Harley-Davidson Exits Sport Bikes; 3Q Profit Drops

DAN STRUMPF

DETROIT (AP) — With motorcycle sales still sluggish, Harley-Davidson Inc. said Thursday it is leaving the sport-bike market in a strategy to focus on its core lineup of heavyweight bikes.

The decision to discontinue its Buell motorcycle line and sell its recently acquired MV Agusta brand, while sudden, are the latest in a series of restructuring moves at Harley, which has been hit hard by the recession. Since early this year, the company has been cutting production and jobs and recently said it may relocate of its main motorcycle factory in Pennsylvania to save money.

"The return that we generate from a sale of an MV Agusta or even a Buell, it's far less than the return we get on a Harley-Davidson," CEO Keith Wandell told The Associated Press.

The decision to sell MV Agusta marks an about-face for Harley, which bought the Varese, Italy-based company last year for $109 million. At the time, Harley touted the purchase as an expansion into the premium sport-bike segment.

The Milwaukee-based company, which reported an 84-percent slide in third-quarter profit, will sell off its remaining Buell stock, including motorcycles, accessories and apparel, through its dealerships. Dealers will continue to offer replacement parts, warranties and service for Buell bikes. The line's closing will likely result in a $125 million one-time cost, with about $115 million of that amount this year.