Harley Davidson 2015 Annual Report Download - page 4

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parts (Genuine Motor Parts) and mechanical and cosmetic accessories (Genuine Motor Accessories). General Merchandise
includes MotorClothes® apparel and riding gear.
The following table includes the percent of total revenue by product line for the Motorcycles and Related Products
segment:
2015 2014 2013
Motorcycles 77.8% 78.8% 77.4%
Parts & Accessories 16.2% 15.7% 16.6%
General Merchandise 5.5% 5.1% 5.6%
Other 0.5% 0.4% 0.4%
100.0% 100.0% 100.0%
Harley-Davidson manufactures cruiser and touring motorcycles that feature classic styling, innovative design, distinctive
sound, and superior quality with the ability to customize. The Company primarily produces on-road motorcycles with engine
displacements of 601cc and greater. Its engines range in displacement from 494cc to 1802cc.
The on-road motorcycle market is comprised of the following categories:
• Cruiser (emphasizes styling and owner customization);
• Touring (emphasizes rider comfort and load capacity and incorporates features such as saddlebags, fairings, or large
luggage compartments);
• 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); and
• Dual (designed with the capability for use on public roads as well as for some off-highway recreational use).
The cruiser and touring categories were pioneered by the Company. In 2014, the Company unveiled Project LiveWire™,
an electric motorcycle it is developing and continues to evaluate for possible distribution.
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 motorcycles 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 considers the availability
of a line of motorcycle parts and accessories and general merchandise, the availability of financing through HDFS and its
global network of premium dealers to be competitive advantages.
In 2015, the U.S. and European markets accounted for approximately 78% 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 for the Company, based on the Company's retail sales data, are Japan, Australia and Canada.
Harley-Davidson has been the historical market share leader in the U.S. 601+cc motorcycle market. According to the
Motorcycle Industry Council (MIC), the cruiser and touring categories accounted for approximately 76% of total 2015 601+cc
retail unit registrations in the U.S. During 2015, the 601+cc portion of the market represented approximately 85% of the total
U.S. motorcycle market in terms of new units registered.
The following chart includes U.S. retail registration data for 601+cc motorcycles for the years 2013 through 2015:
U.S. Motorcycle Registration Data(a)(b)
601+cc (Units in thousands)
2015 2014 2013
Total new motorcycle registrations 328.8 313.6 305.9
Harley-Davidson new registrations 165.1 167.1 167.8
50.2% 53.3% 54.9%
(a) Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled vehicles and
beginning in 2014, autocycles. Registration data for Harley-Davidson Street 500® motorcycles is not included in this
table.