Harley Davidson 2013 Annual Report Download - page 4

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The street-legal motorcycle market is comprised of the following categories:
• Standard (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 some off-highway recreational use).
The Company competes in the touring and cruiser categories of the motorcycle market. The touring category of the
market was pioneered by the Company and includes the Harley-Davidson Touring platform 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®, Sportster® and Street motorcycle platforms.
Competition in the motorcycle markets in which the Company competes is based upon a number of factors, including
product capabilities and features, styling, price, quality, reliability, warranty, availability of financing, and quality of dealer
network. The Company believes its motorcycle products continue to generally command a premium price at retail relative to
competitors’ motorcycles. The Company emphasizes remarkable styling, customization, innovation, sound, quality, and
reliability 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, and 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 offered by a global network of premium
dealers as competitive advantages.
In 2013, the U.S. and European regions accounted for approximately 79% 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. 601+cc motorcycle market. Competitors in the
U.S. 601+cc market offer 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 (MIC), the touring and cruiser categories accounted for approximately
79%, 78% and 80% of total 601+cc retail unit registrations in the U.S. during 2013, 2012 and 2011, respectively. During 2013,
the 601+cc portion of the market represented approximately 86% 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 2011 through
2013:
U.S. Motorcycle Registration Data(a)(b)
601+cc (Units in thousands)
2013 2012 2011
Total new motorcycle registrations 305.9 299.4 289.9
Harley-Davidson new registrations 167.8 161.3 150.9
54.9% 53.9% 52.1%
(a) Data includes street-legal 601+cc models. Street-legal 601+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.