Harley-Davidson warns motorcycle sales slowing
Plagued by tariffs and declining interest in motorcycles in the United States, Harley-Davidson’s sales continue to struggle.
The company delivered nearly 69,000 bikes for the quarter, down 5% compared to the same period a year earlier. Overall sales fell 6% to $1.4 billion.
Harley-Davidson has been trying to keep costs lower by shifting some of its manufacturing to Thailand, where it can avoid some tariffs and build motorcycles closer to European and Asian customers who are showing more interest in Harley’s products than American customers. Harley has been shipping bikes across the world from the United States.
The company recently received the necessary regulatory approvals to ship Thailand-built motorcycles to the European Union, which will reduce the amount of tariffs Harley has to pay. But that approval process took “considerably longer” than the company had planned, eating into its profit, which tumbled 19% to $195.6 million last quarter.
Weaker-than-expected demand in Europe ate into the company’s sales forecast. The company slashed the number of bikes it expects to ship this year to between 212,000 and 217,000. The company, based in Milwaukee, previously said it expected to deliver between 217,000 and 222,000 motorcycles for 2019.
Harley’s sales have dropped for several years as interest declines among younger people. President Donald Trump supported a boycott when Harley announced plans to shift some manufacturing overseas in response to tariffs.
In an attempt to rev up its business, Harley is focusing on international sales and new bikes.
Earlier this year, Harley released photos of two lightweight electric vehicle concepts that resemble slimmed down motorcycles, or electric bicycles without pedals. It declined to say if the prototypes will come to market.
The company also struck a deal in June to make small motorcycles in China. The country is a bright spot for Harley: Sales in the country increased 27% in 2018 compared to the previous year.
Harley’s stock fell more than 4% in early trading Tuesday.