Harley CEO says some dealers out of Sportsters

By James B. Kelleher

CHICAGO (Reuters) - Harley-Davidson Inc's (HOG.N: Quote, Profile, Research, Stock Buzz) chief executive said on Thursday the company's U.S. dealers were selling out of motorcycles from its economical Sportster line, suggesting some bike buyers are downsizing their two-wheel dreams in the face of rising gas prices, falling home values and tighter credit.

Harley CEO Jim Ziemer said in an interview with Reuters that the Sportster's popularity had prompted the company to accelerate delivery of its new line of bikes. The company is due to unveil its 2009 model lineup at a dealer event next week.

"A number of dealers are out Sportsters as we finish 2008 and that encouraged us to start shipping our '09s a couple weeks early," Ziemer said. Sportsters are entry level Harleys that start at about $7,000 and get better gas mileage than other bikes the company sells.

Asked why the Sportsters were doing well, Ziemer said, "They get the best gas mileage, and they're our lowest priced models ... So it's either the price point or the gas mileage or a combination."

Ziemer said that while he was pleased with the 9 percent retail sales growth the company had in Europe in the second quarter, there were pockets of weakness, including the United Kingdom, which he said was "a little bit softer than the other markets" in the region.

He also said that slowing sales growth in Europe could translate into slower market share gains there.

"In the last three years, where we've been growing double-digits, we've been picking up market share," he said, "and we suspect that we will pick up market share but not to the same extent."

Ziemer's comments came after Harley reported better-than-expected earnings.