Global Motorcycle Industry 2003

STVP-2003-003 [Rev. January 17, 2004]

This case was written by Eric Cherng, Graduate Student, under the supervision of Thomas J. Kosnik, Consulting Professor, Stanford School of Engineering as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It is a sequel to Note on the Global Motorcycle Industry 1995, STVP‐1998‐002

Copyright © 2003 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). To request permission to reproduce materials, contact 1‐650‐723‐2973, or email Professor Tom Kosnik, Director, Stanford Technology Ventures Program Case Development Factory at [email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Stanford Technology Ventures Program.

The Global Motorcycle Industry – 2003

Why do people ride? Itʹs almost impossible to explain. Because there are roads and distant towns. Because we share a sense of adventure. Because we have the freedom to do it. For the commuter, motorcycles receive freeway access benefits, get great fuel mileage and are easy to park. For the touring rider, motorcycles bring you into the world instead of enclosing you from it. Others enjoy the challenge of riding, leaning into turns and feeling the motor beneath them. Motorcyclists connect with other riders in a way that goes beyond mere transportation, which is why many riders attend events and rallies. And everyone who rides a motorcycle does so because itʹs fun.

~ Harley‐Davidson Website 2003, Reason to Ride (http://www.harley‐davidson.com)

From 1975 to 2003, Honda, Kawasaki, Suzuki and Yamaha continued to dominate the motorcycle industry, although several European and American companies (BMW, Ducati and Harley‐Davidson) established strong positions in niche markets. Important economic and political developments in various regions, including the strong growth in Asia, changed the playing field significantly and forced the manufacturers to adjust. For low‐end models, manufacturing operations shifted closer to emerging markets in Taiwan, Thailand, Vietnam and India. As a result, the motorcycle industry evolved from an export‐based operation in the 1960s to a truly global business. The maturing economies in North America, Western Europe, and Japan increased the demand for high‐end recreational models, while the developing economies in South East Asia and South America created a need for easily assembled, inexpensive transportation. Although Japanese makers entered the high‐end market in the 1970s and 80s, several nice players remained dominant in this segment.

Harley‐Davidson rebounded from near disaster in the early 1980’s to become the market leader in large custom motorcycles. The turnaround was the result of a massive corporate restructuring effort which began in 1981 when ownership of the company was returned to the hands of a small group of Harley executives. Content to operate in the large‐motorcycle market, Harley‐Davidson found success in Japan, the United States and several European countries. Honda, by far the largest player in the motorcycle marketplace, controlled North America and Japan, and was strategically positioned to take over emerging markets. With its strength in

STVP 2003‐003 Global Motorcycle Industry 2003

scooters and sport bikes, Honda was prepared to satisfy the demand for cheap transportation in areas such as Vietnam, China, and Brazil.1 In sync with its automobile strategy, BMW chose to focus on the luxury and sport touring segments, and achieved a strong position in Europe. By emphasizing safety technology and an adventurous image, BMW sought to attract recreational riders willing to pay for comfort and a premium label. In 2003, senior executives of Harley‐Davidson, Honda and BMW gathered in their respective boardrooms to discuss the challenges and opportunities in the evolving global marketplace, and to develop their competitive strategy for the road ahead.

Motorcycles

Motorcycles were often classified by engine capacity as lightweight (50cc ‐ 250cc), middleweight (251cc ‐ 750cc), heavyweight (751cc ‐ 1199cc) and super heavyweight (1200cc and up).2 Motorcycles were also divided by types of use, generally separated into four groups: standard, which emphasized simplicity and cost; performance, which emphasized racing and speed; touring, which emphasized comfort and amenities for long‐distance travel; and custom, which emphasized styling and individual owner customization. The standard models tended to have the smaller engines, while the performance motorcycles often had an engine capacity of more than 251cc. The touring models typically had a comfortable seating position and their engines ranged from the middle to super heavyweight types. The custom models generally have the high output (super) heavyweight engines but the styling of these motorcycles was the key to their appeal.

Figure 1: Approximate Price RangesClass Price Range Engine Size

Standard $2,700 - $4,000 50cc - 250ccPerformance $5,000 - $6,000 251cc - 1200+cc

Touring $10,000 - $18,000 251cc - 1200+ccCustom $12,000 - $25,000 751cc - 1200+cc

Source: Various dealerships 2003 In developing economies, the demand for motorcycles was dominated by the low cost

models with a small engine capacity. The need for cheap transportation was initially satisfied by the purchase of a scooter or a moped. The transfer to a motorcycle, often a major household investment, was made as the income level increased. Lightweight model purchases often led to later purchases of middleweight or larger motorcycles. In developed economies, the motorcycle buyer often had dual purposes in mind ‐‐ both transportation and recreation ‐‐ and was willing to invest more in a motorcycle. Thus the demand for the heavy and super heavyweight custom, touring and performance models was significantly higher than in the developing countries.

1 Based on 6/5/2003 e‐mail from Tom Blinn, Honda Motorcycles account manager at Dailey and Associates 2 It should be noted that the (legal) classification of motorcycles often differ from country to country

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Honda CBR600RR (Performance) Harley‐Davidson Fatboy (Custom)

The Japanese makers dominated the worldwide market for the light and middleweight models. Although Harley‐Davidson regained its leadership role in the heavy and super heavy market segment with its custom motorcycles, the Japanese and European makers were still very active in this growing and very profitable market. BMW aimed for the touring bikes, Ducati focused on the performance models, and the Japanese had both. Harley Davidson dominated the custom segment, though the Japanese competition had “Harley‐look‐a‐likes” on the market for about 20 years, indicating the vast appeal for the “American Retro‐Cruiser” pioneered by Harley‐Davidson. Some of the models competing with Harley for this market were Honda’s “Gold Wing”, “Shadow” and the newly released 1996 “Valkyrie” as well as others such as Kawasaki’s “Vulcan”.

Honda Gold Wing Kawasaki Vulcan

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BMW R 1150 RT

Consumers

The Average Biker in the U.S. The Hollywood myth of the young and wild motorcycle rider became less and less a

reality at the turn of the millennium, according to Motorcycle Industry Council statistics. Even in the 1990s, riders had become more mainstream and were less likely to be a part of some counterculture motorcycle gang. “The end of the road for today’s motorcyclist is just as likely to be a boardroom as a burger joint,” said Beverly St. Clair Baird, Managing Director of Discover Today’s Motorcycling, a public awareness campaign of the Motorcycle Industry Council.3 The motorcyclist in 1998 was male, 38 years old, married, had attended college and earned a median income of $44,250 – compared to about $42,800 for the average American household (Exhibit 1).4

The average income of the motorcyclist in 1998 had more than doubled since 1980 ($17,500). In 1980, less than 2% of riders made over $50,000 per year. In 1998, more than 30% of riders had attained that income level. Riders in the late 90s were also much older, in contrast to the average rider age of 24 in 1980. They used their bikes more for leisure and recreation than had the riders of the early 80s. The typical rider was interested in the outdoors. In surveys about their other interests besides motorcycling, fishing and hunting topped the list. The demographic profile showed that motorcyclists came from all walks of life and a variety of occupational, educational and economic backgrounds.5

Motorcycle fatalities had risen by more than 50% between 1997 and 2001. Despite state helmet laws and increasing enrollment in rider training programs, the number of crashes had increased steadily since 1997. Although motorcyclists were likely to be more skilled and responsible than riders of the 1970s and 1980s, injuries were at an all‐time high by 2001.6

3 Motorcycle Industry Council, 1995 Statistical Annual 4 US Census 2002 (http://www.census.gov) 5 Motorcycle Industry Council, 1998 Statistical Annual 6 ibid

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Women Riders – an emerging force Women, though still less than 10% of the

American motorcycle‐owning population, accounted for 17% of all operators, and had been a growing segment of the industry. The AMA (American Motorcycle Association) had women members since 1907. In 1998, close to half a million women in the U.S. rode their own motorcycles, and one of every four new owners were female.7 The average female rider was 39 years old compared to her 38‐year old male counterpart. 64% of women riders were married and 56% completed some college. In contrast, 59% of male riders were married and 42% received some college education. More women riders worked in white collar occupations than male riders, and on average earned $3,500 more per year.8 Many women riders belonged to a riders club and were passengers for a few years before they purchased their first bike. Women riders

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used their motorcycle time for either long distance (36% of riding time) or for local street use (31%). Only 10% of their riding time was spent ting or running errands. More women’s families positively supported their riding than ilies of male riders (64% vs. 55%), however, more men’s friends than women’s friends ted their riding.

n Trends Motorcycling was a major fashion trend in the late 1990s. The sales of motorcycles ed more than 200% from 1991‐2001, and motorcycle accessories, fashions and parts d this upward trend. Many non‐motorcycle riders or owners invested in motorcycle s. Men spent more on average on motorcycle fashions than women ($300 per year for men for women).9

et Trends

In industrialized wealthy economies such as Japan, the United States and Europe, ycles were often purchased for recreation in addition to basic transportation. In ing economies and others with low income per capita, motorcycles or smaller two‐rs were purchased primarily for basic transportation, and the market was distinctly t. Historically, large touring bikes, cruisers and racers sold almost exclusively in the economies while motorcycles with small engine displacement and mopeds made up the jority of sales in the developing nations. Decreasing trends in the overall market in some were due in large part to replacement of two‐wheeled vehicles by automobiles as the es became more affluent.

er and Associates 1998 Motorcycle Competitive Information Study cle Industry Council Survey, Irwin Broh & Associates, 1998 cle Industry Council Survey, Irwin Broh & Associates, 1998


According to the 2002 projections of the United Nations, the world’s population was expected to grow from 6.1 billion in 2000 to 7.5 billion in 2020. The growth of developing nations throughout Africa and Asia increased the possibility of overshadowing mature motorcycle markets of Japan and the West. Many rapidly developing economic powers in Southeast Asia had populations which were growing at a much faster pace than their European and Northern American counterparts.

