Harley-Davidson says it has gained market share in 2016 in the United States as domestic motorcycle sales have continued to soften. For the full year 2016, worldwide Harley-Davidson retail motorcycle sales were down -1.6 percent compared to 2015; U.S. retail sales decreased -3.9 percent, partially offset by international growth of 2.3 percent.
However, CFO and Sr. VP John Olin has warned investors that Harley doesn’t expect 2017 unit sales to be anything better than “flat to modestly soft”, and that the first quarter of 2017 could be down between -15 percent to -20 percent in terms of new unit shipments to dealers worldwide as the company continues to try and help unwind an over-inventory situation that saw Harley “exit quarters 3 and 4 of 2016 with historically high levels of carry-over products”.
Harley says that this resulted in MY 2017 availability needing to be lower than “the year prior” and that they are making sure that it continues to be lower this first quarter “as we continue to constrain MY 2017 shipments”.
That decline saw Harley domestic retail sales at -3.9 percent for 2016 at 161,700 units compared to 168,200 in 2015, but with 4th quarter retail sales essentially flat versus the final quarter of 2016 (actually +0.1 percent) at 26,100 units.
In the midst of the reduced sales, Harley’s market share in the 601cc+ sector in which it competes actually grew by +1 percent in 2016 as a whole to a 51.2 percent market share and by +2 percent in the final quarter to 53.4 percent.
‘in the business of building new riders’
The success and impact on the balance sheet of the new models and initiatives launched under Levatich’s leadership so far is what is driving Harley’s stated aim of launching “50 new motorcycles over the next five years – demonstrating the power and strength of our products and changing the way people view Harley-Davidson”.
Levatich said that “it is our product development excellence that has been driving us in the right direction, and impressive though the new products of the past four years have been, you haven’t seen anything yet”.
In what maybe tacit acknowledgement that Harley maybe has been slow to ‘do a BMW’, Levatich has confirmed that this new model blitz will see Harley-Davidson embracing “new segments” relative to the traditional interpretation of what the Harley brand has meant. In response to any specific opportunities the cancellation of Victory may represent, Levatich actually went deeper by indicating that it is his belief that Harley should be able to “compete for every available customer”.
While Harley’s domestic fortunes continue to have issues, internationally Levatich said that they had “grown sales in every international market except Brazil, India and Indonesia”.
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| Matt Levatich: “It is our product development excellence that has been driving us in the right direction, and impressive though the new products of the past four years have been, you haven’t seen anything yet” |
Harley’s market share has now hit a record 10.8 percent in Europe (in a highly competitive but nonetheless growing market), up 0.3 percentage points over 2015. Their overall international retail motorcycle sales were down a tad (-1.9 percent) in the 4th quarter, but overall were +2.3 percent for the year, with EMEA leading the growth at +2.6 percent in Q4 and +5.9 percent in 2016; Canada was +5.5 percent in 2016, Asia Pacific +2 percent, but Latin America -13.2 percent thanks in large part to the economic issues in Brazil.
Worldwide retail sales of Harley-Davidson motorcycles were -0.5 percent in the fourth quarter at 46,610 units, 20,533 of which were international, and -1.6 percent at 260,289 units for 2016 in total, 98,631 units of which were international (+2.3 percent).
For 2017, Harley-Davidson anticipates full-year motorcycle shipments to be flat to down modestly in comparison to 2016. In the first quarter of 2017, Harley-Davidson expects to ship approximately 66,000 to 71,000 motorcycles.
