Sales of Harley-Davidson motorcycles fell in the second quarter, with worldwide retail sales falling 6.7 per cent. Harley-Davidson sales in the US alone fell 9.3 per cent, while international sales decreased 2.3 per cent. Worldwide, Harley-Davidson sold 81,388 motorcycles in the second quarter, compared to 87,266 motorcycles sold in the same period a year ago. In the first six months of 2017 too, Harley-Davidson's global sales have slipped 5.7 per cent, from 1,44,724 motorcycles in the same period a year ago, to 1,36,437 motorcycles in the first six months of 2017.
New motorcycle sales in the US were down primarily due to weak industry conditions. Shares of Harley-Davidson fell by 10 per cent at the New York Stock Exchange after the company reported lagging retail sales as demand weakens among its baby-boomer customers and fewer millennials take to motorcycling. But the company is optimistic about the future with a string of new models planned for 2018.
"Our long-term strategy, focussed on building the next generation of Harley-Davidson riders is our true north. Our new product investment is one pillar of our long-term strategy to build riders globally and we are energized by the strength of our model year 2018 motorcycles coming later this summer," said Matt Levatich, President and CEO, Harley-Davidson.
2017 Harley-Davidson Road Glide Special
The iconic American motorcycle manufacturer said it would need to cut production in the second half of 2017, resulting even in workforce reductions in some of its plants in the US. While demand for new motorcycles has fallen, Harley-Davidson is also hit from used motorcycles being sold off by aging customers.
"Plenty of millennials ride motorcycles," said Levatich. "A lot of the data that is easy to get is new motorcycle sales, but if you look at the used market place, there are plenty of millennials that are riding, and it's up to us to inspire even more them to ride and engage with Harley-Davidson's products and experiences and the strategy that we had laid out."
Harley-Davidson is lowering full-year shipment, and now expects to ship 2,41,000 to 2,46,000 motorcycles to dealers worldwide in 2017, which is down approximately 6 per cent to 8 per cent from the numbers in 2016. That's a lot of less motorcycles from the nearly 3,50,000 motorcycles the company shipped about a decade ago. In the third quarter, the company expects to ship 39,000 to 44,000 motorcycles, which is down approximately 10 per cent to 20 per cent from 2016. Harley-Davidson said the company is strategizing how to better balance sales of new and used motorcycles as the industry tries to attract new and younger riders.
Harley-Davidson said its share in the US big-bike market fell to 48.5 per cent from 49.5 per cent a year earlier. The company now expects 2017 operating margin to be down about 1 percentage point. Net income fell 7.7 per cent to $258.9 million, while revenue from motorcycles and related products fell about 5.6 per cent to $1.58 billion.