Figure 2: World Population Projections, 2000 & 2020

North America In 2001, there were nearly 14,000 retail outlets in the United States accounting for $12.4

billion in sales (including new and used motorcycles sales, parts, accessories, apparel and service). Sales of new motorcycles alone accounted for over $6.7 billion of the total, used motorcycles brought in some $1.7 billion. There were an estimated 4.9 million motorcycles registered for use in the United States in 2001. This was down from an all time high in 1980 of 5.7 million, but significantly higher than the 3.8 million registered bikes in 1995. Motorcycle registration required compliance with state and federal Motor Vehicle Safety Standards. Over one third of the nation’s motorcycles were concentrated in just five states: California, Florida, New York, Ohio and Texas. Roughly 13% of the motorcycles in the U.S. were in California alone. Overall, there was an average of 2.5 motorcycles per 100 people in the United States in 2001, up from 1.5 per 100 in 1995. Most motorcycles in the U.S. were registered for on‐highway use. Over half of these motorcycles had engine displacements over 749 cc, and more than 85% over 450 cc.

Figure 3: U.S. Motorcycle Population by Model Type Model Type 1998 1994 1990On-Highway 4,809,000 2,850,000 3,650,000Dual Purpose 565,000 400,000 660,000Off-Highway (Total) 1,196,000 550,000 750,000

On-Highway (Over 749 cc) 3,183,500 1,479,000 1,478,200On-Highway (450 - 749 cc) 995,500 867,400 1,215,500

Total Motorcycle Population 6,570,000 3,800,000 5,060,000Source: Motorcycle Industry Council, Statistical Annual 2002 GDP per capita in 2002 was approximately 32,000 USD, and 15 out of every 1000 people

owned a motorcycle.10 Although sales had been growing rapidly since 1998, most of the

10 World Bank Statistical Database, accessed through Stanford University, http://devdata.worldbank.org/dataonline/

Source: Population Division of the Department of Economic and Social Affairs of the United Nations

2000 World Population Distribution

Asia

Europe

Oceania Latin America and the Caribbean

Africa

2020 World Population Distribution

Northern America Northern OceaniaLatin America America

Africa and the Caribbean

Europe

Asia

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purchases were from older customers who were re‐entering the motorcycle market after a period of non‐activity. With the down economy, many of these people turned towards motorcycling as a means of escaping difficult times, boosting industry sales.11

Canada and Mexico had much smaller populations of motorcycles in the late 1990’s. Canada had about 400,000 motorcycles in use in 2001, and Mexico had only 270,000.12 Canada’s motorcycle population was down from over 500,000 in the 1980’s while Mexico had an increase of 24% since 1989 (218,000 motorcycles in use).13

Japan Japan had one of the highest motorcycle penetration rates of any country in the world. Like Europe, the Japanese relied heavily on motorcycles as a practical and affordable transportation device after World War II.14 For every 1000 people in Japan, 115 owned a two‐wheel vehicle, and 1 out of every 6 vehicles was a two‐wheeler.15 After a period of rapid growth in the 1950s and early 1960s, the annual growth rate of motorcycle sales in Japan began to level out. Every year since 1987, sales declined at the rate of approximately 1‐2% annually.

Japanese manufacturers suffered severely from the burst of the bubble economy in 1990. The expensive Yen forced them to shift production operation overseas to capitalize on low wages and close vicinity to regional markets. Overseas production had allowed the Japanese manufacturers several advantages. Their products were more tailored to the market needs within individual countries, while lower wages (in most countries) and the absence of import taxes helped them to reduce costs and keep prices low. The main Japanese companies increasingly customized their product lines in the countries to match the needs of the local markets.

Figure 4: USD/YEN Historical Exchange

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Production of motorcycles in Japan decreased from the early 1980s to the mid 1990s, due partly to this overseas manufacturing shift. Unit sales of all two‐wheeled vehicles in Japan were down from 2.4 million in 1983 to only 1.2 million in 1994, and dropped even further to 750 11 Based on 6/5/2003 e‐mail from Tom Blinn, Honda Motorcycles account manager at Dailey and Associates 12 US Department of Transportation (http://www.fhwa.dot.gov/policy/ohim/hs02/in3.htm) 13 World Motorcycle Facts and Figures, 1995 (Honda Motor Co.) 14 “Honda’s First Dreams, The Fledgling Honda Motor Company sets a path for its future,” American Honda Motorcycle Press Department 15 World Bank Statistical Database, accessed (http://devdata.worldbank.org/dataonline)

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million in 2001. The number of motorcycles in use in Japan was at an all time high in 1986 at 18.7 million and decreased to 13.7 million in 2001. The number of large motorcycles used in Japan (>250cc) had increased since 1975, reaching 1.3 million in 2001. Exports of Japanese motorcycles had decreased from a record high in 1981 of 4.3 million units to only 1.6 million in 2001. However, exports to the United States had increased from $920 million in 1996 to $2.1 billion in 2001. Imports from the U.S. were on the rise. In 1988, Japan imported close to 5 thousand motorcycle units. By 2000, this figure had grown to 14 thousand units.16 Taiwan was the second largest exporter of motorcycles to Japan behind the U.S. (See Exhibits 3‐6).

China China had the largest population of any country in the world, and with its rapidly

developing economy, also had an immense market potential. The sales of two wheeled vehicles in China was 3.3 million units in 1993 and grew to 12.4 million in 2002, but over 50% of the two‐wheelers manufactured and sold in China had less than 100 cc engine capacity. Production of motorcycles also rose dramatically through the 1980s and 1990s. In 2001, China produced 12.4 million units, compared to 49,000 units in 1980. However, only 280,000 of the units produced in 1994 were over 250 cc, and by 2001 this number had fallen to 67,000 units. Despite the apparent need for affordable transportation, only 26 out of every 1000 Chinese owned a 2‐wheel vehicle in 2001.

The competition among motorcycle manufacturers in China was fierce in 2002, fueled by the rapid growth rate of domestic as well as foreign demand. Although more than 130 enterprises were battling on the field, by 2002 the market had narrowed down 10 companies as the leaders. Furthermore, smaller manufacturers had begun merging together to achieve greater market power. Virtually all the sales in China were made by domestic producers, but many of these producers were 50‐50 joint ventures with the major Japanese motorcycle manufacturers.17

India India had a population of more than one billion people in 2000, making it the second

largest country in the world.18 Sales and manufacturing of two‐wheeled vehicles in India exploded from 1975 to 2001. Mopeds, scooters and motorcycles were the major modes of transportation in India. The total population of two‐wheelers in India in 2001 was over 25 million, compared with less than 1 million in 1975. India manufactured over 4.3 million motorcycles in 2001 compared with 70,000 in 1975.

A growing population and rising spending power contributed to increased sales of motorcycles in India. Valued at $2.2 billion USD and accounting for 80% of all vehicles sold, the two‐wheel vehicle segment was projected to grow at 10‐15% over the next 5 years.19 Coupled with poor road conditions across much of the country, rising urban populations further increased the attractiveness of motorcycles. In 2002, motorcycles accounted for roughly 66% of the two‐wheel vehicle market, up from 48% the previous year. Triggered by these conditions, the four main players competed fiercely on price to gain volume, and vigorously partnered with foreign companies to acquire technical expertise and market experience.

16 Japanese Automobile Manufacturers Association, 2002 17 Honda Motor Company 2003 Annual Report 18 UN population projections, 2003 19 Two‐wheel vehicles include motorcycles, mopeds, and scooters. Source: Dey, Abhijeet; Frost and Sullivan Consulting; “The Indian Motorcycle Segment: Growth Momentum to Continue,” May 14, 2002

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Southeast Asia The GDP growth in countries in the Southeast Asian region (Indonesia, Singapore,

Malaysia, Thailand, Vietnam) had slowed down to about 3% in 2002 (Exhibit 4) after several years of double‐digit growth.20 Despite this decline in growth rate, the increasing need for cheap transportation had made Southeast Asia one of the biggest markets in the world. In addition, motorcycles and mopeds were very convenient in the heavily congested traffic in the major Southeast Asian cities. Most manufacturers had local manufacturing plants to serve those markets.

In 2002, the motorcycle market in Vietnam was flooded with Japanese and Chinese competitors, each vying for a share of the skyrocketing demand. Sales had jumped to 2 million in 2001, up from 1 million the previous year. Analysts estimated 7 million sales by the end of 2002. However, by the middle of the year, many manufacturers were forced to stop production. The Vietnamese government, concerned over a widening trade deficit, had imposed strict quotas on imported parts. Although manufacturers could barely keep up with customer demand early in the year, by August even Honda was forced to close operations. With the import quotas in place, the landscape for foreign manufacturers had changed considerably.

