Harley Davidson 2012 Annual Report Download - page 4

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limited-edition, factory-custom motorcycles through its Custom Vehicle Operation (CVOTM) program. The Company’s Harley-
Davidson engines range in displacement size from 883cc to 1802cc.
The total heavyweight motorcycle market is comprised of the following categories:
• Traditional (a basic motorcycle which usually features upright seating for one or two passengers);
• Sportbike (incorporates racing technology, aerodynamic styling, low handlebars with a “sport” riding position and
high performance tires);
• Cruiser (emphasizes styling and owner customization);
• Touring (incorporates features such as saddlebags, fairings, or large luggage compartments and emphasizes rider
comfort and load capacity); and
• Dual (designed with the capability for use on public roads as well as for off-highway recreational use).
The Company competes in the touring and cruiser categories of the heavyweight motorcycle market. The touring
category of the heavyweight market was pioneered by the Company and includes the Harley-Davidson Touring family of
motorcycles, including three-wheeled motorcycles, which are generally equipped with fairings, windshields, saddlebags and/or
Tour Pak® luggage carriers. The cruiser category of the market includes motorcycles featuring the distinctive styling associated
with classic Harley-Davidson motorcycles and includes the Company’s Dyna, Softail, V-Rod® and Sportster motorcycle
families.
Competition in the heavyweight motorcycle market is based upon a number of factors, including price, quality, reliability,
styling, product features, customer preference, warranties and availability of financing. The Company’s motorcycle products
continue to generally command a premium price at retail relative to competitors’ comparable motorcycles. The Company
emphasizes quality, reliability, customization and styling in its products and generally offers a two-year warranty for its
motorcycles. The Company promotes a comprehensive motorcycling experience across a wide demographic range through
events, rides, rallies including those sponsored by Harley Owners Group® (H.O.G.®). The Company considers the availability
of a line of motorcycle parts and accessories and general merchandise and the availability of financing through HDFS as
competitive advantages.
In 2012, the U.S. and European regions accounted for approximately 80% of the total annual independent dealer retail
sales of new Harley-Davidson motorcycles. The Company also competes in other markets around the world. The most
significant other markets, based on the Company's retail sales data, are Canada, Japan, Australia and Brazil.
Harley-Davidson has been the historical market share leader in the U.S. heavyweight motorcycle market. Competitors in
the U.S. market offer heavyweight motorcycles in all categories of the market including products that compete directly with the
Company's offerings in the touring and cruiser categories.
According to the Motorcycle Industry Council, the touring and cruiser categories accounted for approximately 81%, 84%
and 85% of total heavyweight retail unit registrations in the U.S. during 2012, 2011 and 2010, respectively. During 2012, the
heavyweight portion of the market represented approximately 62% of the total U.S. motorcycle market (street legal models
including both on-highway and dual purpose models and three-wheeled vehicles) in terms of new units registered.
The following chart includes U.S. retail registration data for Harley-Davidson motorcycles for the years 2010 through
2012:
U.S. Heavyweight Motorcycle Registration Data(a)(b)
(Units in thousands)
2012 2011 2010
Total new heavyweight motorcycle registrations 282.0 271.0 259.7
Harley-Davidson new registrations 161.3 150.9 142.7
57.2% 55.7% 54.9%
(a) Heavyweight data includes street legal 651+cc models. Street legal 651+cc models include on-highway and dual purpose models and three-wheeled
vehicles.
(b) U.S. industry data is derived from information provided by Motorcycle Industry Council (MIC). This third party data is subject to revision and update.
The retail registration data for Harley-Davidson motorcycles presented in this table may differ slightly from the Harley-Davidson retail sales data
presented in Item 7 of this report. The Company’s source for retail sales data in Item 7 of this report is sales and warranty registrations provided by
Harley-Davidson dealers as compiled by the Company. The differences are not significant and generally relate to the timing of data submissions to the
independent sources.