More Auto Owners Turning to Motocycles

Although Harley Davidson (HOG) earlier in the year dramatically reduce EPS estimates, I am beginning to think we may see them eclipse them when they report.

In early May I noted additional evidence that consumers were turning to two wheels as gas prices climbed toward $4 a gallon.

Now that is has hit $4 nationally, it seems to flow is turning into a flood.

NBC San Diego reported that Harley Davidson dealerships in the area are seeing huge response to $4 gas.

“We’re seeing a huge influx of new riders coming in,” said Mike Moran of San Diego Harley-Davidson. “It’s been incredible.”

Because of gas prices, sales have increased dramatically, say workers at the business.

“I drive a 1990 Ford Bronco,” customer Warren Deeds said. “I get, like, 13 miles a gallon, and being a bigger guy, I don’t fit into the more fuel-efficient smaller cars, so I was looking at motorcycles today.”

Deeds and his friend Joey Claiborne are both in the market for new rides.

“If I can get 30 mpg –a lot, probably a couple of hundred a month, probably a little more,” Claiborne said, discussing how much money riding a motorcycle could save him.”

Previous reports of increasing Harley sales were from Illinois, Florida and LA. HOG predicted an 8% drop in motorcycle sales this year ans that will be the key measure when earnings are reported mid-July.

I for one will not be surprised and do expect to hear that trend are improving in terms of sales. Now, the performance of HDFC will have a large impact on results but I expect those who have sold the stock expecting dire news are going to be disappointed.

Disclosure (“none” means no position):Long HOG

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