Latin America As a region, Latin America had a lower number of motorcycles compared to its

population than Europe, Asia or North America. Except for Brazil, sales and production of motorcycles in the region reached a peak in 1995 before declining sharply through 2002. Brazil was the largest Latin American producer and exporter of motorcycles. Brazilian production decreased from a high of 240,000 in 1982 to 154,000 in 1994, but then rebounded to 753,000 at the end of 2001. Brazil also had the largest number of motorcycles in use in the region followed by Argentina, Colombia, Mexico and Venezuela. The four major Japanese manufacturers had manufacturing operations in many Latin American countries including: Brazil, Argentina, Guatemala, Colombia, Peru, Jamaica, and Mexico.

Brazil had an annual GDP per capita of 4,600 USD, and more than 80% of the population lived in urban areas.21 By the end of 2002, consumer confidence in the Brazilian economy had shrunk in response to the political turmoil of the October presidential elections, fueling inflation and a decrease in real spending power.22 In 2002, two‐wheeled vehicles numbered about 30 per 1000 people and this figure was relatively unchanged over the previous 5 years.

Europe Motorcycles played a significant role in post‐war Europe as an affordable means of transportation, and had therefore become a more accepted vehicle than in countries such as the US. During the 1960s and early 1970s, motorcycles were a symbol of freedom for the youth, but toward the end of the 1970s, had started to accrue a bad safety image in the European community. This negative association, together with the increasing affordability of small cars in the 1980s, greatly impacted demand for motorcycles in countries such as Germany, France, Italy and the United Kingdom. Many producers disappeared in the 70s and 80s. The remaining ones

20 http://www.economist.com/countries 21 World Bank Statistical Database, accessed through Stanford University, http://devdata.worldbank.org/dataonline/ 22 “Brazil (Automotive): Country Overview”, 2003 World Markets Research Centre, accessed through Stanford Graduate Business School Library

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had to adjust to changing needs in maturing European markets and increased competition for the shrinking market from the U.S. and Japan. In the 1990s, motorcycle sales began to pick up as the older generation sought to take back its youthful riding days. Termed “re‐entry” customers, these riders now turned to premium brands, such as BMW, after having stopped riding for many years.23

Figure 6: Historical Currency Exchange Rates

Source: OANDA.com Currency Exchange Sitehttp://www.oanda.com/convert/fxhistory

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The fall of the Berlin Wall in 1989 and the disintegration of the Communist regime opened up markets in Eastern Europe, although many of these countries had been left with shattered economies. As the political situations stabilized, these nations slowly began to recover in the mid 1990s.

Germany Motorcycle production in Germany had dramatically decreased in the 1970s through the

1990s. However, the market for motorcycles, especially high‐end bikes in Germany skyrocketed. Many of Germany’s small producers of light motorcycles and mopeds disappeared. Germany’s top producer of high‐end motorcycles, BMW‐Motorrad, increased production between 1975 and 1995 from 25,566 to 36,990 motorcycles. In 2001, that number reached nearly 98,000 units. Germany motorcycle exports reached a low in 1993 at 26,000 units, but rose to 80,000 by 2001. Domestic sales of BMW’s went from 5,100 units in 1975 to over 19,000 in 1994. By 2001, BMW‐Motorrad was selling more than 28,000 motorcycles in Germany. Other producers of large motorcycles also experienced increased sales during the same period. Total sales in Germany of motorcycles with displacement over 250 cc grew from 41,000 units in 1975 to 165,000 in 1994 to 339,000 in 2001.

In Germany, 56 of every 1000 people owned a two‐wheel vehicle. GDP per capital stayed close to $32,000 USD, and was not expected to grow very much in the following years. BMW Motorrad led the manufacturers with an 18% share of the total motorcycle market. The Japanese manufacturers, including Honda and Yamaha, followed close behind.

23 Interview with Christoph von Tschirschnitz, Head of marketing at BMW Motorrad, June 30, 2003

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The United Kingdom Once a prominent producer of motorcycles, the United Kingdom fell out of the industry

picture completely in the 1980’s and early 1990’s. Production fell to almost zero in 1990 when only 800 motorcycles were produced in the entire country. In 1960, production in the UK exceeded 130,000 units. Norton Villiers Triumph Ltd. (NVT), a leading manufacturer in the UK, produced 26,400 motorcycles in 1975, and after an all time low of only a few hundred in 1990, production rebounded to 11,778 motorcycles by 1995. In another sudden shift, overall UK production declined to 4,600 units by 1999. The number of motorcycles in use in the UK also dropped from the 1983 level of 1.3 million to 755,000 in 1993 before bouncing back to 1.1 million in 1999.

Oceania (Australia, New Zealand) From 1975 to 1995, sales of motorcycles dropped about 70% in Oceania. Most of the drop

was due to decreased sales from the four major Japanese manufacturers, Ducati and BMW. Harley‐Davidson was the only major large motorcycle manufacturer to increase sales in the region (454 units in 1975 to 2,487 in 1994). Though the region had a very high number of motorcyclists per capita, the market was quite small due to the low population. In 2000, Australia had a population of 19 million, and a GDP per capita of $22,200 USD. New Zealand was home to 3 million people with a per capita GDP of $17,400.24
Australian Shepherd

Others Other regions of the world, such as the Middle East and Africa, contributed relatively

little in terms of sales and production to the overall motorcycle market in 2003.

Manufacturing

The burst of the Bubble Economy in 1990 and high Yen exchange rates forced the Japanese manufacturers to shift operations overseas in order to decrease labor costs. Due to growing demand for motorcycles in many regions of the world, manufacturing closer to the markets also decreased transportation costs and import taxes which allowed for even more cost‐cutting. For the lightweight models, operations shifted closer to the large markets in Southeast Asia and China, while Kawasaki and Honda opened plants in the US to produce heavyweight models tailored to the North American market. The European manufacturers still produced all of their motorcycles in Europe, and Harley‐Davidson built all its motorcycles in the U.S.

24 Yahoo! Education (http://education.yahoo.com)

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The Honda and Kawasaki operations in the U.S. were 100% owned by the Japanese mother companies. In China, Vietnam and India, however, the motorcycle manufacturers expanded by forming joint ventures. In 2001, the Japanese manufacturers had operations on every continent except Africa, Australia, and Antarctica (see Exhibit 6).

Harley, Honda, and BMW AG

Harley‐Davidson From its founding in 1903 to 1969, Harley‐Davidson Motor Co. was an independent

company operated principally by its founders and their families. In 1969, Harley‐Davidson merged with AMF, Inc., a large corporation involved in a wide variety of industries. Not enough funds were invested to keep up with the Japanese superior manufacturing practices, and Harley‐Davidson’s market share declined significantly in the 1970s. In the spring of 1981, AMF announced the sale of the Harley‐Davidson Motor Company to a group of key executives at Harley including Vaughn Beals, an AMF Group VP, and “Willie” Davidson, grandson of one of the company’s founders and head designer for the company. The sale was financed via a “leveraged buy‐out” in which most of the deal’s $81 million was borrowed, and the company was back in family hands.

In April 1983 U.S. President Ronald Reagan approved a recommendation by the International Trade Commission (ITC) to protect the domestic motorcycle industry from the heavy Japanese competition25. The import tariffs on heavyweight motorcycles were raised from 4.4% to 49.4%26. Included in the domestic industry were the U.S. assembly operations of Honda in Marysville, OH27 and Kawasaki’s operations in Lincoln, NE.28

The tariffs bought precious time for Harley employees and executives to address quality problems and excessive inventory and manufacturing costs, which had eroded customer loyalty. The Harley Davidson blue‐collar work force was a key to the turnaround. Vaughn Beals later remarked in an interview that senior management had blamed a lot of Harley’s problems on Japanese competition, but that when they looked deeper into the matter, “the problem was us (senior management).”29 Harley introduced a Just‐In‐Time inventory system, a technology improvement program, extensive cost reduction30, quality improvement, and employee empowerment programs to counter the manufacturing prowess of the Japanese competitors.

In addition, Harley‐Davidson’s bikes were further differentiated from Japanese bikes with design emphasis on highly visible chrome parts‐‐ the classic Harley retro‐cruiser “look.” Willie Davidson was personally responsible for designing many of the elements of the look, feel,

25 The dollar strengthened significantly in 1981 and 1982 and Japanese makers became generally more aggressive in the U.S. market 26 Harley‐Davidson claimed that Japanese producers had been able to evade the import regulations for heavyweight motorcycles by downsizing their engines immediately below the 700cc threshold. 27 In July 1985 Honda opened a second plant in Anna, OH. 28 Harley‐Davidson claimed that they were the sole domestic producer but the International Trade Commission ruled that Honda’s and Kawasaki’s operations should also be included [USITC Publication TA‐203‐17] 29 Interview in a Video about Harley Davidson on Tom Peters: The Leadership Alliance, Copyright 1988, Video Publishing House, Inc. 30 An example of a cost cutting measure: salaried staff took a 9% pay cut in the fall of 1982, and in 1983 the unions waived a 1% wage increase that had been negotiated in 1980.

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and sound of a Harley that led to an extraordinary resurgence in demand for Harley Davidson machines.

Also in 1983, the Harley Owners Group (“HOG”) was founded for HD aficionados by Harley management. They organized motorcycle events and produced a bi‐monthly newsletter called “Hog Tales”. The founding of this group coincided with the emergence of a new segment of Harley owners, the so‐called “weekend rebels”. This group consisted of respectable, affluent white‐collar workers who simply liked to “do a ton on a Hog” after office hours. Management considered this group an important factor in generating repeat buyers and market share, but always wanted to retain their loyal core consumers. The HOG’s expanded globally and in 1995 they were present in almost every country where Harleys are sold. HOG chapters from every country imaginable donned their leathers and made an annual pilgrimage to Sturgis, South Dakota ‐ widely known as the hottest motorcycle event in the world. The Sturgis Rally gave customers a chance to revel in the Harley lifestyle.

After a close encounter with bankruptcy in 1985, Harley returned to public ownership in July 1986 with the sale of 2 million new shares at an offering price of $11.00 per share ($10.23 after fees and expenses). In December 1986, Harley acquired the Holiday Rambler Corporation, a leading manufacturer of recreational vehicles. This acquisition was explained as diversification of their strategy to sell top‐of‐the‐line products to committed groups of enthusiasts whose lifestyles revolved heavily around their recreational activities.

In 1986, Harley’s low‐priced 883 Sportster® model and the “Close to the Customer” marketing philosophy began to attract many new customers. The basis of this philosophy was the premise that no one needed a Harley‐Davidson motorcycle; people bought them to satisfy a desire for recreation and the feeling of independence and freedom. In addition, 1986 was an excellent year for sales of Harley‐Davidson parts and accessories. Throughout the 80s and 90s, demand for HD paraphernalia skyrocketed. Everything from tattoos, boots and leathers to toys, coffee and prepaid calling cards were licensed with the Harley‐Davidson brand, and there is a long list of other “lifestyle products” in the 90s (Exhibit 10).

In March 1987, Harley‐Davidson went to Washington, DC to ask the government to rescind the tariff protection (awarded in 1983) one year before it would have expired; they had regained their competitiveness and the protection had become obsolete. On June 8th, 1987 Harley executed a second public offering of 1.23 million shares and less than a month later Harley‐Davidson moved its listing from the American to the New York Stock Exchange. Even “Black Monday” (October 19, 1987) did not prevent it from being a very good year for the company.

During the financial year 1987, 38.4% of Harley‐Davidson’s $685.4 million revenue came from the sales of motorcycles. The HOG had over 80,000 members and 300 chapters throughout the U.S. in that year.

Market share increased in virtually every market around the world during 1988. Although the export market for Harley Davidson was significantly less that the domestic market (Exhibits 7 and 8), sales in the Japanese market grew 38% and almost closed the gap with Harley’s largest export customer, Canada. In addition, sales in Europe went up 40%. By 1995, the patented roar of a Harley was heard on almost every continent.

Despite the lagging U.S. economy, the company had a good start in the 90’s. Sales and share of the U.S. market continued to increase. During 1993, Harley‐Davidson acquired 49% interest in Buell Motorcycle Company, a manufacturer of performance motorcycles. Sales were

14


low but Buell’s plan to enter the Japanese and European markets had great potential. Buell used Harley dealerships for distribution channels. By 2002, Harley‐Davidson had captured 48% of the 650+ cc market in the United States and 21% in Japan. In Europe, however, the company fell behind the Japanese competitors and BMW with only 6.6% of the heavy‐weight market.

Harley‐Davidson’s clientele was characterized by extreme brand loyalty; 41% had previously owned a Harley‐Davidson, and 92% of purchasers expressed the intent to repurchase a Harley.31 Most dealers completely sold out of stock within the first few months of a new model year and kept six month waiting lists for any extras that might come in from the factory. In 2002, Harley‐Davidson manufactured close to 30 different models, mainly touring and custom heavyweight motorcycles. Prices ran from around $6,000 for the Sportster to over $30,000 for the top of the line custom machines. Around the world, the waiting lists were even longer, and prices were high. In Europe and Japan, Harleys sold for about 25% more than their U.S. prices, and the demand overseas far outweighed the supply that Harley intentionally kept low.

America’s love affair with Harley‐Davidson was seen every day on television, in magazines or on the big screen. Who can forget Harley’s dominant presence in movies like “Easy Rider” or “The Terminator”? Jay Leno’s impressive collection was often displayed on the Tonight show, and countless advertisements showcased the classic bikes. Harleys were symbolic of American freedom, adventure and individualism, and their riders were loyal to the grave.

“The old saying is that if you can persuade the customer to tattoo your name on their chest, they probably won’t switch brands”

‐ Professor Robert W. Hall, Indiana School of Business

With the coming of the worldwide web in the 1990s, everyone from Hells Angels Chapters to closet road warriors could experience the magic of the Harley‐Davidson experience on the internet. Harley wannabees thinking of an adventure trek to the Sturgis Rally could plan their adventure by surfing to http://rally.sturgis.sd.us. Nerdy web surfers‐turned‐weekend‐rough‐riders could also check purchase prices for Harleys, buy boots and leathers, see what other folks were wearing to Sturgis, hook up with other HOG members for the journey, and even find a tattoo parlor en route.

Honda Like most other motorcycle companies in post‐war Japan, Honda Motor Co., sought to

satisfy the incredible need for transportation. Unlike its competitors, however, Honda had the technical brilliance of founder Soichiro Honda, as well as the pragmatic resourcefulness of Takeo Fujisawa. With this successful combination, Honda quickly upgraded from producing clip‐on engines which transformed bicycles into makeshift ʺmopeds,ʺ to production of its D type motorcycle. By 1955, Honda became the leading motorcycle producer in Japan. In 1958, Honda introduced the immensely popular 50cc Supercub in Japan, a motorcycle designed for single‐handed operation and effectively placed Honda as the leader in motorcycle sales.32

In 1959, inhibited by a cautious Japanese government, Honda entered the U.S. market with $110,000 in cash and $140,000 in motorcycle parts and inventory, to establish the American Honda Motor Co, Inc. Disaster struck less than a year later when it was discovered that Honda’s first American made motorcycles suffered from clutch failure and oil leaks. ʺHondaʹs fragile

31 source: Harley‐Davidson 32 Supplement to “Note on the Motorcycle Industry” ‐ 1975. HBS, 1983.

15

http://rally.sturgis.sd.us/


reputation was being destroyed before it could be established.ʺ33 Despite these dark moments, Honda found that its 50cc bikes, deemed unsuitable for the U.S. market, had attracted considerable attention when Honda employees used them to run errands around Los Angeles. Using the momentum generated from this newly emerging market, Honda embarked on a journey that would revolutionize the U.S. motorcycle industry.

In the spring of 1963, Honda unveiled a bold, new marketing strategy that forever changed the image of motorcycle riders. The ʺYou Meet the Nicest People on a Hondaʺ theme softened the ʺblack jacketʺ image of motorcycling and appealed to a large, untapped mainstream market segment. This campaign drove sales even higher, and by 1964, almost half of all motorcycles sold in the U.S. were Hondas.34

More so than any other motorcycle manufacturer, Honda embraced a global strategy flexible enough to give it substantial market shares in each of the four designated focus regions: the Americas, Europe/Middle East/Africa, Asia/Oceania, and Japan.35 This strategy focused on the main objectives of staying close to customers, understanding their needs, and exceeding their expectations. For each country, a regional strategy was established to continually focus on the local market segment. Following these guidelines, Honda found the need to diversify its products to satisfy the needs of its customers specific to each region.

The first Honda research and development center was established in July of 1960. Multiple Honda R&D centers were created in the United States, Japan, United Kingdom, Germany and Thailand. In 2002, Honda spent ¥295 billion in R&D, 5.3% of net sales.36 Hondaʹs continued commitment to innovation was consistent with the philosophy of its founder. Known as a man who embodied ʺinventive ability and ultimate self‐confidenceʺ, Soichiro Honda used his engineering genius to beat his competitors. Hondaʹs R&D efforts were designed to maintain an edge over its competition.

Hondaʹs first manufacturing facility in America was built in Marysville, OH in the 1970ʹs. Since then, several plants were established in the United States. Honda began exporting American made motorcycles in 1980, and by 1995 exported nearly 180,000 motorcycles and all terrain vehicles (ATVʹs) from the U.S. to Australia, Canada, New Zealand, France, Germany, and Japan.37

Honda established the ʺStrategy for the Americasʺ in 1994, a definitive statement of its commitment to the American community. By this time, Harley‐Davidson dominated the all‐American image that Honda was hard pressed to overcome. Honda committed itself to mimicking the American image and created motorcycles to rival the unique style of the Harleys. In 1983, Honda introduced the “Shadow”, which became quite popular and remained in production through 1995. The Shadow and Gold Wing models, tailored to the U.S. market were primarily manufactured in the United States. The Honda Riders Club, established in 1992, had over 100,000 members by 1995. Five rider education centers in the U.S. were established to hold rallies and services for Honda riders.

33 Supplement to “Note on the Motorcycle Industry” ‐ 1975. HBS, 1983. 34 Perspective on Strategy: The Real Story Behind Honda’s Success. California Management Review, 1984. 35 1996 Honda Fact Book. 36 Honda Motor Company 2002 Annual Report 37 Honda of America, Mfg. Press Information.

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Honda, Kawasaki, Yamaha and Suzuki, the four major Japanese motorcycle manufacturers, were the target of an antitrust probe by the Justice Department during September of 1986.38 During this time, the Reagan administration imposed high tariffs on the Japanese manufacturers to give Harley‐Davidson a chance to more effectively compete with Japanese motorcycle brands. By 1990, after the period of high tariffs on the Japanese manufacturers, Harley commanded a 60% market share while Hondaʹs had dropped to 14%.

