Harley cuts production

Harley-Davidson – the bike firm that makes more money than the world’s biggest car maker – is showing signs of a slow-down in its stratospheric growth.

It has announced it is reining-in production – despite another record revenue and earnings report for the first quarter of 2005. The move was announced by incoming CEO Jim Ziemer who takes up his role at the end of this month.

It should mean there will be no glut of bargain Harleys cluttering showrooms come June when the 2006 models come out. It’s also good news for Harley owners in that it should support used bike prices.

Ziemer is still expecting 2005 to be “our 20th consecutive record year.” But admits that US sales have been flat – falling short of Harley;s hopes for growth. To make sure demand continues to outstrip supply production is being reduced from 339,000 bikes for the year to 329,000. But that’s still up on 2004 when 317,000 Harleys were built.

The market hasn’t been impressed and the price of Harley shares in the States have slipped.

Bike sales (and related products) only account for 37.6% of Harley’s revenue.