Honda will not be Buying Harley-Davidson : New Harley davidson review

Honda will not be Buying Harley-Davidson : New Harley davidson review
by Evander Klum
Japanese automaker Honda Motor Co. has recently denied rumors alleging that it will buy Harley-Davidson Inc., which caused the US motorcycle maker's share to rise in New York last Friday. But just in case Honda and Harley do combine, their union would be able to control 65 percent of the US motorcycle market while its next leading competitor Yamaha will be left with only 16 percent. Such type of stronghold on the motorcycle market would definitely not please the Federal Trade Commission. Honda through its spokeswoman Yoshido has extended their stand on the issue. According to Honda spokeswoman Makiko Yoshida in Tokyo last Monday, "There's absolutely no truth to it." Amidst doubts from analyst and market participants, Harley-Davidson shares and options were able to increase with 58,535 options last Friday which is fourteen times more than the daily average that is basing from the figures gathered by market research firm Track Data. RBC Capital Market Analyst, Edward Aaron in an interview with Forbes.com last Friday said, "I'd be surprised if there was a Honda and Harley-Davidson combination, basically for regulatory and cultural reasons." He also added, "Harley is an iconic, American brand. I don't think it would be a great fit if they were under the ownership of a larger Japanese corporation." Aaron further stated that it was unlikely that Harley would become the target of a buyout. He said, "Although an LBO is more plausible than a merger with Honda, the math behind such a transaction is not highly compelling." And besides Harley is already a well operated business with a high margin profile and it's not a good business sense for an LBO investor to shell out a significant premium and be able to generate a fitting return. Harley's share gained as much as 6.4 percent before closing last Friday's session by $2.43 or about 4 percent at $62.55 on the New York Stock Exchange. On the other hand, the shares of Honda, the world's biggest motorcycle maker and producer of high quality Honda exhaust system have gained very little increase in Tokyo with only 0.5 percent last Monday at 4,420 yen. Honda Tidbits For the past 50 years, Honda has made racing as its training ground for challenging the abilities of both its engineers and designers. Soichiro Honda said that the pressures that people gets from racing encourages them to seek for innovative solutions and demands fast, precise responses to new problems that they have not encountered before. This is also the very reason why racing is embedded in the corporate culture of Honda. Aside from that racing also teaches people how to work harmoniously with each other since in racing no single individual can bring success to the team because it is a group effort. Throughout the racing history of Honda either it be in two wheels or four, the Japanese automaker has been able to win at the highest levels. From the Isle of Man TT motorcycle race to Formula One Grand Prix, Honda was able to obtain 60 race victories and four consecutive Constructors' Championships from 1988 to 1991. Various Honda models are displayed in victory lanes around the world.