Harley Davidson 2012 Annual Report Download - page 7

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The Company also uses its website (www.harley-davidson.com) to market its products and services.
Harley-Davidson Distribution – The Company’s products are retailed through an independent dealer network, of which
the majority sells Harley-Davidson motorcycles exclusively. The Company’s independent dealerships stock and sell the
Company’s motorcycles, P&A, general merchandise and licensed products, and perform service for the Company’s
motorcycles. The Company’s independent dealers may also have secondary retail locations (SRLs) to meet additional retail and
service needs of the Company’s riding customers. SRLs also provide P&A, general merchandise and licensed products and are
authorized to sell and service new motorcycles. The Company’s independent dealers also sell P&A, general merchandise and
licensed products through “non-traditional” retail outlets. The “non-traditional” outlets, which are extensions of the main
dealership, consist of Alternate Retail Outlets (AROs) and Seasonal Retail Outlets (SROs). AROs are located primarily in high
traffic locations such as malls, airports or popular vacation destinations and focus on selling the Company’s general
merchandise and licensed products. SROs are located in similar high traffic areas, but operate on a seasonal basis out of
temporary locations such as vendor kiosks. AROs and SROs are not authorized to sell new motorcycles.
The Company’s North American region consists of the United States and Canada. In the United States, the Company
distributes its motorcycles and related products to a network of independently-owned full-service Harley-Davidson dealerships
and the Overseas Military Sales Corporation, an entity that retails the Company’s products to members of the U.S. military. The
Company distributes its motorcycles to its dealers in the U.S. based on dealer orders but subject to an allocation system that the
Company designed to be forward-looking and market-driven to align the distribution of motorcycles with the demand in
individual dealer markets. The allocation system can affect the number of units of particular models that dealers are able to
order and the timing of shipments to dealers. In Canada, the Company sells its motorcycles and related products at wholesale to
a single independent distributor, Deeley Harley-Davidson Canada/Fred Deeley Imports Ltd., which in turn sells to independent
dealers in the Canadian market.
The Company’s operations in the EMEA region are managed out of its Oxford, England regional headquarters. In the
EMEA region, the Company distributes all products sold to independent dealers through its subsidiaries located in Austria,
Czech Republic, Dubai, France, Germany, Italy, Netherlands, Russia, South Africa, Spain, Switzerland and the United
Kingdom and three independent distributors located in Greece, Sweden and Finland.
The Company’s operations in the Asia-Pacific region are managed out of its Singapore regional headquarters. In the Asia-
Pacific region, the Company distributes all products sold to independent dealers in Australia, China, India and Japan through
subsidiaries in those countries. The Company distributes all products sold to independent dealers for the remaining Asia-Pacific
markets in which its motorcycles are sold from its U.S. operations.
The Company’s operations in the Latin America region are managed out of its Miami, Florida regional headquarters. The
Company distributes all products sold to independent dealers in Mexico and Brazil through subsidiaries in those countries. The
Company distributes all products sold to independent dealers for the remaining Latin American markets in which its
motorcycles are sold from its U.S. operations.
The following table includes the number of worldwide Harley-Davidson independent dealerships by geographic region as
of December 31, 2012:
North America Region EMEA
Region Asia-Pacific Region Latin America Region Total
United States Canada
Full Service Dealerships and SRLs 695 73 371 281 47 1,467
Non-Traditional 87 5 14 1 30 137
Outside of the U.S., the Company’s strategy calls for the international dealer network to open 100 to 150 new dealerships
from the end of 2009 through the end of 2014. Through December 31, 2012, the Company added 93 new international dealers.
This excludes international dealers closed in the normal course of business.
Retail Customer and Dealer Financing – The Company believes that HDFS, as well as other financial services
companies, provide adequate financing to Harley-Davidson independent distributors, dealers and their retail customers. HDFS
provides financing to Harley-Davidson independent dealers and the retail customers of those dealers in the U.S. and Canada.
HDFS also provides financing to the Company’s Canadian distributor. The Company’s independent distributors, dealers and
their retail customers in the EMEA, Asia-Pacific and Latin America regions are not financed by HDFS, but have access to
financing through other established financial services companies, some of which have licensing or branding agreements with
the Company.