Harley-Davidson continues to hemorrhage motorcycle unit sales in 2020, with the Bar & Shield brand reporting an 8% loss worldwide on its third-quarter numbers.
This Q3 result means that Harley-Davidson is down 18% for the first nine months of the year, compared to the same point in time as last year.
The news isn’t all bad however, as Harley-Davidson is also reporting that the net income for the third-quarter was up 39% for a total of $120 million – the company’s highest Q3 income since 2015.
Harley-Davidson attributes that rise in net income to the company’s new interim “Rewire” plan, which will lead to the company’s new five-year strategic vision, which is being dubbed the “Hardwire”.
However, it remains to be seen how lasting this net income turnaround can be sustained, especially as unit sales continue to bleed from the American motorcycle manufacturer.
Is this result the one-time advantage of some ledger book consolidation, or the first of a new trend? It should be pointed out that despite the net income gains, Harley-Davidson’s Q3 revenue was down 8%, totaling $1.66 billion.
|Motorcycles (thousands)||3rd Quarter of 2020||9 Months of 2020|
In its home market, Harley-Davidson has seen unit sales drop another 10% during Q3 (an 18% drop for the year, thus far), which is of particular note because of the upward surge that other brands have seen during the same time period.
But that Harley-Davidson should see the trend continue in Q3 is outside the norm for the US motorcycle industry by-in-large, and it should worry the folks in Milwaukee that the only market that rose in Q3 has been Europe.
Despite that rise in the European market, Harley-Davidson is still down 19% across the pond for the first nine months, with unit loses posted worldwide so far this year.
Surely, Harley-Davidson’s “Hardwire” plan will have to include how the motorcycle manufacturer can operate with such a significant loss in its yearly motorcycle sales demand.
To that end, so far we have seen some interesting moves from new Harley-Davidson CEO Jochen Zeitz and his team.
The Bar & Shield has shaken up its focus overseas (including moving to a distributor model in India), doubled-down on its heritage cruiser lineup, and stalled some of the new models the company was teasing under the previous administration.
Accordingly, the Pan America model is late to market; the Bronx roadster is MIA and presumed dead; the e-bike units have been spun into its own business venture without the Harley-Davidson name; and there certainly has to be bad blood for the brand after the Sturgis bike rally this year, which turned into a super-spreader event for the COVID-19 disease.
For now, we will wait to see what the pulse of the US motorcycle industry looks like, as we head into 2021 and collectively figure out what the new normal looks like.
Around the new year, Harley-Davidson will have to tip its hand on this long-touted, but never discussed, “Hardwire” plan, and from there we will finally be able to gauge the future prospects for this once American icon.