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Harley dealers CUs capturing financing
MILWAUKEE (5/29/09)--Harley-Davidson dealers, who say motorcycles sales are down this year, are complaining about losing financing business to credit unions. The survey of 75 Harley dealerships, conducted in late April and May by Robert W. Baird and Co., noted that new-bike sales dropped between 20% and 25% from a year ago. Used-motorcycle sales declined between 5% and 10% (Milwaukee Journal Sentinel May 27). Of the respondents, 63% indicated they were selling bikes below the manufacturer's suggested retail price. Last year for the same period, 36% of the dealers said they were doing so. One dealer criticized the drop in prices, saying it makes things worse. Dealers are also dealing with tighter consumer credit. Some of those surveyed said their consumer financing arm, Harley-Davidson Financial Services (HDFS), is charging too much in interest rates for people with good credit scores. They complained about losing motorcycle financing business to credit unions. "All we are getting are the marginal-credit customers, which makes our portfolio with HDFS look bad," one dealer said. Some credit unions have coped with the economy's downturn and its effect on the auto industry by offering leading edge rates for motorcycles (News Now May 13, 2008 and June 9, 2008). Last year's increase in gasoline prices prompted some credit unions to offer deals on cycles. One credit union said it would be more aggressive in expanding membership lending for autos, Harley Davidson motorcycles and recreational vehicles (News Now May 23, 2008).
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