‘ share price has fallen 23 percent since March 2016 ’
Indeed , following the release of its own 4Q and FY 2017 fiscals , Polaris CEO Scott Wine responded to investor suggestions that Polaris was perhaps falling behind the curve in E-bike terms , after having been well ahead of Harley . Wine said that , for them , it wasn ’ t so much a technology issue but one of ROI – suggesting that it was difficult , at this stage , to see a pathway to profits in the sector in the short to medium term . In the fourth quarter , Harley-Davidson worldwide retail motorcycle sales declined -9.6 percent compared to the prior year . Harley-Davidson domestic U . S . retail motorcycle sales were down -11.1 percent in a market that was down by around half that at -6.5 percent compared to the year-ago quarter . Fourth quarter market share was down on 3Q 2017 and 4Q 2016 share at -50.8 percent in the 601 + cc segment . The commitment to investing in product development was apparent again in February with the announcement of two additional new 1200cc Sportsters . The new models look excellent , but some observers were immediately questioning the extent to which they really marked a “ redefinition of its
product in traditional spaces ” and represented an expansion “ into new spaces ” of the kind that could excite new customers . If we are counting correctly , that takes their 100 in 10 years “ high impact new model ” blitz to 16 now ? The Forty-Eight Special and Iron 1200 Sportsters are said to “ fuse throw-back design with modern performance ” and “ garagebuilt attitude .” The company says that the new designs “ began with inspiration from our customers – reflecting what is happening in customization on the streets . Each motorcycle features a powerful 1200cc engine and brings back a sense of 70s soul that only H-D can bring . “ Since its introduction in 1957 , Sportster motorcycles have been repeatedly reimagined in the hands of both the Motor Company and bike owners : the Sportster as a bobber , a chopper , a scrambler and a cafe racer ; as a hero on flat tracks and drag strips and road-race courses ; as an accessible entry-point for first-time riders ; and as a custom-of-one cruiser . “ Since its inception , the Sportster has offered the perfect combination of size , power and character that makes it appealing to so many different riders ,” said Brad Richards , Harley-Davidson V . P . of Styling & Design . “ A Sportster is a relatively easy bike to strip down and reinvent . What we ’ ve done to create the new Iron 1200 and Forty-Eight Special is what Sportster owners have been doing with their own bikes for generations .” Described as an “ Urban Brawler ,” the Iron 1200 has a satin-black Mini Ape handlebar that Harley says is “ an essential element of the garage-built chopper look that adds instant attitude and gives the rider a fists-in-the-wind posture . The gloss black speed screen framing the headlamp amplifies the attitude of the tall bars and is intended to offer some wind deflection at speed and provides a space for easy personalization . “ The fast-back Cafe solo seat flows to the rear fender and is shaped to help hold the rider in position when the torque of the Evolution 1200 kicks in . Finished with all-black 9-spoke wheels and a solid black belt guard and rear sprocket , the Harley-Davidson Smart Security System and anti-lock braking system ( ABS ) are factory-installed options for the Iron 1200 model . Meanwhile , the “ burly front end of the Forty-Eight Special – a wide front tire framed by fat forks – looks especially
" The EV motorcycle market is in its infancy "
menacing when topped with a glossblack Tallboy handlebar . “ We specifically selected the Tallboy bar for its shape ,” said Richards . “ It offers less pull-back than the Mini Ape , a look that really works with the steamroller front end and the smaller fuel tank on the Forty-Eight Special model .” Harley says that “ the 2.2-gallon “ peanut ” Sportster fuel tank features rows of bold , horizontal stripes framing a simple Harley-Davidson text logo . The Evolution 1200 engine features a black top end over an expanse of brilliant chrome covers , plus chrome muffler and exhaust shields . Chrome lower rocker boxes , pushrod tubes and tappet covers contrast with the black cylinders to highlight the V-Twin engine shape . “ High-performance Michelin Scorcher 31 tires front and rear are mounted on black split 9-spoke cast aluminum wheels . The Harley-Davidson Smart Security System and anti-lock braking system ( ABS ) are factory-installed options for the Forty-Eight Special model .”
“ Only 35 percent of the riders trained bought a bike ”
In a February interview with the Reuters Financial News Agency , Harley CEO Matt Levatich called on investors to be “ patient ” with his strategy to turn around the slump in demand for new model sales and denied that the company was exploring a merger with a rival or a private equity buyout “ as some investors have speculated ,” according to Reuters . Describing the “ the ridership program ” as one that would “ transform the motorcycle-maker into a customer-creator ” but admitted that “ he does not have an answer when it will return Harley to sales growth in the United States ” saying that “ mindset shifts are not something that happen overnight … but that ’ s very much core to the 10- year strategy for the company .” “ The moment , however , we feel that the ownership structure of the company ... is starting to dictate our strategy , that ’ s the moment to consider whether that
‘ share price has fallen 23 percent since March 2016 ’
ownership model is the right model ,” he said . “ So , it is not the case . We are very clear in our strategy .” While the piece published by Reuters doesn ’ t go as far as the January Motley Fool article that suggested that some investors may be eyeing a change of board and senior leadership , it does point to the 23 percent fall in Harley ’ s stock price since March last year , and in response to Levatich pointing to the 32,000 new riders that went through Harley ’ s training program , the author did make the point that “ more riders , however , do not necessarily mean higher sales ” and pointed to one Illinois based dealer as commenting that “ only 35 percent to 40 percent of the riders trained at his dealership last year bought a new or preowned bike .” The Reuters piece was no less positive about Levatich ’ s E-bikes in 18 months announcement ,
Matt Levatich , Harley CEO - “ We are not going to discount to increase our market share .”
with Levatich conceding that “ there are some practical problems with EV that still most auto companies are also struggling with . It is very expensive .” Reuters conceded that “ Harley is still the dominant player in the heavyweight motorcycle market in the United States ,” but went on to say that “ its market share has steadily fallen to 50.8 percent from 58 percent in 2013 ,” while accepting that “ Harley ’ s challenges are in part related to demographic shifts bigger than its strategy or products . “ Overall , new motorcycles retail sales in the United States have more than halved since 2006 as younger people shun big motorcycles , according to the Motorcycle Industry Council . “ Harley has also stuck to a strategy of protecting profit margins and limiting discount offers , even as rivals such as Polaris Industries Inc ( PII . N ) are undercutting Harley prices to move bikes out of their showrooms . “ Polaris enjoyed a 30 percent on year jump in North American retail sales in the last quarter , whereas Harley ’ s sales dived 10 percent .” Levatich is quoted as attributing the divergent performance to “ math ” saying that “ growth percentages of a small base are easy to achieve . When you have a high base like ours , a little bit of decline shows up very quickly . “ We are not going to discount to increase our market share .” The piece was written by Rajesh Kumar Singh and published by Reuters on February 13 .
8 AMERICAN MOTORCYCLE DEALER - MARCH 2018 www . AMDchampionship . com