American Motorcycle Dealer AMD 203 June 2016 | Page 6

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withstanding ?), is that in an evolving Victory motorcycles offer , Polaris are poised to keep Harley under pressure in Milwaukee ’ s core market while having the field to itself in terms of the “ new opportunities ” that the market offers . While comparison between the share prices is meaningless without reference to margins , profits , turnover and market capitalization , out of fairness to Harley it is though relevant to point to the trading “ headwinds ” ( most notably foreign exchange rates ) and Polaris ’ specific issues ( juvenile dealer network , paint shop and other production issues ) that Polaris CEO Scott Wine has himself acknowledged in the past 12 months , and the fact that Harley is not the only domestic US powersports industry “ major ” to have share price woes at this time . Indeed , referencing Polaris as “ the other ” domestic US powersports “ major ” also goes to a much underestimated Achilles Heel that , in competitive terms , that may bite Harley in the coming years – namely their tendency to hubris . In a recent Bloomberg interview Matt Levatich was fairly dismissive , by inference , about the threat to their dominant in-class market share that Polaris ( and other manufacturers ) pose in the domestic US market . Inappropriately so if Harley ’ s recent market share performance is seen in the

context of the wider motorcycle industry . A deeper analysis of Harley ’ s own retail sales figures shows that despite dramatically declining sales , their domestic US 601 + cc market share bucked the trend of the downturn and rose steadily from 2008 to 2013 when it peaked at 54.9 percent . However , having held broadly stable for 2014 , it dropped back to below their 2010 market share performance for 2015 at 51.2 percent , and to judge by their 2016 Q1 data , is still headed further south . In Europe the company did the same , bucking the downturn , climbing from an 8.9 percent market share there in

2008 and peaking at 12.8 percent in 2013 ; in the last two years sales in Europe have increased , in unit terms , but market share is down ( 12.0 percent in 2014 and 12.3 percent in 2015 ), also indicating that they are losing ground relative to the market – a market that Indian Motorcycle , in particular , are now a fast growing part of , and you can be pretty certain that their sales are not coming at the expense of large displacement sports and hyper-sports models ! In 2008 , some 69.78 percent of Harley ’ s retail sales were domestic , with 30.22 percent international ( including Canada ), of which 14.36 percent were to customers in Europe . Broadly speaking , Harley ’ s international sales percentage has grown steadily most years since then , peaking at 36.42 percent of retail sales being to international customers in 2015 ( domestic down correspondingly to 63.58 percent ) with 16.36 percent European ( where sales as a percentage of global retail peaked at 18.85 percent in 2011 ). From a low of 278,900 sales of units of 601 + cc in 2010 , domestic US registrations have increased to 328,800 in 2015 - a growth of just over 18 percent at a time when Harley ’ s market share of those has stood still ( actually down by -0.3 percent in those five years ). In Europe the decline in the market lasted longer than was the case in the USA with sales of 601 + cc machines bottoming out at 281,800 units in 2013 . However , in the just two years since then , the market has rebounded by over 24 percent while Harley , albeit on increased sales , has actually also lost ground relative to the market by 0.5 percent market share points .

Such is the foundation of said hubris . While returning sufficient value to shareholders to keep the raiders from the door is a laudable and essential priority ( assuming that appropriate third party ownership is discounted as being desirable under all or any circumstances – something that is now a lot less clear cut than it once was ), and marketing the crap out of the product they have got while also seeking new customers - whether in demographic terms , which they continue to do very well with , or in terms of the one-third of buyers who are new to riding at all - is also to be applauded , wearing blinkers where what is happening in the sectors of the market for which they don ’ t have product is going to be what catches them out eventually . Harley are right to be looking for new customers so assiduously , but as I said last month – there will come a point where that will require new metal , not just old promises , and the alarming truth behind their market share trend and what is likely to be happening this season too , is that they need that new metal straight away or else the apparent comfort of the market share gap between Harley and its nearest competitor will start closing very quickly indeed as those customers that could have been showroom traffic for Harley dealers will be being seduced by more contemporary platforms and the fast growing choice where “ dark legends ” are concerned too .

Robin Bradley Co-owner / Editor-in-Chief robin @ dealer-world . com

6 AMERICAN MOTORCYCLE DEALER - JUNE 2016 www . AMDchampionship . com