In 2001, Honda was again the leading brand in the U.S. market despite fierce competition from Harley and the other major Japanese players. Approximately 28% of newly registered motorcycles in the U.S. in 2001 were manufactured by Honda. Harley‐Davidson followed closely with a 22% share. Together, the six major brands – including Yamaha, Kawasaki, Suzuki, and BMW – dominated the market, comprising 91% of all new motorcycle registrations.39 Honda employed over 7,500 people in their Marysville, Ohio, motorcycle factory, and 17,000 people overall in the United States.

BMW Originally founded in 1916 as an aircraft engine manufacturer, BMW began producing

motorcycles in Germany in 1923. In recent times, BMW was primarily known for its automobiles and the recently divested British Rover Group. BMW AG, the subsidiary of BMW Group that produced all BMW‐branded vehicles, was divided into the primary automobile manufacturing business and the much smaller motorcycle division. In the late 1980s, the motorcycle group gained its own legal status. BMW‐Motorrad, as the branch was called, operated more or less independently from the parent company, and had its own management board and R&D team. Responsible for all motorcycle‐related products, including apparel and accessories, BMW‐Motorrad was composed of highly dedicated employees, most of which were motorcycle riders.

BMW‐Motorrad’s business consisted of five core functions: product portfolio strategy, marketing, events and exhibitions, dealer development, and rider training. The product portfolio team was in charge of making sure customers received a complete, integrated motorcycle “system,” which included not only the motorcycle itself, but also accessories, apparel, and additional services.40 The marketing department took the role of handling traditional advertisement as well as online marketing channels. Each year, the team produced about 30 different model brochures, designed to communicate the fantasy and off‐road excitement of owning a BMW motorcycle. The brochures were used in dealerships, and also to support direct marketing efforts. In addition, the marketing team was responsible for designing and maintaining the BMW‐Motorrad website, and had created “virtual dealer centers” in 12 different countries (not available in the United States) that could be accessed online.41

The events and exhibitions team organized the annual BMW Boxer Cup, a motorcycle competition that consisted of seven to nine races over several months. Launched in 1999, the Boxer Cup initially drew riders from France and Belgium, but had since attracted international competitors. Although a smaller event than the MotoGP competition, the Boxer Cup was quickly gaining popularity, and had attracted nearly 100,000 spectators to each race in 2002.42 The event also showcased the BMW R 1100 S, one of the few sports bikes made by BMW‐Motorrad. All of 38 “Four Big Japanese Motorcycle Concerns Are Said to Be Focus of Antitrust Probe”. Wall Street Journal, Sept. 16, 1986. 39 Motorcycle Industry Council 2001 Statistical Annual 40 For example, technical, customer support, and touring services 41 Virtual center is available on the U.K. site (http://www.bmw‐motorrad.co.uk) 42 BMW Motorrad website (http://www.bmwmotorcycles.com/boxercup/history.html)

17


the Boxer Cup races up through 2002 had been held in Europe, although plans were being discussed to move the event to the United States. The events and exhibitions division also maintained three “enduro parks” in Germany, Britain and South Africa. These were large, open areas used for off‐road training programs in which customers could enroll to learn the finer points of dirt riding.

BMW R 1100 S Boxer Cub Replika

The dealer development team faced the task of determthan 1,000 BMW dealerships worldwide, which were often thidentity could be impressed upon customers. The team was alupgrading the computerized information systems used by deasupported the dealerships as well by providing dealer traininand sales workshops. In this way, dealers were kept close to Bapproaching and serving customers.

At the end of the 1980s, BMW‐Motorrad found itself cof loss from 1985 until 1991. However, two years later and aftthe company finally broke even. In 2002, BMW‐Motorrad delito customers, compared to just 30,000 in 1993. The BMW prodmodels in 1995 to fifteen models in 2002, including several 120of 650 cc bikes (launched in 1999). Most of BMW’s larger motostyling and performance from Harley‐Davidson’s cruisers, aneach focus on a separate niche market. However, in 1998, BMWa retro‐style cruiser that competed directly with Harley’s line HD’s lineup, BMW’s new model was set to tap into the lucrati

BMW’s strategy, both for motorcycles and automobileluxury image. BMW neither pursued high volume sales nor enmarketing strategy enabled the company to charge higher maidentity. BMW‐Motorrad’s goal was to achieve and maintain aof its major markets. In addition, with fewer than 3,000 emploenvironment, BMW‐Motorrad was run more like a medium sicorporation. Steady, profitable growth would allow BMW to increased the loyalty of its employees, and protected its distin

In 2002, the world market was characterized by changAsian market, basic transportation needs far outweighed the llike the U.S. and Japan. The quality gap between competitors aggressive pricing in those countries. The developed markets,

18

BMW R 1200 C

ining the look and feel of the more e first places BMW‐Motorrad’s so responsible for maintaining and lers. The training department g, including educational material MW‐Motorrad’s strategy of

lose to bankruptcy due to a period er a series of cost‐cutting measures, vered over 100,000 motorcycle units uct line expanded from four 0 cc heavyweights and a new series rcycles were quite distinct in d the two companies were able to ‐Motorrad rolled out the R1200 C,

of motorcycles. Priced similarly to ve cruiser market.

s, had been to maintain a premium tered lower‐priced markets. This rgins and strengthen their brand n approximately 10% share in each yees and a non‐bureaucratic zed company rather than a large maintain a corporate culture that ctive brand.

ing needs. In the large Southeast eisure usage prominent in countries was minimal and resulted in in contrast, offered manufacturers


the opportunity to differentiate their products to serve niche segments. Although the potential for high volume sales growth was lower, the attractiveness of higher margins could not be ignored.

Other Competitors

Yamaha “The Yamaha Spirit” The Yamaha Motor Company was founded in 1955 as a separate entity of the Yamaha

Corporation, which owned 33% of the motorcycle manufacturer. Following the success of its initial motorcycle production, Yamaha diversified its product base to include powerboats and outboard motors in 1960. Yamaha continued to use its small‐displacement engine expertise to expand its product line to include golf cars, generators, snow throwers, etc.

Yamaha motorcycle domestic sales in Japan peaked at 1,110,000 total units (55,000 units of 250 cc or greater) in 1981, but dropped to 217,000 total units by 2001. Following a short‐lived surge in the 250+ cc bikes to 30,000 units in 1996, sales in this category fell to 15,000 by 2000. Meanwhile, its exports of 250 cc or greater motorcycles also peaked in 1981 at 346,000 units, but eroded to 86,000 in 1988. By 2001, however, Yamaha rebounded to exporting 211,000 units in this category.

Suzuki Suzuki Motor Corporation was the world’s third largest seller of motorcycles (behind

Honda and Yamaha). 74% of its motorcycles were sold out of Japan.

In 1981, Suzuki achieved motorcycle sales of over 705,000 units in Japan, of which about 27,000 were 250 cc or greater. By 2001, its overall domestic sales dropped to 107,000 and deliveries of 250+ cc motorcycles also fell to a little over 6,000 units. Suzuki’s worldwide exports of machines greater than 250 cc peaked at 203,000 units in 1981, but plummeted to 64,000 units in 1985. By 2001, however, sales in this category had recovered to 232,000 units.

Kawasaki “Let the Good Times roll.”

Kawasaki In 1966, Kawasaki Heavy Industries, LTD in Japan established the Kawasaki Motors

Corp., U.S.A. in an old meat warehouse in Chicago. It produced the Avenger and Samurai motorcycles under heavy U.S. market demand for high performance. In 1968, the motorcycle

19


manufacturer combined with its east coast distributor, the Eastern Kawasaki Motor Cycle Corp., to form Kawasaki Motors Corporation, U.S.A. in southern California. In the 80s, Kawasaki produced the 1500 cc ʺVulcan Cruiserʺ, a custom bike to compete with Harley‐Davidson.

Unlike the three other major Japanese motorcycle manufacturers, Kawasaki’s domestic motorcycle unit sales in Japan increased from 1980 through the early 1990s. In 1980, Kawasaki sold over 39,000 units of which 24,000 were 250 cc or bigger models. By 1992, Kawasaki boosted its overall domestic bike sales in Japan to over 65,000 units. By the same time, sales of its 250 cc or greater models rose to 37,000 units. However, the good times would not last. By 2001, overall domestic sales had dropped to 20,000 units, and 250+ cc sales fell to 7,600 units. Kawasaki’s worldwide exports peaked in the 1980 at 429,000 units, but plunged quickly to 200,000 units by 1985. Over the next 15 years, this figure did not change much. In 2001, overall exports were still at 200,000 units, with the 250+ cc exports accounting for just over 50% of the total.

Decision Time

In2003, BMW, Harley, and Honda were preparing for another phase in the battle for growth and market share in motorcycle markets around the world. These three leading competitors had waged war on each other and on Kawasaki, Yamaha, Suzuki, and a number of smaller competitors for decades. The rules of engagement had changed as countries’ economies evolved in their respective life cycles. One competitor gained advantage in one region while another was victorious elsewhere. The only constants were that markets were rapidly evolving, and competition continued to be fierce.

