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December 6, 2006

Ms. Linda Cvrkel
Branch Chief

Division of Corporation Finance
United States Securities and Exchange Commission
Mail
Stop 3561
100 F Street, N.E.
Washington, D.C. 20549

RE:
Harley-Davidson,
Inc.
Form 10-K for the year ended December 31, 2005
File No. 001-09183

Dear Ms. Cvrkel,

This letter sets forth the responses
of Harley-Davidson, Inc. (the “Company”) to the letter of the Securities and
Exchange Commission (the “Staff”) dated November 7, 2006, with respect to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005  and the
Company’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2006.
Harley-Davidson Financial Services, Inc. (“HDFS”) is a wholly owned subsidiary
of the Company. To facilitate your review, our responses below include the Staff’s
original comments and have been ordered using numbers that correspond with those set
forth in the Staff’s letter.

Form 10-K for the year
ended December 31, 2005

Item 6. Selected
Financial Data, page 29

1.
Please
revise future filings to either disclose or cross-reference to a
                    discussion thereof, any factors that materially affect the
comparability of the                     information provided in your Selected Financial
Data. Such items may include,                     but not be limited to, business
acquisitions or dispositions, accounting changes                     or other significant
our unusual items which may be helpful to an                     investor’s
understanding of the selected financial data. Refer to the
                    requirements of Item 301 of Regulation S-K.

Company
response:

In
future filings, the Company will include, under Item 6. Selected Financial Data, notes or
cross-references to information that describes factors, if any, that materially affect
the year-to-year comparability of data in the table. This information will be provided
consistent with the requirements of Item 301 of Regulation S-K.

1

Management’s Discussion and
Analysis
Results of Operations 2005 Compared to 2004, page 31

2.
We
note that your discussion of the changes in gross profit lists several
                    factors that contributed to the increase in gross margin from 2004 to
2005,                     however the factors are not quantified as to how much each
contributed to the                     increase. Please revise future filings to discuss
and analyze cost of sales                     (rather than margins) for each period.
Because margins are impacted by both net                     sales and cost of sales, we
believe a separate discussion of cost of sales would                     be beneficial.
Please expand your discussion of cost of sales and operating
                    expenses, or selling, administrative and engineering expenses to
quantify and                     discuss significant cost components within these broad
categories, such as price                     increases, product costs, product
development costs, marketing costs,                     depreciation and amortization,
and any other significant components that would                     enable readers to
understand your business better. For example, you state that                     the
increase in gross margin in 2005 was due in large part to the favorable
                    motorcycle product mix shipped during the year and also benefited
from wholesale                     price increases, lower costs from manufacturing
efficiencies and a decrease in                     compensation plan costs, but you do
not quantify these changes or provide the                     actual cost figures
necessary to put these changes in the proper context.

Company
response:

In
future filings, the Company will provide a separate discussion of cost of goods sold
under Management’s Discussion and Analysis of Results of Operations. The Company
will enhance its discussion of cost of goods sold and operating expenses by including,
when material, a quantification of the item(s) that drove the period-to-period changes in
these categories. The Company will also consider quantifying and disclosing significant
components of cost contained within the broader categories of “cost of goods sold” and
“operating expenses” when such items are material or otherwise meaningful to
understanding the changes occurring in the broader categories.

Critical Accounting Policies, page 39
—General

3.
We
note that your discussion of critical accounting policies includes finance
                    receivable securitizations, finance receivable credit losses, and
pensions. In                     future filings, please consider including a discussion
of stock based                     compensation, and the provision for income taxes as
part of your critical                     accounting policies. See SEC Release No.
33-8350.

Company
response:

In
future filings, the Company will include a discussion of the provision for income taxes
and stock based compensation as part of its critical accounting policies disclosure.

2

Pensions

4.
We
note your disclosure that as of the most recent measurement date you lowered
                    the discount rate assumption from 6.25% to 5.5% and reset the
assumption for                     healthcare trend rates. Please explain to us, and
disclose in future filings,                     the reasons for these changes in
assumptions.

