Harley-Davidson’s Asian sales up - GulfToday

Harley-Davidson’s Asian sales up


A rider during an event at Harley-Davidson Museum in Wisconsin, US. Reuters

Harley-Davidson reported stronger sales in China and other Asian markets and said US sales should improve in the second half of the year, positive news that offset a cut to its full-year motorcycle forecast and sent shares up 5.3 per cent.

“There’s a general sense of relief that the company’s earnings are expected to hold up fairly well despite lower motorcycle sales volume and operating margin guidance,” said Garrett Nelson, a senior equity analyst at CFRA. Harley’s challenges in the United States, which accounts for more than half of the company’s sales, are well documented - core customers are growing older and outreach efforts to attract new and young riders have yet to show results.

In a reflection of the demographic headwind, the heavyweight motorcycle maker’s stock price has declined by 46% in the past five years. In comparison, the S&P 500 has gained 50%.

To offset weak demand at home, Chief Executive Officer Matt Levatich is trying to make deeper inroads into some of the fastest growing two-wheeler markets in Asia through lightweight motorcycles. The push is part of a strategy to get half of the company’s revenue from overseas by 2027.

The latest results show those efforts are bearing fruit.

While retail motorcycle sales were down in the developed markets, they were up in emerging markets on the back of a double-digit growth in China and ASEAN markets.

Levatich credited the performance to the company’s decision to set up a plant in Thailand to serve the Southeast Asian market as well as China. The decision had drawn flak from both US President Donald Trump as well as Harley’s labour unions.


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