Hitting the brakes and reversing course!
It’s not all bad news, as far Harley-Davidson’s 2019 Q3 fortunes are concerned. Although sales
in the US and Europe continue to decline for the historic American
manufacturer, other international sales are slowly beginning to
rebound.
The world’s biggest motorcycle markets are currently located in
Asia—and it’s there that Harley is beginning to see some positive
numbers. Markets across Asia vary, but one commonality is that
smaller-displacement bikes rule. Harley saw sales rise 8.7 percent
across Asia for Q3, with an overall rise of around 1.6 percent for the
year overall, according to Reuters.
Analysts
had predicted that adjusted earnings would only average about 67 cents
per share for Q3, but the Motor Company instead managed an average of 70
cents per share, exceeding expectations. Bloomberg
also reported that although Harley’s US sales continue to decline, a
3.6 percent drop for Q3 is the lowest decline seen since Q4 of 2016.
Likewise,
Harley managed to slow the steep sales decline seen in Europe, which
reached the double digits of a 12.5 percent decline in Q2 of 2019. For
Q3, the decline was a modest 0.6 percent—a significant improvement for
the troubled moto manufacturer.
The storied company
isn’t out of the woods yet, but every rider knows you have to brake
before you pull a U-turn, or you’ll crash. Manufacturing the smaller
bikes that Asian markets want is a good start. Hopefully, the company
can continue to diversify its lineup elsewhere in the world to attract
the new blood it—and all motorcycle manufacturers—need in order to both
survive and thrive.
After hitting a nearly nine-year
low on August 27, Harley shares rose 5.2 percent as the markets absorbed
the cautiously optimistic Q3 earnings report. Currently, Harley is
executing plans to obtain half of its total revenue from international
sales by the year 2027.
As of right now, the company
is targeting shipments of between 212,000 and 217,000 bikes worldwide
for 2019. Global trade tensions have impacted Harley, but after a delay
in obtaining regulatory approval from the EU, Harley plans to ship bikes
to the region from Thailand instead of the US. However, any positive
impact on company numbers won’t be seen until at least Q2 of 2020 due to
those delays.
