ce. For such products, a high price can be an indica-tor of quality [K1, p. 395]. It is true that if not for the tariff, much business would be lost to lower-priced Japa-nese imports of compara-tive machines, but not all the market would re-act in this way.Place. One of the fastest-growing sales areas for Harleys has been overseas, particularly Japan [ W1, p. 27]. In 1989, 22% of sales were to foreign markets, and this figure increased to 30% in 1990 [S3, p. 1097D]. The actual number of bikes exported in 1990 was 15,000, giving the com-pany 15% of the world market for heavyweight motorcycles. The export figure for 1991 was estimat-ed at 25,000, or 35% of the firm's total sales [H1, p. 48].It is in the domestic market, however, that Harley's distri-bu-tion excels. There are 650 U.S. dealerships [S2, p. 109]. Howev-er, although adding many more dealerships would pre-sumably further increase sales--particularly because it would allow greater cover-age of rural ar-eas where motorcycling is a common pastime--this is not possible, for quality reasons which will be explained below. In 1969, Harley merged with the American Machine and Foundry Co. (AMF). This firm took over leadership and proceeded to triple Harley's production, apparently on the idea that this would increase profits by a similar proportion. But as might have been expected, quality suf-fered greatly, and this was a major cause of the company's severe slump [H3, p. 155; G1, p. 8]. Harley executives bought back the company in 1981.If the firm would produce 500 bikes per day, it could sell them all, for as one analyst put it, "'Dealers are starved for prod-uct.'" In 1989, 265 bikes per day were made, and the 1990 goal was 285 [H1, p. 48]. This would amount to about 85,000 annually, assuming a 300-day work year. While this is still far short of demand, the company adamantly refuses to compromise quality, fearing a repeti-tion of the crisis it underwent before. In the...
