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Discussion Starter · #1 · (Edited)
Royal Enfield has just revealed 2 pretty neat bikes, which MAY tip the scales in their favor:
The Continental G650 and INT 650.
$5800 for a solid little performer.

I think the kids will love it. First it's not their dad's Harley. Second-- they can AFFORD it at $5800. Third, it begs to be customized.
Any kid with a decent credit score and a $10 hour job can afford a brand new bike.

Harley should've done it. Their small bikes are ugly and unloved by the public.
Here Are the 2 Motorcycles Harley Should Have Made -- The Motley Fool

View attachment 507661
 

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Royal Enfield has just revealed 2 pretty neat bikes, which MAY tip the scales in their favor:
The Continental G650 and INT 650.
$5800 for a solid little performer.

I think the kids will love it. First it's not their dad's Harley. Second-- they can AFFORD it at $5800. Third, it begs to be customized.
Any kid with a decent credit score and a $10 hour job can afford a brand new bike.

Harley should've done it. Their small bikes are ugly and unloved by the public.
Here Are the 2 Motorcycles Harley Should Have Made -- The Motley Fool

View attachment 507661
And where are those bikes made at ? India you say ?. Its hard for Harley to make cheap bikes with their labor cost. On average Harley pays 8 dollars an hour more than Polaris so imagine the difference in labor cost from a bike made in India with that cheap labor over there.
 

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So the Indian Scout sixty starts at 8999.99 and the Harley Street 500 starts at 6899.99
My question is this. How can Harley make a 5800.00 bike with out going overseas ? The Street bikes built in the US are already loss leaders.
There's a reason why there are no foreign manufacturers of motorcycles in the US. The reason is its cheaper to build overseas and ship the products here.
 

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Maybe if the US didn't tax the raw materials and parts to make the bikes out of so heavily it would be cheaper to build them here? Maybe if the company didn't pay the CEO a ten million dollar bonus every year that would lower costs by...I don't know, about ten million dollars? Modern assembly lines produce motorcycles without needing a large number of man-hours per unit. Europe has higher labor costs than the US but still manages to compete. Making poor people poorer is not the only way to cut costs.
 
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The HD Street 500 is over priced imo. I’d have RE Conti GT over that HD junk.
 

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Maybe if the US didn't tax the raw materials and parts to make the bikes out of so heavily it would be cheaper to build them here? Maybe if the company didn't pay the CEO a ten million dollar bonus every year that would lower costs by...I don't know, about ten million dollars? Modern assembly lines produce motorcycles without needing a large number of man-hours per unit. Europe has higher labor costs than the US but still manages to compete. Making poor people poorer is not the only way to cut costs.
All the major motorcycle manufacturers are building in Thailand now to make a profit. Some like BMW are using engines sourced from China and South Korea.
As far as CEO pay Scott Wine makes double the pay of Matt Levitech.
 

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The math is difficult without having more hard data but we can make some rough estimates. Harley has a total of about 6000 employees. Many of those are temp or part time so the total hours equivalent will be much lower. So if we assume with all the temps and pt hours combined is equivalent to 4000 workers, and they make 250k bikes a year, that's 62-63 bikes a year per 40/hr work week laborer. Or approximately 30 hours of labor per bike. So if Harley paid workers an extra 10 dollars an hour that would only add about 300 dollars to the cost of each bike. Significant yes. But not the reason, certainly not the sole or even main reason that Sportsters cost more than Royal Enfields.
 
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The math is difficult without having more hard data but we can make some rough estimates. Harley has a total of about 6000 employees. Many of those are temp or part time so the total hours equivalent will be much lower. So if we assume with all the temps and pt hours combined is equivalent to 4000 workers, and they make 250k bikes a year, that's 62-63 bikes a year per 40/hr work week laborer. Or approximately 30 hours of labor per bike. So if Harley paid workers an extra 10 dollars an hour that would only add about 300 dollars to the cost of each bike. Significant yes. But not the reason, certainly not the sole or even main reason that Sportsters cost more than Royal Enfields.
Per the union contract only 30% of the work force is casual employees. Now the lowest wage for full time union worker at Harley is 25.00 an hour with the highest over 32.00 so labor cost is a significant difference. When Polaris shut down that plant and moved it to Mexico Scott Wine said the reason was cheaper labor would give them a competitive advantage.
The average hourly rate of pay for assembler in India is Rs 50.47 in US dollars that's .72 cents an hour !
 

