Harley-Davidson Cuts Motorcycle Shipment Forecast For 2019

Overall Harley-Davidson sales are still under pressure, and the American motorcycle brand now expects to ship fewer motorcycles worldwide in 2019. Harley-Davidson has though reported strong sales in China and other Asian markets.

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Harley-Davidson sales are under pressure, both in the US and in global markets

Highlights

  • Harley-Davidson reports 20 per cent fall in second quarter revenue
  • Overall sales of motorcycles, parts and merchandise down 6 per cent
  • Southeast Asia sales look promising, but overall sales under pressure

Harley-Davidson has cut its forecasts for motorcycle shipments in 2019 and reported weaker sales and profit in the second quarter. The American motorcycle brand now expects to ship between 2,12,000 and 2,17,000 bikes this year, down from a previous forecast of 2,17,000 to 2,22,000 motorcycles in April 2019. The latest forecast is considerably lower than its 2019 forecast given a year ago, when the Milwaukee-headquartered motorcycle brand said it expected to ship between 2,31,000 to 2,36,000 bikes in 2019.

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Harley-Davidson has been facing challenges in sales both in its US home market and in global markets

Harley-Davidson

Harley-Davidson Bikes

Harley-Davidson has been plagued by higher tariffs to Europe and declining interest in its home market, the United States, with sales continuing to struggle. The only good news seems to be coming from Asia, where Harley has reported stronger sales in China and other Asian markets. However, that doesn't mean that more Harley-Davidson bikes are being lapped up by customers around the world. The American motorcycle brand has struggled in recent years with declining sales both in the home market and abroad.

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According to the company's second quarter earnings report, Harley-Davidson's bike deliveries are down 5.3 per cent from a year ago, and in Asia and the Pacific region too, Harley-Davidson has seen motorcycle retail sales drop by 4,165 units from 2016 to 2018. India, where Harley-Davidson is still the largest premium motorcycle brand by volume, sales fell 21.6 per cent from 3,690 units in 2016 to 2,676 units sold in the first quarter of 2019.

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Harley-Davidson has been trying to offset some of the European tariffs on US-made motorcycles by shifting some of the company's manufacturing to Thailand. The idea is to avoid some tariffs, and also to build motorcycles closer to European and Asian markets where there is still some interest in the motorcycle brand than from its traditionally American customers. And the strategy seems to have paid off, at least, to some extent, in Southeast Asia, where Harley-Davidson said sales grew 77 per cent during the quarter.

Nevertheless, the pressure on sales seems to have reflected in the quarter results, when Harley-Davidson has reported $ 195.63 million in net revenue, a drop of nearly 20 per cent over the $ 242.34 million revenue reported a year ago. Overall sales of motorcycles, parts and merchandise fell nearly 6 per cent to $ 1.43 billion during the second quarter from $ 1.53 billion during the same period in 2018.

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Harley-Davidson has recently unveiled the full specifications and details of its first production-ready electric motorcycle, the Harley-Davidson LiveWire, which is expected to be available commercially by the end of 2019, or latest by early 2020. More than just an electric motorcycle, Harley-Davidson is also working on developing a range of new internal combustion engine models in different segments to attract new riders. And attracting new riders to the Harley-Davidson brand is crucial for the future of the American motorcycle brand, which is outlined in the company's "More roads to Harley-Davidson" initiative to create new riders around the world. The focus on emerging Asian markets may be a good starting point to meet those ends, but eventually it will also depend on the strength of Harley-Davidson's products to attract a whole new generation of future riders.

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