Harley Davidaon Marketing Plan

subject = Marketing/Business
title = Harley Davidaon Marketing Plan


is the largest market share holder of motorcycles over 750cc in the United
States. After the expansion of our production and distribution capacity, we
will be in the position to meet the increasing demand for our motorcycles and
other products.
Growth potential appears very good especially in the overseas
market. Gaining a larger market share in these area may require a further
increase in production and distribution capacities. We must plan for expansion
now and continue to grow as a company.

In Milwaukee,
William Harley, 21, and Arthur Davidson, 20, began experiments on taking the
work out of bicycling. They were soon joined by Arthur's brothers, Walter and
William. Many changes were made to the engine design before its builders were
satisfied. After the new looped from was finalized, they were ready to begin
production. In 1903 they produced three motorcycles. Harley-Davidson erected
its first building the current Juneau avenue site in 1906 and incorporated
in 1907. In 1907 Harley-Davidson produced 150 motorcycles.

motorcycle market over 750cc has been increasing over the last five years.
The Harley-Davidson 1996 model year production line, sold though a world wide
network of more than 1,000 dealers, includes 20 cruiser, factory custom and
touring motorcycles, as well as police motorcycles. Harley-Davidson benefits
form having one of the world's most recognized and respected brand names and
our motorcycle model names are among the best known in the industry:
Competition and Market share
This chart shows the competition and market
share for 1995 in the United States:

Current Market Situation
sales for 1995 of $1.4 billion were $191.6 million, or 16.5%, higher than net
sales for 1994. Net income and earnings per
share from continuing operations
were $111.1 million and $1.48, for 1995 as compared with $96.2 million and
$1.26, for 1994. Net income and earnings per share from discontinued operations
were $1.4 million and $.02, for 1995 as compared with $8.0 million and $.11,
for 1994, which included a $4.6 million, or $.06 per-share, one-time tax benefit
related to the legal reorganization of Holiday Rambler. On January 22, 1996,
the Company announced its strategic decision to discontinue the operations
of the Transportation Vehicles segment in order to concentrate its financial
and human resources on its core motorcycle business. The Company does not anticipate
a loss on the discontinuance of the Transportation Vehicles segment. The results
of the Transportation Vehicles segment have been reported separately as
operations for each year presented. On November 14, 1995, the Company acquired
substantially all of the common stock and common stock equivalents of Eaglemark
Financial Services, Inc. that it did not already own. The purchase price was
approximately $45 million, which was paid from internally generated funds and
short-term borrowings. The Company has included the results of operations of
the Financial Services segment ($3.6 million) in its statement of operations
for the year ended December 31, 1995 as though it had been acquired at the
beginning of the year and deducted the preacquisition earnings as part of non-operating
expense. The Company increased its quarterly dividend in September from $.04
per share to $.05 per share which resulted in a total year pay out of $.18
per share.
Units Shipped and Net Sales
The Motorcycles and Related Products
(Motorcycles) segment's net sales increased 16.5% over 1994 due primarily to
a 9,293 unit (9.7%) increase in motorcycle shipments, as well as a 14.0% increase
in its Parts and Accessories business. The increase in motorcycle shipments
is the result of ongoing implementation of the Company's manufacturing strategy
and efforts to

satisfy demand. The manufacturing strategy is designed to
increase capacity, adjust to changes in the market place and further improve
product quality while reducing costs.
Sales of Buell motorcycles (which
are distributed through select Harley-Davidson dealers) increased to $14 million
in 1995 as compared to $6 million in 1994.
The Company began 1995 at a scheduled
motorcycle production rate of 395 units per day. As the implementation of the
manufacturing strategy continued, the rate increased to 470 units per day by
the end of the year. The Company exceeded its production goal of 100,000 units
in 1995 and anticipates 1996 production will reach at least 115,000 units.
The Company is currently reviewing alternative sites for the construction of
a new manufacturing facility to enable it to achieve its long-term goal of
doubling motorcycle production by 2003.
Year-end data indicates that the
domestic (United States) motorcycle market continued to grow throughout 1995.
Compared to 1994, industry registrations of domestic heavyweight (engine displacements
in excess of 751cc) motorcycles were up 11.3% . The Company ended 1995