For the last roughly 5 years, the powersports division of Honda (as well as the other Japanese OEMs) has been in drastically red ink; more so in Canada than the US but still bad. The actual m/c division of Harley Davidson has not faired much better, and actual corporate profits/losses, if you look at the "actual" vehicle registrations from MMIC and not what they report in the board room, (which includes thousands of units sitting in dealerships but not actually sold to consumers) and HD hasn't faired much better. It's the other divisions of the companies (Honda's auto side, HD's apparel and accessories/finance, as well as the multitude of other divisions they all operate) that keeps the corporations solvent (or at least afloat). Harley also has the dubious honour of having a CEO that is NOT a motorcycle man, but a bean counter (and a poor one at that) only. That's why the movers and shakers at Harley are investigating so many other options for building their bikes (can you say 'off shore'?) and for support manufacturing. It's also why Honda shifted porduction of the Wing, VTX and several other entities back to the newer, more efficient plant in Kamamatsu. Marysville was no longer large enough or efficient enought to continue and an upgrade was actually more expensive (for the end result) than the build on the new facility in Japan. When things finally do get turned around in Japan (not just for Honda) after all the resultant quake issues, production will actually increase in efficiency and consumer pricing wil benefit. Just not overnight. If you want to draw a parallel, look at General Motors. While it may appear nice on the surface to keep producing the iconic Corvette and the still popular (in it's new guise) Camaro, those two vehicles alone cost the company more in R&D and production costs than the rest of the lines do (percapita sales). How's that for efficient?
Unless you are a senior exec (and maybe not even then) does anyone have a hard and fast figure just exactly any motorcycle costs the manufacturer to build before it's released to the consumer stage. There are so many contributing factors than none of us would ever fully understand how they come up with a net cost. I know what I see on my invoices for the whole product line, but I have no real idea what the breakdown sheets in the individual models actually say.
I do know from a lifetime of business experience that the facets are many and varied. If a widget costs (in straight dollar layout) $.25 and you sell it for $.33 that's a gross proffit of 25% on cost. On selling that drops to 20%; same dollars different outlook. However that is not your actual cost. Add in handling, staffing, building and utility figures (that's called overhead btw) and suddenly that margin drops drastically. Most businesses cost about 15% of their sales figures just to keep the doors open. That leaves either 5 or 10% of that original margin to survive on. Then out of that you have to pay taxes, which at corporate levels can exceed 40%. That leaves nickels and dimes folks. And that's before you hire an accountant to tell you whether you made a living or not. That's very basic, and it's not all that attractive.
Was looking at what else 27 grand would buy. Full size trucks, cars, trailers ect.. How much profit do you think Mother Honda makes on a Wing? Most of the materials are not state of the art like the Garmin GPS, 10 year old designed Motor and transmission and other fine parts that they use. I think it's is like going to a very expensive fine dinning restaurant and getting very little food. Their cars & trucks seem to take a lot more raw material to me to make but the cost price point is very close to the same. What do you guys think? Looks like they charge what the market will pay. Oh by the way Just traded in Harley CVO for the 2012 Wing level 3 and they are even worse. Big $$$$
