American Motorcycle Dealer AMD 241 August 2019 | Page 8

<<< Continued from cover
China's Qianjiang Motorcycle
Company Limited [manufacturer of
Benelli branded motorcycles and a
subsidiary of Volvo owner Geely] to
launch a smaller, more accessible
Harley-Davidson motorcycle planned
for China in 2020, with additional
Asian markets to follow. This move is
intended to expand access to the
Harley-Davidson brand to more riders in
Asia. During the second quarter, the
company's efforts to increase access in
emerging Asian markets, including
through its Thailand manufacturing
strategy, drove sales increases of +77%
in its ASEAN (Association of Southeast
Asian Nations) markets.
Harley-Davidson retail sales in China
grew +27 percent in 2018 compared to
2017. The new motorcycle will be
designed by Harley, but production,
including the engine, will be at a
Qianjiang facility in China. Despite the
trend to larger engines in China, the
125 cc up to 400 cc displacement
market sector that Harley's 338 cc
model will sell into in China is said to
be worth some 2m plus units a year.
"There are more riders on Harleys in the
U.S. than at any point in our history, and
the number of young riders continues
to grow. The strength of the Harley-
Davidson brand, and the bare knuckle
grit of this company and our global
dealers, will continue to be leveraged
and sharpened to make riding matter to
more people," said Levatich.
Starting in the first quarter of 2018, the
company began work to close its wheel
manufacturing facility in Australia and
consolidate its motorcycle assembly
plant in Kansas City, Mo. into its plant
in York, Pa.
Full year savings of $25m to $30m for
2019 and ongoing annual cash savings
of $65m to $75m after 2020 are still
expected. In the second quarter 2019,
costs related to the manufacturing
optimization were $14.4m. For the full
year, the company now expects to
incur $40m to $50m of operating
expense for this initiative, $10m less
than previously expected.
Revenue from the Motorcycles
segment was down in the second
quarter behind lower shipments.
Operating income decreased primarily
due to lower revenues and increased
tariff costs, partially offset by lower
SG&A costs. Financial Services segment
second quarter operating income of
$75.5m was down -6.2%.
Harley-Davidson sales revenue and production data… 2nd quarter 2019
Income statements in
$1,000s (except share)
Net sales revenue
Gross profit
Total operating income
Net income
Diluted earnings
per common share
THREE MONTHS ENDED
SIX MONTHS ENDED
2019 Q2 2018 Q2 2019 Q2 2018 Q2
$1,434,004
$454,738
$256,257
$195,631 $1,525,121
$532,085
$323,947
$242,338 $2,629,641
$802,177
$423,369
$323,576 $2,889,068
$1,005,858
$560,364
$417,101
$1.23 $1.45 $2.03 $2.48
NET SALES REVENUE
H-D Motorcycles
$1,128,063
$1,201,453
$2,092,638
$2,323,126
Parts & Accessories
$221,258
$231,014
$380,961
$400,089
General Merchandise
$64,644
$68,653
$120,045
$125,254
Other
$10,128
$13,594
$17,509
$21,834
MOTORCYCLE SHIPMENT DATA NOTE: H-D MOTORCYLE SHIPMENT DATA IS NOT THE SAME AS RETAIL REGISTRATIONS
United States
41,404
43,047
75,909
81,844
Exports
27,353
29,546
51,739
54,693
Total
68,757
72,593
127,648
136,537
PRODUCT MIX
Touring
Cruiser
Sportster/Street
RETAIL SALES OF H-D MOTORCYCLES:
United States
Canada
EMEA Region
Asia Pacific Region
Latin America Region
Total
2019 Q2 2018 Q2
30,923
22,691
15,143 31,064
24,348
17,181
2019 Q2 2018 Q2
42,762
3,279
15,619
7,670
2,516
71,846 46,490
3,807
17,844
7,718
2,569
78,428
2019 Q2
55,966
43,142
28,540
2019 Q2
70,853
5,227
26,416
13,744
4,757
120,997
2018 Q2
61,921
45,902
28,714
2018 Q2
75,799
5,887
28,706
14,047
5,075
129,514