Individual consumers often participated in the global motorcycle wars at different points in their own lives. Rebellious teenagers with limited resources in the 1970s were becoming affluent parents with teens of their own in 2003 and beyond. The brands they bought at different stages in their lives reflected the changes in their earning power, and their basic motivations for buying a motorcycle.

Late one afternoon in January, 2003, Jeffrey L. Bleustein‐‐ Chairman, President and CEO of Harley‐Davidson – convened a meeting with his executive team at company headquarters in Milwaukee, WI. They were gathering to discuss their global marketing strategy for the next 5 years. Harley‐Davidson’s fast approaching 100th anniversary in 2003 represented a unique opportunity to strengthen the company’s brand and put on a series of memorable events for the company’s enthusiastic customers.

That same week, Mr. Hiroyuki Yoshino – President and CEO of Honda Motor Company – and the executive staff assembled for a meeting at their headquarters in Minato‐ku, Tokyo. Likewise, Mr. Yoshino had brought them together to assess the changing global motorcycle market, and to develop their strategy for the motorcycle division in the next five years.

Meanwhile, BMW‐Motorrad marketing manager Christoph v. Tschirschnitz was on a

video teleconference with the North American motorcycle division in New Jersey. Dr. Helmut Panke – Chairman of the Board of Management of BMW Group – hoped to see BMW‐Motorrad make a bigger impact on vehicle sales. Over the teleconference, Christoph wanted to discuss his vision for BMW‐Motorrad’s 80th anniversary, and how to strengthen his company’s global strategy.

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Common decisions…

Each of the three leadership teams had five decisions to make in their marketing strategies: First, what motivates customers to buy motorcycles in markets as diverse as Germany, Japan, the U.S., Brazil, India, China, and Vietnam? Second, which of those countries are the most attractive markets for our company, given our competitive position? Third, what specific market segments should we focus on in our high priority countries? Fourth, what is our compelling reason to buy for our target segments? Finally, how should we position ourselves relative to our competition in our target countries and segments?

Specific Decisions…

In addition, each leadership team faced different decisions about how best to increase profits and market share in the next five years.

BMW was concerned about how to increase its share in countries outside Germany, where it was the market leader in motorcycles. In which of the six countries mentioned above should BMW focus its marketing efforts in 2003? How should BMW leverage the strength of its automobile brand to increase the profits and market share of its motorcycle division? What specific marketing communications media should BMW use to reach its target customers in each country?

Honda was concerned about how to enhance its reputation at the high end of the motorcycle market relative to competitors like Harley Davidson and BMW, while simultaneously offering reliable transportation that the masses would love, at prices that they could afford. How could Honda build its brand across a wide range of models and price points? How could Honda manage the risk of diluting its brand by trying to serve such a wide range of customers?

Harley Davidson was celebrating its 100th birthday in the summer of 2003, and wanted to capitalize on the use of public relations to build its brand during its centennial year. At the same time, turning 100 was a double edged sword. How could Harley insure that its brand appealed to the next generation of riders? How could it prevent 20‐somethings from positioning it in their minds as a motorcycle for their parents’ generation, but not for them? Harley also faced the challenge of being an all‐American brand in a world where George Bush’s use of military force in Iraq had turned many people around the world against America. What, if anything should Harley do to build its brand in countries where Harley’s patriotic, “made in America” positioning might result in a customer backlash?

All three executive teams had significant decisions to tackle in 2003 to help their companies achieve success on the road ahead. What would you do if you were leading Harley, Honda, or BMW in 2003?

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Exhibit 1: United States Motorcycle Owner’s Profile

Age and Gender 1998 1990 1985 1980Under 18 4.1 0.1 0.1 0.218 24 10.6 15.5 20.7 24.325 -29 10.9 17.1 18.7 14.230 - 34 11.5 16.4 13.8 10.235 - 39 16.0 14.3 8.7 8.840 - 49 24.6 16.3 13.2 9.4> 50 19.1 10.1 8.1 5.7Not Stated 3.2 2.0 1.9 2.8Median Age 38.0 32.0 27.1 24.0Mean Age 38.1 33.1 28.5 26.9Percent Female 9.0 7.3Marital Status 1998 1990 1985 1980Single 40.0 41.4 47.6 51.7Married 58.8 56.6 50.3 44.3Not Stated 1.2 2.3 2.1 4.0Highest Level of Education 1998 1990 1985 1980Grade School 3.3 5.9 7.5 13.5Some High School 9.6 9.5 15.3 18.9High School Graduate 36.0 39.4 36.5 34.6Some College 26.5 25.2 21.6 17.6College Graduate 16.0 12.4 12.2 9.2Post Graduate 6.9 5.2 5.2 3.1Not Stated 1.7 2.4 1.7 3.1Occupation of Owner 1998 1990 1985 1980Laborer/Semi-Skilled 12.7 24.1 23.2 20.7Professional/Technical 31.3 20.3 19.0 18.8Mechanic/Craftsman 15.3 13.1 15.1 23.3Manager/Proprietor 7.5 9.3 8.9 8.6Clerical/Sales 3.6 6.8 7.8 9.3Service Worker 7.5 6.6 6.4 7.1Farmer/Farm Laborer 2.8 2.1 5.1 4.6Military 2.6 1.5 1.6 1.9Other 13.5 13.1 4.6 0.0Not Stated 3.2 3.1 8.3 5.7Household Income for Prior Year 1998 1990 1985 1980Under $10,000 2.3 3.4 10.9 9.1$10,000 - $14,999 2.3 4.4 9.3 13.0$15,000 - $19,999 4.7 7.8 11.6 13.9$20,000 - $24,999 6.1 10.8 8.4 12.9$25,000 - $34,999 13.3 21.4 18.3 5.5$35,000 - $49,999 19.1 19.6 14.4 5.9> $50,000 33.2 19.9 6.1 2.4Don’t know 19.0 12.7 21.0 30.3Median $44,250 $33,100 $25,600 $17,500

Source: Statistical Annual 2002, Motorcycle Industry Council (United States)

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Exhibit 2: Population and Economic Data

Country Population (M) Growth % GDP* ($B) Growth %Australia 19.7 1.1% 539 3.8%Brazil 176.0 1.0% 1,341 1.6%China 1,280.0 0.9% 6,000 8.0%France 59.4 0.4% 1,440 1.2%Germany 82.4 0.1% 2,196 1.6%India 1,045.8 1.6% 2,729 5.4%Japan 126.9 0.2% 3,400 0.2%Russia 144.9 -0.2% 1,090 4.3%South Africa 45.0 1.8% 441 2.4%Turkey 70.3 1.5% 470 7.8%UK 60.1 0.4% 1,586 2.7%USA 286.9 1.0% 10,446 3.0%Vietnam 80.3 1.4% 186 7.0%* Adjusted for local price of goodsSource: The Economist (http://www.economist.com/countries) Exhibit 3: Motorcycle Manufacturing Facilities by Manufacturer and Country

Country Honda Kawasaki Suzuki Yamaha BMW HarleyBrazil 1 1China 3 2Colombia 1Germany 1India 1 1Indonesia 1 1Italy 2 1Japan 5 1Mexico 1Philippines 2 1RussiaSpain 2 1 1Taiwan 1Thailand 2 1 7 1USA 3 1 12* Includes primary facilities, joint ventures and subsidiariesSource: Honda, Kawasaki, Suzuki, Yamaha, BMW, Harley-Davidson Annual Reports 2002

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Exhibit 4: Number of Models by Manufacturer and Engine Size

Engine Size BMW Harley Honda Suzuki Kawasaki Ducati0 - - - - - -

100 - - - 5 - - 200 - - 1 2 - - 300 - - - 2 2 - 400 - - - 3 2 - 500 - - - - 1 - 600 - - 2 3 3 3 700 3 - - 3 4 - 800 - - 3 7 5 6 900 - 4 1 - 1 -

1000 - - 4 5 2 12 1100 2 1 1 - - - 1200 10 3 - - 5 - 1300 - - 2 1 - - 1400 - - - 1 - - 1500 - 18 1 - 5 - 1600 - - - - 1 - 1700 - 1 - - - - 1800 - - 3 - - - 1900 - - - - - - 2000 - - - - - - Total 15 27 18 32 31 21

Source: Manufacturer's websites, 2003 Exhibit 5: Motorcycle Unit Sales by Manufacturer and Country, 2002 Region Honda BMW Harley TotalNorth America 590,000 13,231 223,200 n/aEurope 315,000 64,264 21,900 n/aAsia/Pacific n/a 4,723 14,300 n/aBrazil 624,000 400 n/a 780,000 Canada n/a 1,100 37,000 144,785 China n/a - - #########France 33,500 8,100 3,100 179,600 Germany n/a 28,800 n/a 160,000 India* 1,680,700 - - 2,800,000 Japan 404,000 2,800 7,477 771,100 South Africa n/a 1,100 n/a 7,891 United States 237,200 13,500 186,200 850,000 Vietnam** 280,000 - - 2,500,000Total Units 6,095,000 92,600 263,700 n/aSource: Honda 2002 annual report, Motosargentinas (http://www.motosargentinas.com.ar/bmw.htm),BMW Canada (www.bmw.ca/english/enterprise/milestones.html), Japanese AutomobileManufacturers Association, Motorcycle Newswire 2/15/2002, Motorcycle Industry Council2002 Statistical Annual, US-Vietnam Trade Council (http://www.usvtc.org/index.htm),Yahoo Finance 2003 (http://finance.yahoo.com), Harley-Davidson website (http://www.harleycanada.com)* Hero Honda (26% owned by Honda Motor Company)** Total based on number of import kits plus number of domestically produced units

