Harley-Davidson, inc. Essay
Motorcycles have been in demand nowadays when the price of transportation continues to rise. The continued rise of the oil prices from the Oil Exporting Countries results in a crisis for fuel that seems to be endless. (Bousquet) With this crisis, people have been trying to find ways on how to reduce the cost of attaining a lower cost of fuel consumption. The question of whether to purchase a motorcycle today continue to rage as measures for fuel conservation are implemented, like the use of carpooling schedules.
I. The Industry The motorcycle industry faced a big problem in 2003 as its growth slowed down to 5%. (Gerts) This is due to the change in preference of the consumers, shifting from the motorcycles to the automobiles like cars and SUVs. The prediction of the slow growth rate, however, did not cover the suddenly positive exponential growth of the industry, especially in Indonesia and China. The bulk of the motorcycle demand for motorcycles is in Asia.
As mentioned by Gerts in 2005, quoting the Freedonia Group’s prediction for market distribution for 2007, Asia takes the 85% of the market demand; with Europe and the United States only accounting for 5% and 3% respectively. (Gerts)
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Harley-Davidson made ties in 2004 with a Chinese manufacturer to learn the dynamics of the Chinese market; in return, the American firm would share its philosophies and strategies with the Chinese firm. (Harley-Davidson) The move makes use of the strategy of Harley-Davidson to maintain its grasp of the market shares it has in Asia. The growth of the motorcycle industry, as of 2005, was not as surprising according to experts. (Arabe) The 24% growth in sales as of 2005 was due to the prevailing trends in the motorcycle industry that made Honda cling to the top spot in the industry.
Furthermore, the growth also may be attributed to the fact that the market for motorcycles continue to expand, even capturing the female gender, which usually do not favor the motorcycle as a choice of vehicle during the past years. The key behind the success of the motorcycles lies on several market and economic factors. First is that the success in the earlier part of the 90’s was due to the fact that the motorcycle is considered to be connected to fashion. (Cherng) Another reason is that motorcycles are purchased in Asia, especially Japan, as a mode of recreation in addition to the main function of transportation.
(Cherng) The use of the product in ways other than transportation greatly affects the market trend by increasing its demand as the consumer views the product as necessity. Certain factors to be considered in the industry is the cultural, demographical and market conditions that affect the demand for the motorcycles. Studies show that the demographic and cultural factors may be negligible as a wide variety of people owns a motorcycle. (Cherng) The people who purchase the mototrcycle basically came from every aspect of the society.
Women, recently, have been growing fond of owning motorcycles, too. (“Harley-Davidson, Inc. Unaudited Historical Data”) Ther seem to be no difference in the market factors as well, since the markets are diverse in almost any country of study. The industry for motorcycles have spanned a wide variety of consumers that it is hard to predict any trend or change in the present situation of the market with respect to these factors. The major European markets that are involved in the motorcycle industry through the years would be Germany and the United Kingdom.
The growth trends in the German country is not on the good side of things as the market shares continue to dwindle, owing to the fact that mini-cars are more preferred than motorcycles. The same goes for the collapse of the motorcycle industry of the United Kingdom, with production of motorcycles approaching the zero mark in the 1990’s. However, the collective European Region shows promise, although we may have to consider the number of countries sharing the 5% of the market shares that we have mentioned earlier.