Harley-Davidson on Tuesday announced yet another financial quarter of declining sales – continuing a trend that stretches back more than two years. However, there are signs that the company’s recent European focus is paying off, with sales in that market having jumped 6.8 percent when compared with the same time period last year.
US sales in the first quarter of 2018 plummeted 12 percent compared to 2017, which played a big part in the company’s overall worldwide sales decreasing 7.2 percent. It’s worth noting that overall US industry sales of motorcycles 600cc and greater were down more than 11 percent in the same quarter, meaning that despite the sales drop Harley continues to dominate the US market: controlling 50.4 percent of market share.
Still, unsurprisingly, Harley has responded to the results by stressing its long-term goal of growing international business to account for 50 percent of annual volume (at present that number’s just below 40 percent).
“Considering prolonged softness in the US industry and given what the company believes is untapped potential in international markets and in certain high-growth spaces globally, the company is crafting strategy accelerants to deliver significant value through 2022,” the company’s 2018 Q1 report states. “Harley-Davidson plans to leverage its core business more fully and expand in new directions to accelerate value creation as it pursues its long-term objectives.”
Interestingly, the report also states that the manufacturer that made Milwaukee famous “is currently refining its plans and this summer intends to reveal significant additional steps to improve performance and value creation.”
Could that mean the company will be overhauling its Sportster line-up? That’s something that was hinted at recently in a Cycle World interview with Harley-Davidson CEO Matt Levatich.
Addressing the challenge the company has faced in competing against itself in the used market (up until two years ago, a new Harley wasn’t all that different from a 10-year-old Harley), he pointed out that when it comes to the company’s touring and Softail line-ups “the new is way better than the used.” He then conceded this was not the case with the Sportster line-up.
“Our emphasis on new product is to put space between new and used,” he told Cycle World. “We haven’t done as much with the Sportster recently so it’s the last example of a platform that doesn’t have that space.”
If 2018’s first quarter results are anything to go by, the Sportster segment could definitely use revitalizing. For the first time that I can remember Harley’s financial report broke down sales by segment: touring, cruiser, and Sportster/Street. The touring segment actually saw a 6.15-percent increase in sales, whereas cruisers sales dropped 14.31 percent (perhaps as a result of riders taking their time to get over the loss of the Dyna line-up). The most precipitous drop, however, came in Sportster/Street sales – down 30.56 percent.
Harley recently unveiled the tantalizing Iron 1200 that I’d wanted for quite some time, but there’s no doubt that a full overhaul of the platform would make sense. Firstly, it’s a platform that better suits European tastes, secondly it is the platform more likely to help Harley-Davidson achieve its goal of creating new riders.
The company says it aims to build 2 million new riders in the United States by 2027. It also reaffirmed its “commitment to lead in the electrification of the sport of motorcycling to reach new customers in new spaces.”
You can read the full report on Harley-Davidson’s Investor Relations website.