No doubt in an effort to distract attention from a disappointing 2018 full year and final quarter, one that saw the company undershoot its 4Q and original 2018 forecasts when reporting its 4Q and 2018 FY (January 29th, 2019), Harley-Davidson sought to focus on the limited positives, the value it says it is continuing to return to shareholders and the "milestones" it says it has already met in pursuit of its 'More Roads' strategy document.
In reality, the headline news was of worldwide retail sales of Harley-Davidson units down by -6.1% (228,051 units), the lowest since 2010 (the only year that has been lower since 2001), with 4Q at -6.7% (39,311 units).
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| Matt Levatich, CEO, Harley-Davidson Inc: "In 2018 we delivered value to our shareholders through improved earnings and cash from operations. The challenges we experienced during the year reinforced the commitment we have for our 'More Roads to Harley-Davidson' accelerated plan for growth" |
International retail sales were flat for the year at +0.4% (95,183 units) and have been essentially flat for five years, but with domestic 2018 retail sales down to 132,868 units (-10.2%), their lowest since 1998, international sales were 41.74% of the total (as Harley continues to pursue a 50/50 international/domestic sales split).
In other news, President and CEO Matt Levatich has now confirmed that, as widely trailed, production of models for Europe and selected other international markets (such as China and the ASEAN markets) will be based out of the new Thailand plant that came on stream in 3Q 2018 (capacity expansion is already underway there).
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| The Milwaukee headquartered company has confirmed that European inventory will be assembled in Thailand as they seek to avoid tariffs. Harley wants to see 50% of sales coming from "international markets" by the mid-2020s |
On a full-year basis, the U.S. 601+cc industry was down -8.7 percent and Harley-Davidson held market share of 49.7 percent. Harley-Davidson's full-year European market share was up 0.5 percentage points to 10.3 percent.
In its ongoing drive to further improve its manufacturing operations and cost structure, in the first quarter of 2018 the company commenced its multi-year manufacturing optimisation initiative anchored by the consolidation of its U.S. motorcycle assembly operations into its plant in York, Pa.
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| Harley will launch its 'LiveWire' electric motorcycle later in 2019 before entering other markets such as Streetfighter style bikes, the middleweight and lightweight markets, and the Adventure Touring segment with its 'Pan America' in 2022 |
During the quarter, Harley-Davidson says it continued to make progress on the initiatives included in its May 2018 'More Roads' "accelerated plan for growth". Among its strategic aims are to develop a stronger dealer network, to train 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.