Company
Response:

The
Company lowered its discount rate assumption and reset its assumption for healthcare
trend rates at its September 30, 2005 measurement date based on the factors set forth
below. A summarized rationale for such changes will be included in future filings.

Discount
rate:
The Company determines its discount rate assumptions by referencing high-quality
long-term bond rates. The Company also considers the duration of its own benefit
obligations in selecting an assumed discount rate. The Company’s information
regarding returns on high quality bonds at September 30, 2005 shows a Moody’s Aa
bond rate of 5.36%. In addition, utilizing a hypothetical yield curve developed from high
quality long-term bonds, with maturities that mirror the Company’s expected payouts,
the Company calculates a discount rate of 5.64%. Given this, a discount rate of 5.5% was
appropriate as of September 30, 2005.

Healthcare
trend rate:
The Company determines its healthcare trend assumption by considering factors
such as estimated health care inflation, the utilization of healthcare benefits and
changes in the health of plan participants.  This information is generally obtained
through analysis of the Company’s own healthcare cost data as well as through
reviews of external data including regional and national healthcare cost trends. Based on
the Company’s assessment of this data as of September 30, 2005, it reset its initial
healthcare cost trend rate to 10% and extended the date it expects to reach its ultimate
rate of 5% from 2007 to 2010.

Liquidity and Capital
Resources as of December 31, 2005 page 44

5.
We
note that your liquidity section includes a discussion of liquidity for the
                    years ended December 31, 2005 and 2004. In future filings, expand
your liquidity                     discussion to cover the three-year period covered by
the financial statements,                     using year-to-year comparisons or any other
format to enhance the reader’s                     understanding. Refer to
Instruction 1 to paragraph 303(a) of Regulation S-K.

Company
Response:

The
Company’s discussion of liquidity is intended to provide investors with an
understanding of its ability to meet its current and future cash requirements. In order
to demonstrate this ability, the Company has, in past filings, included a brief
discussion of year-to-year changes in cash flows. In future Form 10-K filings, the
Company will expand its year-to-year comparisons to include the third year of the
three-year period covered by the financial statements.

3

Consolidated Statements
of Cash Flows, page 54

6.
We
note your presentation of net (decrease) increase in finance-credit
                    facilities and commercial paper as a financing activity on the face
of the                     statements of cash flow. Please explain to us why you believe
it is appropriate                     to present the changes of the finance credit
facilities and commercial paper as                     “net” rather than “gross” on
the face of the statements of                     cash flow. Please note that we believe
that generally, information about gross                     amounts of cash receipts and
cash payments during a period is more relevant than                     information about
the net amounts of cash receipts and payments. See paragraphs                     11-13
of SFAS No. 95.

Company
Response:

The
finance debt arrangements of HDFS include commercial paper and borrowings under revolving
credit facilities. In 2003, 2004 and 2005, more than 95% of the maturities from
commercial paper and revolving credit facility borrowings were less than 90 days.

Paragraph
13 of SFAS No. 95 states that certain items, such as debt, qualify for net reporting
“because their turnover is quick, their amounts are large and their maturities are
short”. It also states that in order for debt instruments to qualify for net
reporting the original maturity of the liability must be three months or less.

Due
to the nature and terms of our commercial paper and revolving credit facility activity,
the Company believes that net reporting is appropriate for our borrowing activity.

