American Motorcycle Dealer AMD 232 November 2018 | Page 64

Harley Q3 International +2.6%;
BRIEFS Domestic -13.3% in a -9.8%
Market for a 50.9% Share
NEWS
BMW unveiled its first
autonomous motorcycle
technology demonstrator at its
Miramas testing ground Techday
in southern France. Developed by
a team led by graduate engineer
Stefan Hans, a R 1200 GS was
shown to be able to
independently drive off,
accelerate, circle a winding test
track and independently slow
down safely to a stop.
BMW continues to run the Harley
playbook - its new “Rent A Ride”
program is a dealership based short-
term rental service that operates via a
website with smartphone capability,
enabling customers to select the
model of their choice and check
availability at all participating Rent A
Ride partner dealerships in real time.
Fiat Chrysler has confirmed
reports that it is offloading its
high-tech parts division Magneti
Marelli. Japanese car parts
maker Calsonic Kansei, owned by
private equity giant KKR, will
buy the unit for $7.1bn, creating
the world's seventh largest
independent components
supplier. Last year KKR was
reported to be one of the
bidders offering to buy Ducati
from Volkswagen Audi.
The Custom motorcycle market in
Germany (“Choppers” - as defined by
the German motorcycle industry trade
association) was worth 10.66 percent
of the total 92,402 unit motorcycle
market for the first eight months of
2018 at 9,849 units; a +21.29
percent increase for the sector over
the same period in 2017. The data
includes Harley, Indian and other large
and low volume manufacturer models,
as well as one-off build registrations.
64
arley-Davidson has
announced its Q3
financial results, and
while it is reporting
that international retail
motorcycle sales were up +2.6
percent compared to 2017,
retail sales in the United States
were down -13.3 percent,
putting worldwide retail sales
down overall at -7.8 percent.
The domestic U.S. 601+ cc industry
was down -9.8 percent in the third
quarter compared to 2017. Harley-
Davidson’s third quarter U.S. market
share was 50.9 percent, while Harley-
Davidson’s European market share
was up +0.8 of a percentage point to
10.4 percent through September.
Third quarter revenue from the
Motorcycles and Related Products
segment (Motorcycles segment) was
up versus the prior year. Operating
margin as a percentage of revenue
increased in the quarter compared to
2017 due to higher gross margin and
lower SG&A as a percent of revenue.
“Third quarter progress tracked to our
plans with numerous highlights
including another quarter of improved
international retail sales growth and
increased year-over-year earnings per
share. We unveiled our More Roads to
Harley-Davidson accelerated plan for
growth, and made strong progress
already through September,” said
Matt Levatich, President and Chief
Executive Officer, Harley-Davidson,
Inc.
“As we manage our business with
resilience in a challenging time in our
history, we are leveraging our
strengths for a more promising road
ahead. We are investing to build the
next generation of Harley-Davidson
H
AMERICAN MOTORCYCLE DEALER - NOVEMBER 2018
Harley CEO & President Matt
Levatich: “As we manage our
business with resilience in a
challenging time in our history, we
are leveraging our strengths for a
more promising road ahead”
riders and we are optimizing our
business to drive profitability and cash
flow. Through September, cash flow
was very strong, and revenue was up
over +3 percent despite lower
motorcycle shipments.”
On a discretionary basis, Harley-
Davidson repurchased 1.9 million
shares of its common stock during the
third quarter for $84.5 million. During
the quarter, there were approximately
166.7 million weighted-average
diluted common shares outstanding.
At the end of the quarter, 21.3 million
shares remained on board-approved
share repurchase authorizations.
During the quarter, Harley-Davidson
says “we have made progress on the
initiatives included in our More Roads
to Harley-Davidson accelerated plan
for growth to build the next generation
of riders globally. Leveraging core
strengths in the business, brand and
dealer network, the company is
investing in opportunities that inspire
increased ridership sooner and deliver
sustainable growth for the future.”
Harley-Davidson’s More Roads plan
supports the company’s strategy and
2027 objectives to: build two million
new riders in the U.S., grow
international business to 50 percent of
annual volume, launch 100 new high
impact motorcycles and do so
profitably and sustainably.
Through 2022, the company’s More
Roads to Harley-Davidson plan is
slated to deliver new products to keep
current riders engaged and inspire a
new generation of Harley-Davidson
riders; broader access, meeting
customers “where they are and how
they want to engage with a multi-
channel retail experience” and
stronger dealers - driving a
performance framework to improve
dealer financial strength and the
Harley-Davidson customer experience
The company believes its accelerated
plan will drive revenue growth and
expand operating margins and
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