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Per the union contract only 30% of the work force is casual employees. Now the lowest wage for full time union worker at Harley is 25.00 an hour with the highest over 32.00 so labor cost is a significant difference. When Polaris shut down that plant and moved it to Mexico Scott Wine said the reason was cheaper labor would give them a competitive advantage.
The average hourly rate of pay for assembler in India is Rs 50.47 in US dollars that's .72 cents an hour !
Um...you don't actually believe Scott Wine do you?
 

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Discussion Starter · #15 ·
And where are those bikes made at ? India you say ?. Its hard for Harley to make cheap bikes with their labor cost. On average Harley pays 8 dollars an hour more than Polaris so imagine the difference in labor cost from a bike made in India with that cheap labor over there.
It's made in India.
Much of a Harley comes from China.

Do you seriously think 2 wheels and an engine should cost as much or more than a new car? Harley does.

Harley is entering the India market. They are beginning to build in India themselves in their own plant. That's the market they're after.

I find it funny (ironic maybe) that this huge, motorcycle-focused company can keep missing the mark on a fun, good looking affordable bike that hits the current Millennial target.
This Royal Enfield they have come out with may really give them a larger market share...
Maybe not.
 

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Discussion Starter · #16 ·
And where are those bikes made at ? India you say ?. Its hard for Harley to make cheap bikes with their labor cost. On average Harley pays 8 dollars an hour more than Polaris so imagine the difference in labor cost from a bike made in India with that cheap labor over there.
Did you read the Motley Fool article?

The point is the BIKE, not so much the price.

The BIKE hits the target as well as the PRICE.

The entry level HD's are awful looking.
 

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It's made in India.
Much of a Harley comes from China.

Do you seriously think 2 wheels and an engine should cost as much or more than a new car? Harley does.

Harley is entering the India market. They are beginning to build in India themselves in their own plant. That's the market they're after.

I find it funny (ironic maybe) that this huge, motorcycle-focused company can keep missing the mark on a fun, good looking affordable bike that hits the current Millennial target.
This Royal Enfield they have come out with may really give them a larger market share...
Maybe not.
So you really don't see the competitive advantage of much lower wages ? Victory and Indian are prime example of what you can do with lower wages. With lower wages you can add more content and value to a product.
You forget that there's a large amount of Chinese parts in your Indian too. Look at Polaris 3rd quarter earnings transcript.
 

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Did you read the Motley Fool article?

The point is the BIKE, not so much the price.

The BIKE hits the target as well as the PRICE.

The entry level HD's are awful looking.
I agree the Streets could have should have been a better design.
I read the article and I'm explaining why they can't build those bikes at that price.
 

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Discussion Starter · #19 ·
"Despite Royal Enfield's much smaller footprint in the U.S., it remains the world's largest and oldest continuously operating motorcycle manufacturer. In its last fiscal year, which ended in March, Royal Enfield's sales volume jumped 23% to over 8.2 million motorcycles. In comparison, Harley sold fewer than 243,000 motorcycles worldwide in 2017." (Motley Fool)

I didn't realize that Royal Enfield had this kind of sales. Now they're targeting the sweet spot in motorcycle sales with their new bikes.
 

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Discussion Starter · #20 ·
So you really don't see the competitive advantage of much lower wages ? Victory and Indian are prime example of what you can do with lower wages. With lower wages you can add more content and value to a product.
You forget that there's a large amount of Chinese parts in your Indian too. Look at Polaris 3rd quarter earnings transcript.
It's about the bike. The target audience.
Harley already has a plant in India.
Harley already sells a 500cc bike for $6900.

HD is counting on big heavy bike sales and has only seen small bikes as a way to get girls into riding. Throw away bikes.
They didn't see that the smaller edgier bikes are the TARGET, not the stepping stone.
 
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