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Figure 6: Data on Customer Shipment, Sales and Profit by Manufacturer

BMW Motorrad Shipment Sales (Euro) Profit2002 103,000 1,128,000 63,0002001 95,000 1,059,000 60,0002000 81,000 924,000 59,0001999 65,000 767,000 27,0001998 60,000 652,000 18,0001997 54,000 564,000 n/a1996 49,000 477,000 n/a1995 50,000 n/a n/a1994 47,000 n/a n/a1993 35,000 n/a n/a

Source: BMW 1999-2002 Annual Report

Harley-Davidson Shipment Sales (USD) Profit2002 263,700 4,091,000 580,0002001 234,500 3,407,000 438,0002000 204,600 2,943,000 348,0001999 177,200 2,453,000 267,0001998 150,800 2,064,000 214,0001997 132,300 1,763,000 174,0001996 118,800 1,531,000 143,0001995 105,100 1,351,000 111,0001994 95,800 1,159,000 96,0001993 81,700 933,000 76,000

Source: Harley-Davidson 1999-2002 Annual Report

Honda Motorcycles Shipment Sales (Yen) Op. Income2002 6,095,000 947,000,000 69,656,0002001 5,118,000 805,000,000 56,478,0002000 4,436,000 718,000,000 47,264,0001999 4,295,000 807,000,000 82,350,0001998 5,257,000 853,000,000 101,922,0001997 5,198,000 689,000,000 77,532,0001996 5,373,000 585,000,000 59,308,0001995 4,815,000 552,000,000 54,699,0001994 4,169,000 547,000,000 48,609,0001993 3,951,000 569,000,000 45,313,000

Source: Honda Motor Company 1997-2002 Annual Reports

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Exhibit 7: Comparison of Stock Performances

Exhibit 8: Honda Motor Company Financials (Millions of Yen)

Income Data 2002 2001 2000 1999 1998Net sales and other operating revenue 7,362,438 6,463,830 6,098,840 6,231,041 5,999,738

Motorcycle sales 947,900 802,304 718,910 807,593 767,190Operating income 639,296 406,960 426,230 548,698 462,313

Motorcycle op. income 69,656 56,478 47,264 82,350 87,374Income before income taxes 551,342 384,976 416,063 520,511 443,351Income taxes 231,150 178,439 170,434 229,624 201,278Equity in income of affiliates 42,515 25,704 16,786 14,158 18,552Net income 362,707 232,241 262,415 305,045 260,625As percentage of sales 4.9%. 3.6%. 4.3%. 4.9% 4.3%Cash dividends 24,360 22,412 20,463 20,463 16,563Research and development 395,176 352,829 334,036 311,632 285,863Interest expese 16,769 21,400 18,920 27,890 27,655

Balance Sheet Data 2002 2001 2000 1999 1998Total assets 6,940,795 5,667,409 4,898,428 5,034,247 4,815,265

Motorcycle assets 754512 597998 491,301 538,924 546,473Long-term debt 716,614 368,173 574,566 673,084 677,750Stockholders' equity 2,573,941 2,230,291 1,930,373 1,763,855 1,607,914Depreciation 194,944 170,342 172,139 177,666 153,337

Motorcycle depreciation 22,129 19,275 19,106 20,312 17,335Capital expenditures 303,424 285,687 222,891 237,080 309,517

Motorcycle capital exp. 29,929 34,012 24,761 40,057 36,403Source: http://world.honda.com/investors/annualreport/2002/

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Exhibit 9: BMW AG Financials*

* BMW AG produces BMW branded automobiles and motorcycles, and is owned by BMW Groupin euro million 2002 2001 2000 1999 1998Revenues 35,315 29,993 25,276 21,770 19,828Cost of sales 32,058 27,948 22,680 19,144 17,725Gross profit 3,257 2,045 2,596 2,626 2,103

Sales, marketing costs 2,365 1,974 1,619 1,432 1,247Administration costs 558 373 351 326 281Other operating income/expenses -51 348 -2,295 -381 -125Net income on investments 541 426 1,918 -487 4Net interest income/expense -161 -107 1 281 94Profit from ordinary activities 663 365 250 281 548

Income taxes 41 8 -66 7Other taxes 7 7 6 5 6Net profi

251

t 615 350 310 269 291

Assets in euro million 2002 2001 2000 1999 1998Intangible assets 117 277 397 314 148Property, plant and equipment 4,309 3,259 2,634 2,416 2,358Financial assets 6,043 5,570 5,302 1,642 2,802Non-current assets 10,469 9,106 8,333 4,372 5,308

Inventories 2,193 1,979 1,687 1,639 1,315Trade receivables 501 674 550 472 427Receivables from subsidiaries 975 1,449 2,136 2,428 2,798Other receivables and other assets 1,581 1,427 1,927 902 75Marketable securities and notes 926 702 578 634 491Cash and cash equivalents 109 111 239 334 641Current assets 6,285 6,342 7,117 6,409 5,747

Prepayments 100 17 7 15 11Total Assets 16,854 15,465 15,457 10,796 11,066Source: BMW Annual Reports, 1999-2002

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Exhibit 10: Harley‐Davidson Financials (Thousands of Dollars)

Income Data 2002 2001 2000 1999 1998Net revenue 4,090,970 3,406,786 2,943,346 2,482,738 2,087,670Cost of goods sold 2,673,129 2,253,815 1,979,572 1,666,863 1,414,034Gross profit 1,417,841 1,152,971 963,774 815,875 673,636

Financial services income 211,500 181,545 140,135 132,741 102,922Financial services expense 107,273 120,272 102,957 105,056 82,711Operating income from financial services 104,227 61,273 37,178 27,685 20,211

Selling, administrative and engineering expense -639,366 -551,743 -485,980 -427,701 -360,231Income from operations 882,702 662,501 514,972 415,859 333,616

Gain on sale of credit card business — — 18,915 — —Interest income, net 16,541 17,478 17,583 8,014 3,828Other, net -13,416 -6,524 -2,914 -3,080 -1,215Income before provision for income taxes 885,827 673,455 548,556 420,793 336,229

Provision for income taxes 305,610 235,709 200,843 153,592 122,729Net income 580,217 437,746 347,713 267,201 213,500

Shares Outstanding 2002 2001 2000 1999 1998Weighted-average common shares:Basic 302,297 302,506 302691 304,748 304,454Diluted 305,158 306,248 307470 309,714 309,406

Balance Sheet Data 2002 2001 2000 1999 1998Working capital 1,076,534 949,154 799521 430,840 376,448Current finance receivables, net 855,771 656,421 530859 440,951 360,341Long-term finance receivables, net 589809 379335 234091 354888 319427Total assets 3,861,217 3,118,495 2436404 2,112,077 1,920,209

Current finance debt 382,579 217,051 89,509 181,163 146,742Long-term finance debt 380,000 380,000 355,000 280,000 280,000Total finance debt 762,579 597,051 444,509 461,163 426,742

Shareholders’ equity 2,232,915 1,756,283 1405655 1,161,080 1,029,911Source: Harley-Davidson Annual Reports, 1999-2002

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Exhibit 11: Regional Market Share of 650+ cc Motorcycles

New U.S. Registrations (thousands of units): 2002 2001 2000 1999 1998Total market new registrations 442.3 394.3 340 275.6 227.1Harley-Davidson new registrations 209.3 177.4 155.1 134.5 109.1Buell new registrations 2.9 2.6 4.2 3.9 3.2

Percentage Market Share: 2002 2001 2000 1999 1998Harley-Davidson 48.2 45.7 46.8 50.2 49.5Honda 19.8 20.5 18.5 16.4 20.3Suzuki 9.6 10.8 9.3 9.4 10.0Yamaha 8.9 7.9 8.4 7.0 4.2Kawasaki 6.9 8.0 9.0 10.3 10.1BMW 2.5 2.7 3.2 3.5 2.7Other 4.1 4.4 4.8 3.2 3.2

Total 100.0 100.0 100.0 100.0 100.0

New European Registrations (thousands of units): 2002 2001 2000 1999 1998Total market new registrations 303.5 293.6 293.4 306.7 270.2Harley-Davidson new registrations 20.1 19.6 21.8 19.9 15.7Buell new registrations … … … …

Percentage Market Share: 2002 2001 2000 1999 1998Honda 21.0 17.4 21.8 22.2 24.1Yamaha 17.7 16.4 17.3 18.0 16.3BMW 15.1 15.1 13.0 13.0 13.4Suzuki 14.8 16.5 14.3 15.4 17.2Kawasaki 8.5 8.9 9.4 11.6 10.7Harley-Davidson 6.6 6.7 7.4 6.5 6.4Ducati 5.7 6.4 6.3 5.4 …Triumph 3.5 4.7 4.2 4.2 …Other 7.1 7.9 6.3 3.7 11.9

Total 100.0 100.0 100.0 100.0 100.0

New Asia Registrations (thousands of units): 2002 2001 2000 1999 1998Total market new registrations 63.9 62.1 62.7 63.1 69.2Harley-Davidson new registrations 13 12.7 12.9 12.3 10.3Buell new registrations … … … …

