Harley sales trend toward bounce

21/07/2010 by info.

Harley-Davidson second quarter motorcycle sales revenue is reported up 2.8 percent compared to the second quarter last year at $831.6 million, with dealer retail sales of motorcycles reported down 8.4 percent (on second quarter shipments of 59,046 motorcycles) in a domestic US 651+ cc market that was down 10.1 percent.

At 59,046 second quarter motorcycle shipments to dealers were up compared to the second quarter of 2009 (58,179), and Harley is sticking by its total 2010 expectation to ship between 201,000 and 210,000 motorcycles.

International markets continue to perform well for the Motor Company compared to the pressure that the industry is under domestically, with retail sales in international markets down just 0.2 percent for the second quarter, and 1.1 percent (against 15.3 percent down domestically) for the first six months of the year.

In Harley’s quarterly fiscals press release CEO Keith Wandell is quoted as saying that the company is “making steady progress at executing its strategy to deliver results through focus. We are seeing the benefits of our restructuring and continuous improvement activities reflected in… the continued moderation in the rate of decline of retail new Harley-Davidson motorcycle sales again in the second quarter”.

However, although the firm’s second quarter results are definitely indicative that the business may now be stabilizing at the bottom of its decline cycle, the headline-grabbing statements coming out of Milwaukee continue to concern the future of the business as a Wisconsin icon.

As Wandell continues to “fix on the fix” (as one analyst put it) no options to further improve Harley’s business performance are being left off of his agenda.

With the company and its Wisconsin production employee unions embarking on negotiations for new labor agreements that would take effect in April 2012, Harley has issued the starkest warning yet that it could ‘think the unthinkable’ by setting a mid September 2010 deadline for new agreements that allow it to “close large cost gaps in its Milwaukee and Tomahawk production operations and improve flexibility to meet seasonal and other customer-driven production needs”.

The company says that if it “is unable to achieve those objectives through agreement with the unions… it will move Wisconsin production operations to another U.S. location”.

The cultural implications for the Harley brand are such that most analysts are assuming that it is unlikely to come to that, and that Wandell is tone-setting for the best possible deal.

However, given the strident moves that Wandell has led the company through already, nobody is betting on his negotiators being prepared to blink until they have math that meets their baseline.

www.harley-davidson.com

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