On the Call: Harley Davidson CEO Keith Wandell

AP News
Posted: Apr 19, 2011 5:20 PM
On the Call: Harley Davidson CEO Keith Wandell

Harley-Davidson Inc.'s first-quarter net income more than tripled to $119.3 million. Although global motorcycle sales rose 3.5 percent, sales in the U.S. fell 0.5 percent.

Harley attributed lower sales largely to problems with the U.S. economy. People may be reluctant to buy motorcycles because of high unemployment and declining home values. But the company also said it experienced production inefficiencies at its York, Pa., manufacturing plant as it transforms the complex into a more efficient operation.

That raised a question from an analyst on the company's conference call about whether the transition in York hurt motorcycle sales.

CEO Keith Wandell addressed the concern.

QUESTION: When you think about the disruptions taking place at York, do you think that the lack of product hurt retail sales during the quarter? Certainly in our conversations with dealers it seems like these guys are clamoring for Touring bikes. Anecdotally, are you seeing that?

ANSWER: Yes. Overall, dealers are certainly clamoring for product, and I think more acute on the Touring side ... with our strategy of limiting new bike supply to improve the price gap between new and used, and we're seeing that happen in the quarter. So if the question is: 'Are we missing any sales because of tight inventories?' I don't think that it's significant, and if we are, we don't believe we're losing them to the competition. ... We are seeing some customers wait to get the exact model and color that they've wanted, and it's going to take a little bit of time to get that as the dealers go throughout the dealer network or they wait for the bike to be shipped.