American Motorcycle Dealer AMD 236 March 2019

NOW IN OUR ™ 27 EA th R Y T H E L E A D I N G B U S I N E S S M A G A Z I N E F O R T H E I N T E R N AT I O N A L C U S T O M M O T O R C Y C L E A N D PA RT S I N D U S T RY 2018 Domestic US Harley Sales -10.2%, Lowest Since 1998 o doubt in an effort to distract attention from a disappointing 2018 full year, and an especially bad final quarter, one that saw the company undershoot its 4Q and original 2018 forecasts, Harley-Davidson sought to focus on the limited positives, the value it says it is continuing to return to shareholders and the “milestones” it says it has already met in pursuit of its ‘More Roads’ strategy document when reporting their 4Q and 2018 FY (January 29th, 2019). In reality, the headline news was of worldwide retail sales of Harley- Davidson units down by -6.1% (228,051 units), the lowest since 2010 (the only year that has been lower since 2001), with 4Q at -6.7% (39,311 units). International retail sales were flat for the year at +0.4% (95,183 units) and have been essentially flat for five years, but with domestic 2018 retail sales down to 132,868 units (-10.2%), their lowest since 1998, international sales were 41.74% of the total (as Harley N continues to pursue a 50/50 international/domestic sales split). In other news, President and CEO Matt Levatich has now confirmed that, as widely trailed, production of models for Europe and selected other international markets (such as China and the ASEAN markets) will be based out of the new Thailand plant that came on stream in 3Q 2018 (capacity expansion is already underway there). Levatich said that “in 2018 we we met our 'More Roads' milestones delivered value to our shareholders through improved earnings and cash from operations. The challenges we experienced during the year reinforced the commitment we have for our ‘More Roads to Harley-Davidson’ accelerated plan for growth. Our plan addresses the challenges of today and the opportunities we see for growth ahead, and we are energized by the momentum we are building. New and different people, riders and non-riders, are taking notice of Harley-Davidson and the thrill of riding.” On a full-year basis, the U.S. 601+cc industry was down -8.7 percent and Harley-Davidson held market share of 49.7 percent. Harley-Davidson’s full- year Europe market share was up +0.5 percentage points to 10.3 percent. Revenue from the Motorcycles segment was down in the fourth quarter, but up for the full year compared to 2017. Operating margin as a percent of revenue decreased in the quarter due to restructuring charges, incremental tariffs and higher recall costs. Motorcycles and Related Products segment (Motorcycles segment) revenue grew +1.1 percent compared to 2017. “During 2018 we met or exceeded all of the ‘More Roads’ plan milestones we set out to achieve. In the U.S., we finished the year with 52,000 more Harley-Davidson riders than one year ago. The groundwork for an exciting future is being built in real time, and that’s clear for riders today and Harley- Davidson riders of tomorrow. We are igniting a cultural movement for Continues on page 6 >>> Tim Dixon of Gas Axe Chop Shop fame scooped the $10,000 top prize and ‘King of the Builders’ title at the Chicago championship round of the J&P Cycles UBCBS competitions which had been staged at the seven rounds of the 2018-2019 IMS series MAR 2019 ISSUE #236 Hugh Charvat INTERVIEW TUCKER SHOW