Consumer credit fears hit Harley

Harley-Davidson sees a bumpier road ahead

Motorcycle legend Harley-Davidson is throttling back production as a result of fears over US consumer spending.

The iconic motorbike maker expects shipments to dealers to fall below previous forecasts for late 2007 and 2008 and has withdrawn a 2009 forecast.

Harley-Davidson said it will ship between 86,000 and 88,000 motorbikes in the third quarter of 2007, down from a previous estimate of 91,000 to 95,000.

The company said it was dealing with "a difficult time for the US consumer."

Uneasy rider

Harley-Davidson chief executive Jim Ziemer explained that recent global credit fears were having an impact on the company's thinking.

"Against the current economic background, we no longer expect worldwide dealer retail sales to increase during the second half of 2007," Mr Ziemer said.

Harley-Davidson said earnings per share in 2007 would be around 4% to 6% lower than in 2006.

This marks an abrupt change to the group's optimistic outlook in July when it expected earnings per share to climb by 11% to 17% through 2008 and 2009.