7.
We
note your disclosure that a reclassification was made in December 2005 to
                    present the “origination of retail finance receivables held for
sale,”                    “collections on retail finance receivables held for
sale,” and                     “proceeds from securitization of retail finance
receivables” as                     operating activities, rather than investing
activities, in the statements of                     cash flows. Please explain to us the
basis for this reclassification made during                     December 2005, including
the nature of any changes in the business or in                     management’s
assumptions between December 31, 2004 and 2005. Describe for                     us in
detail why each of the amounts for “origination of retail finance
                    receivables held for sale,” “collections on retail finance
                    receivables,” and “proceeds from securitization of retail
finance                     receivables” were considered appropriately presented as
investing                     activities during the year ended December 31, 2004 but were
determined to be                     operating activities during the year ended December
31, 2005. In light of the                     reclassifications made to the statements of
cash flows for the year ended                     December 31, 2004, we do not understand
why the activities, regardless of                     whether finance receivables held
for sale were separately presented on the face                     of the balance sheet
in prior years, were not reclassified to cash flows from                     operating
activities during 2004. Also, please tell us why you believe the
                    changes to operating activities on the statements of cash flows are
                    appropriately presented as a reclassification rather than a
correction of an                     error. It appears based on the disclosures provided
in the notes to your                     financial statements that this should be treated
as a restatement of your                     financial statements.

Furthermore,
given that it appears to be a restatement, please tell us why the auditors have not
included a reference to the restated amounts in their audit opinion. Additionally, please
explain to us what consideration was given to this change in accounting for and
classifying the finance receivables in your balance sheet and statements of cash flows in
your evaluation of internal controls over financial reporting. Your response should
explain in detail why you do not believe this change in accounting or correction of an
error is not a material weakness in your internal controls. We may have further comment
upon receipt of your response.

4

Company
Response:

During
2005, the Company reviewed its process for funding its retail financing business,
including determinations whether to securitize its retail finance receivables. This
process generally involves considering a specified group of retail finance receivables
(which meet certain criteria) for securitization on a quarterly basis; however, the
frequency and timing of securitization transactions varies. The Company’s process
for determining its intent to securitize its retail finance receivables contemplates such
factors as the interest rate environment, competitive lending factors, credit mix of
retail finance receivables, as well as other sources of liquidity such as the Company’s
commercial paper program. In connection with the 2005 review, the Company formally
documented that during this process, these factors are contemplated at or prior to
origination and consequently, a determination of the Company’s intent to securitize
certain finance receivables is made at origination. Accordingly, the Company began
classifying these retail finance receivables as “held for sale” in the balance
sheet and their related cash flows have been included in the operating section of the
statement of cash flows.

The
Company also considered its prior year retail finance receivable activities and related
financial statement presentation in light of the review performed in 2005 and determined
that many of the same evaluative criteria resulting in the 2005 classification of the
retail finance receivables as held for sale existed in 2004 and 2003 as well.
Consequently, the presentation of retail finance receivable amounts related to prior
periods for retail finance receivables meeting the same criteria was conformed to the
2005 presentation in the Company’s 2005 financial statements.

In
evaluating the materiality of conforming the prior period presentation to the 2005
presentation, the Company considered both the quantitative and qualitative factors
established in the Staff Accounting Bulletin Number 99 – Materiality.

The
Company considered the following specific factors:

•
The
Company has a track record of increasing cash flows from operating activities from year
to year; reclassifying the cash flows did not have an effect on this trend from 2003 to
2004.

     Cash from operations

in millions
     2005
     2004
     2003

Original presentation

       n/a

     $  969.7

     $  662.7

     Reclassification
       n/a

       137.5

       66.2

     Presentation in 2005 Form 10-K
     $  960.5

     $  832.2

     $  596.5

•
The
reclassifications had no impact on the total cash flows in 2004 or 2003.

•
Prior
to the reclassification, finance receivables held for sale were combined with finance
receivables held for investment under line items captioned “Current portion of
finance receivables, net” and “Finance receivables, net” (non current
assets). As a result of the reclassifications, finance receivables held for sale were
segregated under a new line item captioned “Finance receivables held for sale.” Therefore,
the sum total of line items captioned “Finance receivables…” was not
affected by the reclassification, nor were any other balance sheet line items.

5

•
The
reclassifications had no effect on reported net income or earnings per share and as a
result did not have any effect on the Company’s performance relative to the
published expectations of outside analysts or in any way impact the Company’s
earnings-based incentive pay programs.

•
The
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