Uneasy ride for Harley-Davidson

Harley says its brand strength will see it through a challenging period

The slowing US economy has hurt sales of Harley-Davidson motorbikes and forced the iconic company to reduce production and cut jobs.

Harley sold 14% fewer bikes in the US in the first three months of the year than in the same period in 2007.

Looking forward, it expects the market to remain tough and plans to produce up to 27,000 fewer bikes than last year.

But Harley said it was "optimistic" about its long-term prospects because of its strong brand identity.

'Challenging environment'

Its US sales during the past quarter had been "disappointing", Harley admitted, but the company said it had outperformed the market as a whole.

Overseas sales remained strong, rising 17% over the period, but this was not sufficient to stop the firm's profits from falling 2.5% to $192.3m (£97m).

Harley is preparing itself for a tough period ahead by cutting 730 jobs, both on the shop floor and in support functions.

It will also temporarily shut some of its plants to reflect the slower rate of production.

"We believe these actions will better position the company for a business environment that we expect to continue to be challenging," said chief executive Jim Ziemer.

But he added: "Harley-Davidson is fortunate to be dealing with the current economic environment from a position of financial strength."