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T H E # 1 B U S I N E S S M A G A Z I N E F O R T H E A M E R I C A N V- T W I N A N D C U S T O M M O T O R C Y C L E PA R T S I N D U S T RY
More lay-offs loom at Harley as second
AUG 2017
ISSUE #217
quarter domestic U.S. sales plummet ahead
of significant peak season market decline FREE
WITH
he shocking headline news quarter shipments were 81,807 units of channel inventory levels not just a
is that Harley-Davidson’s (down by -7.2 percent on Q2 2016 and first quarter fix, as originally suggested. THIS
second quarter domestic are 152,638 for the half year (down by The cut in production will result in
U.S. sales were down a massive - -10.8 percent of the first half of 2016). further lay-offs, likely of hourly paid ISSUE
9.3 percent compared to the Touring model sales were up by +13.4 staff, as the company continues to
T
second quarter of 2016, a result
that is way worse than the one
they were expecting in a peak
selling season where total
domestic U.S. new motorcycle
sales were down by around 7
percent for the quarter.
This puts Harley’s domestic sales down
by - 7.9 percent for the first half of the
year and leaves their domestic market
share in the 601+cc category at 48.5
percent for the second quarter
(compared to 49.5 percent for Q2 in
2016) and at 49.6 percent for the first
half year 2017. The company is citing
“weak industry sales on soft used bike
process” as among the Q2 impactors.
The company says that dealer inventory
is down by approximately 7,200
motorcycles year on year and that it will
further cut production with its revised
unit shipments now forecast at
between 241,000 and 246,000 for the
full year 2017, 39,000 to 44,000 of
them in Q3 – down by between 10 and
20 percent from Q3 2017. Total second
RMOT
TE
percent for the quarter, at 44.8 percent
of the model mix, and are 43.1 percent
of the mix YTD, up by +4.4 percent;
their Street/Sportster lines were 24.3
percent of Q2 shipments, but Cruisers,
which includes V-Rods and CVOs as
Harley shares
tanked
-11 percent
well as Softails and Dyna models, were
down by -11.8 percent in terms of the
overall model mix, at 30.9 percent of
the total (33 percent/-4.7 percent
YTD).
Originally the company had forecast
that 2017 would be “flat to modestly
down for them,” but they are now
having to accept that the “new
normal” Levatich referenced in
February means “down double digits”
for the year, with massive restructuring
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“aggressively manage our cost
structure,” CEO Matt Levatich said, in
acknowledging the “unexpected
magnitude of the industry softening in
the second quarter.”
Managing supply, further reducing
costs, and continuing pursuit of their
previously announced 10-year
strategies, not least the training of 2
million new riders and introduction of
100 new models, are the three pillars
of recovery that the Harley ranch is bet
on at this time – with much now
hinging on market reaction to the new
2018 model year introductions.
CFO John Ollin and CEO Matt Levatich
both acknowledged that “our biggest
opportunities for growth is outside the
United States,” and both have
reaffirmed their stated objective of
seeing at least 50 percent of sales
being made internationally within 10
years, and the recently announced plan
to build an assembly plant in Thailand
to service the ASEAN region – believed
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