At Harley and beyond, strong dollar offers competition discount edge
By Nick Carey
CHICAGO, April 21 (Reuters) - When iconic motorcycle maker Harley-Davidson Inc warned on Tuesday that discounting from foreign rivals would dent its profits, the message resonated beyond the motorcycle business.
From cars to construction equipment, the impact of the strong dollar is a big problem for U.S. companies selling overseas. But the U.S. dollar's recent surge to multiyear highs against major currencies, such as the euro and yen, has also become a challenge to their efforts to protect market share on home turf.
Harley's U.S. market share slipped nearly five percentage points in the first quarter to 51.3 percent as competitors offered discounts of up to $3,000 per bike and slashed suggested retail prices by up to 25 percent.
Honda Motor Co Ltd and Suzuki Motor Corp both currently offer $1,000 cash back on selected models. Suzuki has cut the suggested retail price on 13 models and Honda is offering low-interest financing.
Harley says it will not compete on price to protect its brand, a declaration welcomed by industry analysts.
"They (Harley) are taking a reasonable long-term view of the market," said Michael Millman, founder of Millman Research Associates in New Jersey. "They want to maintain their pricing and their image and will have to take some of the competitive knocks that go with that."
AUTOS, HEAVY EQUIPMENT HIT Continued...