Addressing the future of Harley-Davidson’s financial services division
July 17, 2009
Filed under From the Editors
Harley-Davidson Inc.'s new CEO, Keith Wandell, provided some interesting insight yesterday on the future of the company's financial wing and whether changes are likely in that part of the OEM's business.
Wandell addressed the topic after Harley-Davidson announced it had suffered more than $60 million in losses in the second quarter in its Harley-Davidson Financial Services (HDFS) division. Of course, that loss was due mostly to a one-time credit loss provision of $72.7 million.
In wake of that loss, Wandell was asked during the company's second-quarter earnings report if Harley-Davidson was reconsidering HDFS or at least considering using a third party for some of its retail financing.
His response: "That's one of the learnings for me in the first couple of months here, and I'm convinced. Having met with several of our dealers, both on the dealer town hall circuit as well as our dealer advisory council and through a lot of different visits to dealerships, that HDFS is clearly a strategic asset and advantage for our company and our dealers. And I think that shows up in our market share gains despite the fact that the market is down in total. We've still gained market share and we believe it's largely due to our ability to provide both wholesale floor plans as well as retail loans and insurance and extended service plan opportunities in a one-stop shop for our dealers.
"Saying that, it's also very clear that we have to find lower sources of funding for that business."
Something else to consider in this issue: HDFS is being impacted in Harley's most recent round of layoffs, which were announced yesterday. Of the 300 salaried employees that Harley will layoff, 100 will be from HDFS, the company said.