Harley-Davidson Inc and Polaris Industries Inc said on Thursday that cash- strapped consumers steered clear of their big, high-end motorcycles in the second quarter and warned demand would likely remain stalled for the rest of 2009.

Both companies said they were responding to the marked deterioration by making additional cuts to bike production. Harley-Davidson, which has already laid of about 1,500 workers, said it would cut another 1,000 jobs and accelerate some previously announced plant closures.

Harley's cuts were especially dramatic. The Milwaukee-based company said it would now ship between 212,000 and 228,000 of its namesake motorcycles to dealers and distributors worldwide in 2009, down 25 percent to 30 percent from 2008.

Ed Aaron, an analyst at RBC Capital Markets, called Harley's latest production cuts massive ... more than what either the buy- or sell-side was expecting and wondered how Harley would be able to sustain its gross margins given the inherent operating leverage in Harley's model.

But Goldman Sachs analyst Patrick Archambault said the cuts would translate into a significant reduction in dealer inventory which will ultimately better position the company for 2010 -- an interpretation that helped send Harley's shares higher.

Not everyone was impressed. Standard & Poor's cut Harley to sell from hold, saying the results suggested far worse selling conditions than expected and that economic pressures on consumer spending will depress results through 2010.

The production cut announcements came as Harley and Polaris reported second-quarter earnings.

Harley's results disappointed analysts, pulled down by -- among other things -- $72.7 million credit loss provision at its captive finance arm.

The numbers from Polaris, which makes Victory brand bikes, topped expectations, thanks to stronger sales of its side-by- side all-terrain vehicles

But both companies said bikes sales were continuing to soften. Indeed, during the second quarter, industry-wide retail sales of the heavyweight motorcycles Harley and Polaris make tumbled 48 percent.

Motorcycle demand was much weaker than expected a few months ago, said Deutsche Bank analyst Rod Lache.

The shares of Harley, which saw its market share grow last quarter, were up 8 percent at $18.88, while Polaris, which saw its already tiny market share fall during the period, were down about 5 percent at $31.89 in afternoon trading.

(Reporting by James B. Kelleher; editing by Andre Grenon)