Distribution-United States. The Company’s basic channel of distribution in the United
States for its motorcycles and related products consists of approximately 648
independently-owned full-service Harley-Davidson dealerships to whom the Company
sells directly. This includes 439 combined Harley-Davidson® and Buell® dealerships.
There are no Buell-only dealerships. With respect to sales of new motorcycles,
approximately 81% of the U.S. dealerships sell the Company’s motorcycles exclusively.
All dealerships stock and sell the Company’s genuine replacement parts, accessories, and
MotorClothes™ apparel and collectibles, and perform service for the Company’s
motorcycles. The Company also sells a smaller portion of its parts and accessories and
general merchandise through “non-traditional” retail outlets. The “non-traditional”
outlets, which are extensions of the main dealership, consist of Secondary Retail
Locations (SRLs), Alternate Retail Outlets (AROs), and Seasonal Retail Outlets (SROs).
SRLs, also known as Harley Shops, are satellites of the main dealership and are
developed to meet the service needs of the Company’s riding customers. Harley Shops
also provide replacement parts and accessories and MotorClothes apparel and collectibles
and are authorized to sell new motorcycles. AROs are located primarily in high traffic
areas such as malls, airports or popular vacation destinations and focus on selling the
Company’s MotorClothes apparel and collectibles and licensed products. SROs are
located in similar high traffic areas, but operate on a seasonal basis out of temporary
locations such as vendor kiosks. AROs and SROs are not authorized to sell new
motorcycles. There are approximately 85 SRLs, 55 AROs, and 10 SROs located in the
Distribution-Canada. In Canada, there are approximately 75 independent Harley-
Davidson® dealerships, one independent stand-alone Buell® dealership, and 6 AROs, all
served by a single independent distributor, Fred Deeley Imports Ltd. This network
includes 42 combined Harley-Davidson and Buell dealerships resulting in a total of 43
Buell dealerships in Canada.
h-dnet.com is a secure web site that dealers access with a user i.d. and password. This internet-
based communications tool allows you to interact with Harley-Davidson and conduct a variety of
business functions seven days a week, 24 hours a day.
Harley-Davidson also helps build dealer sales through the E-Commerce program. Simply put, E-
Commerce allows riders to shop from a qualified dealership "on-line" anytime. This web site is
maintained by Harley-Davidson, and qualified E-dealers simply use their existing computer systems
to process orders for customer pick-up or delivery.
Our TALON® "Windows" based computer system links us to our dealer network and gives our
dealers direct access to our database in Milwaukee. Ordering product, learning about new product
offerings, and inquiring about the status of placed orders, is a quick and simple process.
Harley-Davidson conducts its own market studies when considering expansion of the dealer
network. This enables the company to view many market areas in a similar manner, optimizing
consistent and accurate results. Based on the results of these studies, Harley-Davidson selects the
markets and locations where new dealerships will be established.
New Dealership Location — Harley-Davidson completes market studies throughout the country to
determine the need for new dealership locations based on market needs. Once a new point has
been determined, Harley-Davidson searches its internal prospect database and also advertises in
the local newspaper to begin the interview process with potential candidates.
The investment requirements vary and are dependent on the market study information and industry
data for each location. Harley-Davidson does not require any fee for obtaining a Harley-Davidson
All our dealers are independent business people. Each dealer operates under a contract with Harley-
Davidson Motor Company to retail certain Harley-Davidson® motorcycles, Finance and Insurance
(F&I), Parts & Accessories, and MotorClothes® apparel and collectibles.
Regardless of the investment requirements for a particular dealership opportunity, Harley-Davidson
Motor Company has also established minimum financial requirements for dealer prospects. These
financial requirements ensure the strength of the candidate and continued growth of the business.
The minimum requirements that Harley-Davidson looks for when reviewing inquiries are as follows:
New Dealership Location - $1 million net worth, $600,000 unencumbered funds (liquid assets).
Refer to the investment requirements example.
Harley-Davidson does not charge a franchise fee. Harley-Davidson dealerships are not franchises-
they are independently owned and operated businesses.
Harley-Davidson Motor Company sells only through its authorized dealer network.
We also established and expanded our network of exclusive Honda dealers, to ensure a
more accurate and widespread understanding of our marketing initiatives and product
By 1986, approximately 70% of the outlets selling our automobiles in the United States
were exclusive Honda dealers – the highest ratio in the industry. With more than 900
dealers nationwide, we had established a strong sales network that customers could trust.
Seeking to further broaden its customer base, American Honda decided to set up a second
dealership network devoted to luxury performance models. This resulted in the
establishment in 1986 of the Acura network, which began with sales of the Legend and
Today, there are 1,270 Honda dealers throughout the United States, including 262 Acura
American Honda Motor Co., Inc. (100%) U.S.A.
Distribution of Honda products
Honda funds its financial programs for customers
and dealers primarily from corporate bonds, medium-term notes and
commercial paper, as well as securitization of finance receivables.
According to the National Automobile Dealers Association (NADA), total dealership revenue reached
almost $700 billion in 2003. Service and parts departments contributed 46% of total operating profits at
the average dealership.
There were 25,200 separate new car dealer franchises listed in the 1997 U.S. Economic Census.
Worldwide there are an estimated 73,000 new car dealerships, 3,200 heavy truck dealers, 448,000
Repair Shops, and 48,000 tire dealers. In total these enterprises employ more than 1.37 million
technicians, with 875,000 technicians employed in the U.S. by new car dealers and aftermarket repair
Norm Reeves Honda Superstore, Cerritos, CA, the world's largest Honda auto dealer. The Nomad
System is the world's first wearable, wireless computer with a head-worn, head-up display, providing
automotive technicians and service advisors with hands-free access to online vehicle history and
repair information while they work on vehicles or consult with customers. Service personnel can
provide faster, more accurate service and repairs with critical information superimposed in their vision
as they work. The Nomad System was recently awarded the prestigious 20 Top Tools Award by
Hearst Publishing's Motor Magazine.
The Nomad Expert Technician System enables automobile dealerships to increase service revenue
and profitability as well as improve service quality and customer satisfaction - equally important, as
more than 50% of a typical dealer's gross profits come from service operations while high customer
repair satisfaction is directly correlated with customer retention.
Most of Honda’s products are distributed under registered Honda trademarks in Japan and/or in
overseas markets. Major trademarks include HONDA, ACURA, ACCORD, CIVIC, FIT, ODYSSEY, CR-V,
PILOT, MOBILIO, ELEMENT, STEP WGN, MDX, STREAM, LIFE, ACTY, VAMOS, THAT’S, CUB,
WAVE and GOLD WING. http://www.hoovers.com/free/co/secdoc.xhtml?ipage=2884289&doc=1
Honda markets its products through a sales network of approximately 1,270 independent local dealers for
automobiles, approximately 1,250 for motorcycles and approximately 5,400 for power products. Many of
the motorcycle dealers and some of the automobile dealers also sell Honda’s power products. In 1986,
Honda opened the first Acura automobile dealerships in the United States. The Acura network totaled 262
dealerships at the end of fiscal 2004. The Acura network offers the RSX, TL, CL, TSX, RL, NSX MDX and
EL (Canada only) models.
Honda provides its overseas operations, joint venture firms, independent distributors and licensees with
spare parts and necessary technical information, which they in turn supply to wholesale or retail dealers,
either directly or through one or more spare parts distributors.
Number of employees
Number of employees at March 31, 2004 are as follows: