Harley's $35,000 Cruisers Caught in Credit Crunch

[marmar]

from Bloomberg:



Harley's $35,000 Cruisers Caught in Credit Crunch (Update3)

By Alan Ohnsman

Oct. 15 (Bloomberg) -- Advertisements that Harley-Davidson Inc. has been running on the Web since May say to forget the recession and buy a bike.

``Screw it,'' says an ad for the largest U.S. motorcycle maker. ``Let's ride.''

The credit crunch means fewer consumers will be taking the Milwaukee-based company up on its offer. Wholesale shipments of Harleys in the third quarter are down from 2007 and may have fallen below the maker's lowest estimate of 74,000, according to Erik Kolb, an equity analyst for Standard & Poor's in New York.

``They sell an expensive, discretionary item but we're in a period when people aren't making such purchases,'' Kolb, who recommends holding the shares, said in an interview.

List prices for Harleys range from $7,000 to $35,000, and a cruiser can command more than $40,000 when customized with accessories including chrome Screamin' Eagle exhaust pipes.

Tight credit and consumer anxiety are chilling demand for such leisure products, Citigroup analyst Greg Badishkanian said in an Oct. 12 report. U.S. Harley sales fell as much 15 percent last quarter and may be depressed into 2009, said Badishkanian, who rates the shares ``sell/medium risk.''

Harley may report earnings per share of 78.5 cents when it releases third-quarter results tomorrow, according to the average estimate of 16 analysts surveyed by Bloomberg. That would be the lowest in four quarters and a 27 percent drop from a year ago. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aULFXBEO3RWU