Harley Davidson 2013 Annual Report Download - page 7

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In 2011, the Company launched a new global Harley-Davidson Authorized Tours Program that offers Harley-Davidson
riders the opportunity to experience riding opportunities worldwide. Riders can also rent Harley-Davidson motorcycles
worldwide from participating dealers through the Company’s Authorized Rentals Program.
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 on Harley-Davidson
motorcycles. The Company’s independent dealers may also have secondary retail locations (SRLs) to meet additional retail and
service needs of the Company’s 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 and
government contractors. 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, Greece, Italy, Netherlands, Russia, South Africa, Spain, Switzerland and the United
Kingdom and an independent distributor located in Sweden.
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 shipped from its U.S. and Singapore 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, 2013:
North America Region EMEA
Region Asia-Pacific Region Latin America Region Total
United States Canada
Full Service Dealerships and SRLs 696 69 371 271 51 1,458
Non-Traditional 92 5 20 8 29 154
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, 2013, the Company added 118 new international dealers. This excludes
international dealers closed in the normal course of business.
The Company launched a new eCommerce business model during 2013 for Parts and Accessories, General Merchandise,
and related products and services to reach both outreach and core customers. The Company's new eCommerce model provides
an online storefront, product merchandising, digital marketing, inventory management and order fulfillment, returns processing
and customer care. Retail internet orders are sold by participating authorized Harley-Davidson dealers. Dealers also handle any
after-sale services that the customer may require.