Everyone knew that the coronavirus outbreak was going to be hard on sales for the motorcycle industry, but no one was certain on how big of an impact the global lockdown would be…until now.
The first shoe to drop, Harley-Davidson has released its first quarter report for 2020, and the numbers are not good.
The report shows that Harley-Davidson motorcycle unit sales in the USA are down 15.5% (22,732 units sold) compared to this time last year, with international sales taking an even bigger hit, to the tune of a 20.7% drop (16,707 units sold).
This means a total unit sales decline of 17.7% for Harley-Davidson worldwide, with 40,439 units sold around the world in the first three months of 2020, down from the 49,151 units sold last year during the same time period.
The kick though, Harley-Davidson says that its US numbers were actually showing a 6% increase on unit sales before the coronavirus pandemic hit, but now the company sees its marketshare in the 601+cc categories dropping 2.2% to 48.9%.
In real world dollars and cents, the math doesn’t get any better for the Bar & Shield brand, with Q1 revenue down 8% and Q1 operating income down 22% compared to last year.
“Throughout this global crisis, we prioritize the well-being of our employees and the Harley-Davidson community in every decision we make,” said Jochen Zeitz, acting president and CEO of Harley-Davidson. “Our brand is rooted in community, and we care deeply for all of those who have been personally affected.”
“We also honor the heroes working tirelessly to bring care, relief and an end to this terrible pandemic. Finally, in the face of significant uncertainty, we have taken swift action to protect the company by bolstering our already strong balance sheet and liquidity position.”
Although Harley-Davidson has been on a downward trajectory lately, one cannot deny that the recent coronavirus outbreak has pushed the American motorcycle maker into deeper waters.
Searching for new leadership, as well as a new business plan, Harley-Davidson now has the added burden of navigating a time with historic effects on the world economy.
And while Harley-Davidson’s management team recognizes this fact, their path forward has still not been made clear.
“COVID-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality. The crisis has provided an opportunity to reevaluate every aspect of our business and strategic plan,” said Zeitz.
“We have determined that we need to make significant changes to the company; to our priorities, to our operating model and to our strategy to drive more consistent performance as we emerge from this crisis.”
“We will reduce complexity, sharpen focus and increase the speed of decision-making. These efforts will pave the way for a new strategic plan that incorporates some key products and initiatives from the current plan but focuses on improved profitability and long-term growth.”
“As a result, we will emerge as a stronger and more efficient company and reignite the Harley-Davidson soul,” he concluded.