Percentage Market Share: 2002 2001 2000 1999 1998Harley-Davidson 21.3 20.4 20.5 19.6 15.6Honda 19.1 17.3 20.4 22.4 28.0Kawasaki 15.8 15.6 18.9 19.0 22.1Yamaha 13.6 15.8 17.0 19.0 16.6Suzuki 10.1 12.8 10.4 9.3 7.9BMW 7.3 5.0 4.0 4.4 4.3Ducati 6.9 6.8 4.6 3.2 …Other 5.9 6.3 4.2 3.1 5.5

Total 100.0 100.0 100.0 100.0 100.0Source: Harley-Davidson Annual Reports

1.6

0.5

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Exhibit 12: Motorcycles and Mopeds in Use (Thousands of Units)

Southeast AsiaCountry 1983 1990 1994 1995 1998 1999 2000 2001India* 3,512 14,000 20,689 19,000 24,692 n/a n/a n/a

Indonesia 4,136 6,079 8,135 8,680 12,601 13,053 13,563 n/aMalaysia 1,948 3,036 3,977 3,565 4,692 5,082 5,357 5,609

Philippines 261 382 624 708 1,033 n/a 1,216 n/aSingapore 142 121 125 130 133 133 n/a n/aThailand 2,163 3,520 8,248 9,170 11,975 12,242 12,849 145,000Vietnam n/a n/a n/a 3,309 4,466 5,500 n/a n/a

* India 1990 data is for 1991Asia

Country 1983 1990 1994 1995 1998 1999 2000 2001China 370 3,413 8,845 18,000 20,426 31,619 37,720 n/a

Hong Kong 26 17 30 21 32 33 n/a n/aJapan 16,213 17,772 15,909 15,587 14,537 14,258 13,974 13,720

Taiwan 5,594 7,146 8,035 8,517 10,529 10,958 11,423 11,733

South AmericaCountry 1983 1990 1994 1995 1998 1999 2000 2001Brazil 808 1,698 2,597 2,847 3,081 3,670 4,123 n/a

Colombia 179 196 433 560 891 949 1,000 1,049Venezuela 376 500 n/a n/a n/a n/a n/a 1,200

North AmericaCountry 1983 1990 1994 1995 1998 1999 2000 2001

United States 6,990 7,300 3,800 3,767 6,570 n/a n/a 4,412

EuropeCountry 1983 1990 1994 1995 1998 1999 2000 2001France 5,378 3,278 2,664 2,698 2,984 2,373 2,410 2,440

Germany 2,955 2,368 3,774 3,934 4,547 4,829 4,970 5,240Turkey* 195 597 789 820 941 976 n/a n/a

* Turkey 1990 data is for 1991Africa

Country 1983 1990 1994 1995 1998 1999 2000 2001South Africa 323 299 273 270 n/a 158 n/a n/a

Source: 2002 Motorcycle Facts and Figures, Honda Publishing

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STVP-2003-003 [Rev. January 17, 2004]

This case was written by Eric Cherng, Graduate Student, under the supervision of Thomas J. Kosnik, Consulting Professor, Stanford School of Engineering as

Exhibit 13: World Motorcycle Unit Sales

Country 1983 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Brazil 157,457 123,171 109,168 57,358 74,115 127,397 200,592 276,225 405,243 460,121 441,536 574,149 692,096China n/a n/a n/a n/a 3,300,000 5,100,000 7,800,000 8,837,000 9,715,575 7,976,000 10,142,000 12,203,181 12,130,478France 422,944 333,233 300,115 286,691 273,684 264,053 304,153 336,379 364,347 362,040 388,490 370,599 364,257Germany 392,202 171,224 209,051 275,137 295,533 337,341 406,291 449,050 453,573 417,879 398,046 362,704 339,141India 759,031 1,853,991 1,635,473 1,477,217 1,686,939 2,141,589 2,557,599 2,919,578 3,007,734 3,262,909 3,646,243 3,867,694 4,106,678Japan 2,418,309 1,618,933 1,580,499 1,445,450 1,254,254 1,193,611 1,212,852 1,219,916 1,188,238 1,062,980 836,959 779,877 750,686South Africa 21,728 5,336 5,558 5,756 5,850 5,980 6,150 6,293 12,210 11,062 7,933 7,891Turkey 12,413 65,157 60,331 65,332 55,454 45,576 35,598 77,400 93,582 35,945 n/a 12,600 33,516United States 735,400 303,000 280,000 278,000 293,000 306,000 309,000 330,000 356,000 432,000 546,000 710,000 850,000Vietnam n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 1,000,000 2,000,000Source: 2002 Motorcycle Facts and Figures, Honda Publishing, Frost & Sullivan 2002 Exhibit 14: World Motorcycle Unit Production

Country 1983 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Brazil 239,500 172,314 140,287 115,575 101,698 154,140 226,727 288,073 424,619 475,725 473,802 634,984 753,159China 286,332 965,768 1,317,345 1,982,187 3,367,986 5,227,021 7,836,139 9,295,185 10,037,403 8,793,443 ######### 11,533,848 12,366,966France 518,478 318,248 324,143 329,558 303,040 333,543 394,613 398,692 413,858 471,998 468,970 n/a n/aGermany 139,592 56,237 85,174 70,082 68,544 73,461 69,913 59,670 58,781 60,152 69,157 112,590 123,419India 759,183 1,875,522 1,601,333 1,477,217 1,664,427 2,127,437 2,551,128 2,978,975 2,971,290 3,294,424 3,598,855 3,752,475 4,323,644Japan 4,807,379 2,806,895 3,028,616 3,196,535 3,023,154 2,725,286 2,753,239 2,675,683 2,675,683 636,296 2,251,711 2,415,391 2,328,040Russia 1,127,000 1,400,914 1,306,946 604,000 526,000 19,000 70,500 41,000 62,686 n/a n/a n/a n/aSouth Africa n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aTurkey 45,275 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aUK 2,300 850 2,678 3,400 6,610 11,778 13,500 13,200 15,100 3,610 4,633 n/a n/aUnited States 100,000 62,272 6,620 76,951 84,693 96,027 115,530 129,432 143,965 n/a n/a n/a n/aVietnam n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 479,894Source: 2002 Motorcycle Facts and Figures, Honda Publishing; Econet 2002

the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It is a sequel to Note on the Global Motorcycle Industry 1995, STVP‐1998‐002

Copyright © 2003 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). To request permission to reproduce materials, contact 1‐650‐723‐2973, or email Professor Tom Kosnik, Director, Stanford Technology Ventures Program Case Development Factory at [email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Stanford Technology Ventures Program.


Exhibit 15: World Motorcycle Unit Exports

Country 1983 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Brazil n/a 15,460 13,191 35,596 15,805 13,940 12,930 14,913 16,415 20,374 32,598 60,260 60,190China 1,072 7,819 17,993 73,534 81,174 73,648 88,613 75,363 91,938 110,576 258,184 1,987,099 2,876,991France 244,902 196,929 205,562 203,365 149,744 167,895 193,402 190,566 225,682 291,319 385,339 n/a n/aGermany 41,811 35,542 49,309 39,185 26,339 29,004 33,410 44,963 44,392 55,171 59,852 72,629 80,392India n/a 13,050 26,317 34,505 102,809 67,102 112,343 125,131 122,732 104,626 82,698 115,223 n/aJapan 2,622,323 1,183,744 1,410,802 1,668,637 1,719,710 1,707,856 1,325,710 1,357,335 1,459,708 1,603,753 1,413,133 1,641,177 1,577,413Russia 12,453 44,547 32,707 26,379 39,213 n/a n/a n/a 22,015 20,449 13,430 n/a n/aSouth Africa n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aTurkey n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aUnited Kingdom 24,000 15,900 18,260 21,900 14,900 13,700 18,472 17,900 26,400 19,800 n/a n/a n/aUnited States 21,865 84,759 126,781 136,623 118,393 99,392 n/a n/a 112,464 122,031 109,036 n/a n/aVietnam n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aSource: 2002 Motorcycle Facts and Figures, Honda Publishing Exhibit 16: World Motorcycle Unit Imports

Country 1983 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Brazil n/a 3,000 5,000 2,000 2,400 4,400 10,700 15,000 17,700 13,207 n/a n/a n/aChina 10,201 11,571 2,362 6,994 240,445 333,780 46,248 2,911 1,498 308 1,756 1,538 1,833France 166,407 186,374 192,401 200,361 130,648 139,903 237,484 208,224 255,642 247,663 266,083 n/a n/aGermany 253,313 156,422 212,622 278,629 294,641 296,287 392,798 467,019 415,164 379,047 345,261 354,429 251,056India n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aJapan 7,099 28,696 27,601 30,178 32,025 32,005 43,936 39,088 44,998 52,746 60,183 74,906 101,265Russia 95,088 7,000 5,000 1,000 500 300 n/a n/a n/a n/a n/a n/a n/aSouth Africa n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aTurkey n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aUnited Kingdom 194,000 128,393 87,341 66,866 68,937 50,576 66,442 97,938 131,200 171,435 207,693 n/a n/aUnited States 561,858 181,067 195,848 258,478 260,040 236,315 269,895 255,661 306,549 325,396 452,036 n/a n/aVietnam n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/aSource: 2002 Motorcycle Facts and Figures, Honda Publishing

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Global Motorcycle Industry 2003

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