American Motorcycle Dealer AMD 248 March 2020 | Page 64

The 'King
Harley 2019 - "Full-Year Retail
of Custom' Sales Decline Lowest Since 2016"
Celebrated
as the 'King
of Verona'
Kudos to Paola Somma and
Francesco Agnoletto and their
team - organizers of Motor Bike
Expo in Verona, Italy, every
January.
There have been hundreds of
acres and millions of words of
tribute published about Arlen
Ness since his passing in 2019 -
but how about this for a touch
of class?
Arlen and Cory Ness and their
family have always been firmly
in the "Friends of Verona" club,
always been appreciated by the
crowds there - enthusiasts and
fellow professionals.
As a statement of appreciation
by everyone involved with
'Verona' this year, it would have
been hard to top this - nice!
www.arlenness.com
64
In addressing investors and
financial analysts at the end of
January 2020, the prevailing
message coming from Harley-
Davidson former CEO Matt
Levatich and CFO John Olin in
reaction to another woeful year
in 2019 appears to have been
along the lines that at least the
rate of decline is declining.
Pointing to some signs for optimism, in
the fourth quarter of 2019, with
domestic U.S. retail market share being
up against a down market by +1.0%
(despite H-D retail sales being off by -
5.2% at 125,960 motorcycles in
2019), the first cracks have started to
appear in the customarily good
natured and supportive responses
Levatich and Olin receive when
fronting up to analysts in the
company's announcement Q&A
webcast and phone-in.
Notably, and in a possible sign of
struggles to come, Morgan Stanley
questioned how Harley can explain
why its sales can have been so soft for
so long in a strong and growing
economy and whether it will look
favorably at any offers to buy the
business if one [or more] materializes a
year from now.
While the interjection lacked
consideration of market context, it, and
other less direct challenges,
nonetheless suggest that it won't be
long before the sharks start circling
closer as the scent of blood
propagates.
"Tempered worldwide year-over-year
retail sales rate of decline" was the
form of words used by Harley in the
announcement press release text; "in
line with our expectations" and
"indicative of increased business
stability" was how Matt Levatich is said
to have characterized Harley's Q4
AMERICAN MOTORCYCLE DEALER - MARCH 2020
performance.
Maybe anticipating that 'More Roads'
will run out of road a year from now if
there hasn't been demonstrable
progress, Levatich date-stamped when
the first financial results of the much
vaunted strategic plan will be seen
when quoted as saying that "in 2019,
we took important steps toward
returning to significant growth in 2021
Q4 international retail
sales up slightly
– including launching LiveWire, our
first electric motorcycle, optimizing our
global dealer network and expanding
our international footprint."
Going further, Harley's press release
stated that in advancing its 'More
Roads' plan further, in 2019 the
company was now on track for
"significant" 2021 growth, pointing to
"increased focus on rider
commitment" in the U.S. where
"527,000 riders joined in 2019, up
year-over-year" and completion of
"steps to mitigate the majority of
recent EU and China tariff impacts in
2020," completion of "key milestones
of the manufacturing optimization
initiative" and "exceeding expected
full-year savings."
As the company continues to add to its
cruiser and touring offer with a series
of mid-cycle new models and to its P&A
revenue opportunity with a new crate
motor, the focus, for now, remains on
"Strategy to build riders" and the
"Accelerated plan for growth."
"Harley-Davidson's strategy to build
the next generation of Harley-Davidson
riders globally is supported by these
strategic objectives from 2017 through
2027: expand to four million total
Harley-Davidson riders in the U.S.,
grow international business to 50
percent of annual Harley-Davidson
Motor Company (HDMC) revenue,
launch 100 new high impact
motorcycles, deliver superior return on
invested capital for HDMC (S&P 500
top 25%) and grow its business
without growing its environmental
impact.
The company says that it "continued to
advance its More Roads plan
initiatives" by asserting its "leadership
in the electrification of motorcycles
with the launch of LiveWire, the
company's first electric motorcycle, and
IRONe, an electric-powered two-
wheeler for kids."
Launching "new high impact models"
and delivering "significant technology
to its class-leading model year 2020
motorcycles to inspire new and existing
riders", commissioning its Thailand
manufacturing facility and establishing
a China distribution center -
"increasing customer access with more
competitive prices" and unveiling
"improved and expanded global
ecommerce and digital capabilities"
while advancing "good-to-great
dealers – meeting customer experience
and sales conversion targets."
More riders joined Harley-Davidson in
the U.S. in 2019 compared to 2018,
with the total pool of Harley-Davidson
riders in the U.S. growing to 3.1 million
in 2019. "We see 2020 as the pivotal
year in the transformation of Harley-
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