are pricey.I had to wait until 40 to buy a Harley.The biggest selling point was American made,but not anymore.
I have 2. Ill ride em till death.
hell yes my brother tell them like it is,i might even be buried with mine
Bottom line price of motorcycle, cheaper to buy a Indian or Goldwing. Just buying the name don’t mean your buying quality anymore. Love Harley-Davidson, Lawd knows I do, but if price isn’t matching the quality, your same as everyone else, sorry,,
CVO FOR LIFE
Harley for life nothing else matters, sorry
If you can’t run with the Big Dogs stay on the porch. There’s no other word for motorcycle then HARLEY DAVIDSON
Same happening in Australia. Shutting shop and or moving into smaller less attractive shops. The dealer ‘destination’ and individuality killed off by HD MoCo wanting dealerships to look like a sport shoe store with limited stock.
Was in my 40’s when I bought my first HD, ‘03 Nighttrain. My first new one was at 55, ‘15 SG and I’m now 65.
Baby boomers are fazing out either by dying or unable to ride for one reason or another. I also believe we are or were the biggest HD buyers. Other valid reasons have been mentioned but I think this is the biggest reason.
Baby Boomers aging out of riding is definitely a contributing factor.
we might be aging out but Harley has forgotten we have kids and grand kids that ride
Boomers aging out definitely is hurting. Who else but older mid life crisis folks nearing retirement have the cash to buy these bikes at scale (not talking one off rich folks but a large % of an age group). I’m a bit younger. the whole dealer thing threw me off, seemed very snobby for the easy rider brand. I hate dealers anyway, and I got ignored the 2 times I went in to a harley shop. Well and when they told me they didn’t have a M10 socket when my friend’s kick stand fell off on a road trip.
From the outside, modern Harley loyalists (the vocal ones) were about as bad and condescending as Bimmer owners. They were both also unreasonable to deal with on the used market, kings of “I know what I’ve got” trying to charge you for all the chrome they upgraded their bikes with and getting their “investment” back out. I can see why people bought new.
I also moved from the midwest to an area where a cruiser just wasn’t the right bike. I needed fairings for rain, and abs for stopping, and the roads were a lot more moountainous and curvy. I love working on my own bikes, which seemed to be aging out of the mondern harley culture (and ins’t in the bmw dna). A sport touring was just far superior for that situation and harley didn’t make one at the time.
I think Harley is in a hard spot as they’ve got a aging (dying) core customer base who is actively hostile to “woke” changes like electric, and who is rioting as they try anything that might save the company long term. This causes an inability to attract a new customer base. It didn’t help they went so hard in on milking the peak of the boomer generation while alienating mine.
Sadly looks like this combination of factors will have them bankrupt and either bought by private equity or a badge brand from someone else in 20 years. They tried to be apple or rolex and it didn’t work.
I personally do not like the new bikes. Good tech but about horrible. the new dressers look like Gold Wings used too. Give me a pre-Obama Street Glide or Dyna. they don’t listen.
Harley has forgot the dealers and their input from back in the day when they were 6 hours from bankruptcy. Yes I am a dealer for over 50 years and still like the process. I wish Harley would remember we dealers are their ONLY customers. Dealers deal with the customer and those issues. I remember when H-D would have group meetings with dealers and ask for issues. What a blessing that was that they actually asked, now if you suggest something they act as if you are a D.A. They have completely forgot how to treat people. Time will tell.
Isn’t there a person with the last name of Harley or Davidson that could help this beautiful company? Why would anyone hire a woke, dei, lgbqt. Foreigner that doesn’t even speak good English much less run a American icon like Harley. Davidson.
This shop was always shady. They always had a link to Club circles and never really changed the culture. Every time it changed hands nothing would change. It’s not that hard to run a dealership. The play book it out there. Looks at Ride Now. Just rinse and repeat. Here is a hint, support service and part as much as sales.
Perfect storm of demographics, overhead, pricing, a failed marketing attempt to appeal to a broader audience, and some questionable reliability. OH…and a powerful economic downturn for all sorts of toys and equipment.
KTM is telling creditors they’ll get back 15 – 30 cents on the dollar. I expect a restructuring of Harley…while not imminent …will take place in the next few years. This is a powerful downturn with supply-demand balances everywhere!
now that American faces backlash from overseas with tariffs this is but on more nail into coffin for HD. That CEO must go and be remove for it’s time he is but a boat anchor around the ankle of HD. Time call a spade a spade a spade clean HD house before its to late but I feel it is to late for HD.
I grew up with harleys, could fix it myself back when I started. Now parts are unreasonably high and there’s alot you have to go to a dealership to have done. It hurt to sell my road king classic. I’m now riding something I can work on myself again. If Harley would place reasonable prices on their product I’d come back.
I gave up on HD in 2015. Sold my Street Glide I bought new and never looked back. Don’t miss the BS Attitude, the outrageous prices for literally everything, and the sketchy quality and durability.
Quite honestly, I was truly fed up of the ridiculous conduct of the doctors, dentists, lawyers and businessmen who with their loudmouthed skanky women, fancied themselves “bad asses” as weekend warriors. It was seriously pathetic.
HD kept fostering this stupid passé mentality and it has come back to bite them in the ass. I’ve spoken to literally hundreds of people who have told me the exact same thing.
I worked for years in management of a BMW motorcycle dealer in the late 90’s and early 2000’s and saw the exact same thing- $$$$$ Corporate ID, outrageously expensive showrooms, $25,000 signs and interiors you had to buy from BMW corporate, attitude galore, and trying to be everything for everybody. Didn’t work then and it doesn’t work now.
Oh and let’s not forget the greed as the margins of profit for dealers has done nothing but shrink and shrink and shrink.
It’s just a matter of “when” they fold up, not “if”.
HD shot itself in the foot when it came out with that POS Milwaukee-8 engine. That and grossly-overpricing its outdated products and not taking care of the few remaining customers that it still has. Another once-great American company taken down by greed and incompetence. That’s all there is to it.
The Harley Davidson corporate honchos made Harley dealerships renovated and drastically expand their sales, service and merchandise footprint when times were good for Harley or risk losing their dealerships. The dealerships had no choice but to go along then some years later the bottom fell out leaving dealerships holding the bag on these dinosaur facilities.
It’s unfortunate, but the baby boomers who kept HD afloat are now trading their bikes in for walkers. This was a time period when people had good jobs, decent homes and some money to spare on toys. Today’s younger generation are struggling to find jobs, let alone jobs with benefits and a pension all well trying to afford a roof over their head. Their is no money left at the end of the day to afford toys let alone the prices HD expects.
As i understand it, ever since the CEO anounced that they went woke last year, Harley Davidson lost at least 40% in sales.