Harley Davidson 2010 Annual Report Download - page 4

To achieve our vision of expanded product leadership, the
transformation of our product development is focused on three
key areas:
One, reduce the time it takes to bring new products to market
through lean product development methodologies — taking
about 30 percent off the development clock.
Two, make sure our focus is laser sharp when choosing which
products to develop. At Harley-Davidson, we live and breathe
motorcycles, we ride with our customers and we have the best
talent in the industry — all of which are essential to product
development. But to make the best even better, we are gathering
even greater levels of consumer and dealer insights into our
product planning.
Three, increase our capacity to simultaneously handle more
product development initiatives, not as a result of a major
expansion of resources, but through the deployment of world-
class lean product development processes.
It’s all about being customer-led in our approach to products like
never before. It is exciting work, our teams are energized and
we’ve got some great things in the works that we look forward
to sharing in the future.
Expanding Our Strength Worldwide
We know from market share growth, along with our brand research
results and the feedback we get from customers everywhere, that
the Harley-Davidson brand is as strong or stronger than ever. Our
multigenerational, multicultural approach calls for us to continue
building on this unique strength, growing sales to our core customers
while growing sales to outreach customers at a faster rate. It also
calls for us to grow in international markets faster than we grow
in the U.S.
In 2010, international retail Harley-Davidson motorcycle sales
accounted for more than 35 percent of total sales and by 2014,
we expect the number to exceed 40 percent, compared to 25 percent
just four years ago. In Europe, we claimed the number two spot
in the heavyweight market in 2010 — no small feat in such a highly
competitive motorcycling culture.
We added dealer points in 13 developing markets in 2010,
including India, Russia, Mexico, Turkey, Jordan, China and Ecuador,
and for the rst time the number of full-service Harley-Davidson
dealerships outside the U.S. exceeded the number in the U.S.
We also have opened regional headquarters ofces in Singapore
for the Asia Pacic region and Miami for the Latin America
region, joining our longstanding EMEA headquarters in
Oxford, England.
In the U.S. we are the longtime heavyweight motorcycle market
leader and in 2010 we grew our share of the market to a record
54.9 percent. We also are the U.S. heavyweight market share leader
among young adults ages 18-34, women, and African-American
and Hispanic riders .
One Company, One Team, One Direction
As we look back on 2010, we feel good about our results and the
progress we have made. We also know that market conditions in
many places remain challenging and we have more to do if we are
going to take full advantage of the many opportunities we see.
Our progress is possible only through the many extraordinary
contributions of our employees, dealers and suppliers. We
have dealt with a lot of change in a short amount of time and our
employees are truly doing an outstanding job, including great
leadership from the elected union ofcials. Our dealers are also
to be recognized for everything they are doing to bring a premium
Harley-Davidson experience to customers in a challenging
business environment.
Over the past year, I have had many opportunities to meet
with our dealers in the U.S. and abroad, ride with our customers
and talk with our employees. Everywhere I go, I never cease to be
amazed by the pride and passion that’s associated with our
motorcycles and our brand.
As we look to the rest of 2011 and beyond, we are condent
that, leaning forward to address the challenges and create new
opportunities, we will continue to make great progress and
gain momentum.
Keith E. Wandell
President & Chief Executive Ofcer
Transforming Manufacturing
Beginning with the implementation of a new labor agreement at
our York, Pa., assembly operations in the rst quarter, and followed
by the ratication of new labor agreements at our Wisconsin
operations last summer and just recently in Kansas City, we are
moving decisively forward with the transformation of our entire
approach to manufacturing. When the new production system is
fully implemented, Harley-Davidson will have a best-in-class,
team-based, lean operating structure across all our operations,
built on a foundation of continuous improvement and
standardized processes.
Much more than a way to reduce costs, the new production
system is all about getting customers the motorcycles they want,
when they want them. Through this transformation, we will gain
a much better ability to adjust to seasonal or other uctuations
in demand and changes in customer model preferences, and
enhance our ability to make “every customer a custom” through
initiatives like the recently launched H-D1™ factory
customization initiative.
Transforming Product Development
Our motorcycles and the experiences they provide have always
been at the heart of our market leadership. Nothing will
contribute more to our ability to grow and expand our reach still
farther than bringing new generations of products to market.
It is one of my highest priorities as CEO, and in 2010 we began the
heavy lifting to fundamentally transform our entire approach to
product development.
Whether in the ongoing evolution of our iconic V-Twin motor-
cycles, the development of alternate approaches to new
motorcycles for the global market, or the deployment of advanced
technologies, we are intent on further asserting our leadership
as a global force on two-wheels.
16.7% Europe [$699.5]
17.9% Parts & Accessories [$749.2]5.6% Japan [$234.2]
6.2% General Merchandise [$259.1]3.3% Australia [$136.2]
3.8% Canada [$157.6]
67.5 % U. S. [$2,818.0] 75.5% Motorcycles [$3,153.3]
0.4% Other [$15.0]3.1% Rest of World [$131.1]
04 Lean Forward 05
“ Two primary areas of focus under our strategy are the transformations
currently under way in manufacturing and product development.”
Harley-Davidson, Inc. 2010 Annual Report
Motorcycles and
Related Products Segment
REVENUE DISTRIBUTION
BY REGION
$4,176.6
dollars in millions
Motorcycles and
Related Products Segment
REVENUE DISTRIBUTION
BY PRODUCT LINE
$4,176.6
dollars in millions