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Harley-Davidson Spirals Down, Announces US Layoffs, Builds Factory in Thailand
Wolf Street ^ | 18 July 2017 | Wolf Richter

Posted on 07/21/2017 8:13:13 AM PDT by Lorianne

Shares of Harley-Davidson (HOG) dropped 10% in the morning after the company reported second-quarter earnings and were down nearly 6% at the end of the day. Almost everything was bad.

Retail sales by its dealers in the US fell 9.3% in Q2, compared to a year ago, to 49,668 motorcycles. They were “down more than we anticipated,” the company said. And with “soft sales across most markets,” sales by its dealers globally fell 6.7%.

“Industry new motorcycle sales deterioration continued,” the company said in its presentation, lamenting “weak industry sales on soft used bike prices.”

In addition to the industry woes, its market share in Q2 in the US dropped 1 percentage point to 48.5%. Shipments in the quarter fell 7.2% to 81,807 and are down 10.8% year to date.

The 30-day delinquency rate on its $7.5 billion in motorcycle loans outstanding rose to 3.25%, from 3.16% a year ago, and from 2.7% in Q2 2015. The annualized loss experience on those loans reached 1.71%, the highest for any second quarter since 2010.

Total revenues fell 5.6% to $1.58 billion. Net income fell 7.7% to $258.9 million. And despite blowing $163.2 million on share buybacks in the quarter to lower the share count and thus prop up earnings per share, earnings per share fell 4.5% to $1.48.

Its dealer inventory is bloated, so it offered incentives on its 2016 bikes to clear them out, and that didn’t help its 2017 models, but it said bravely that it is “targeting significantly lower year-end US dealer inventory.”

(Excerpt) Read more at wolfstreet.com ...


TOPICS: Business/Economy
KEYWORDS: harleydavidson; layoffs; manufacturing; motorcycles; thanksobama
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1 posted on 07/21/2017 8:13:13 AM PDT by Lorianne
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To: Lorianne

That sounds like expendable income has dropped in the US. I’m not sure what Thailand is going to do about that. Nobody in Asia can afford those bikes, and nobody in the US is going to buy a Harley made in Thailand.


2 posted on 07/21/2017 8:16:31 AM PDT by JFoobar
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To: Lorianne

Congress needs to get off it’s tail and enact Trump’s tariffs.

Whether this would help Harley or not, it would at least help ensure that Americans are employed building motorcycles that Americans ride.


3 posted on 07/21/2017 8:17:25 AM PDT by DannyTN
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To: Lorianne

Pat Buchanan convinced Reagan to put import barriers on Kawasaki 30 years ago-reciprocity. Now what? Cut their pay in half?


4 posted on 07/21/2017 8:17:59 AM PDT by DIRTYSECRET (urope. Why do they put up with this.)
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To: DannyTN

Congress should pass tax reform, not tariffs at this point.


5 posted on 07/21/2017 8:18:35 AM PDT by bar sin·is·ter
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To: JFoobar
"nobody in the US is going to buy a Harley made in Thailand."

Or Mexico. Or Canada.

Moving their manufacturing out of the USA would be instant suicide. We already have more than enough rice rockets.

6 posted on 07/21/2017 8:19:24 AM PDT by Governor Dinwiddie
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To: bar sinĀ·isĀ·ter

They should do both. No amount of tax reform is going to stop off-shoring. Tariffs are necessary and worked well for this country for 180 years.


7 posted on 07/21/2017 8:19:48 AM PDT by DannyTN
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To: Lorianne

Harley sells too many models, and are quite overpriced. Not to mention that the market is saturated with low mileage used bikes. They should have to adapt to the market or perish, like any other business.


8 posted on 07/21/2017 8:21:29 AM PDT by rottndog ('Live Free Or Die' Ain't just words on a bumber sticker...or a tagline.)
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To: JFoobar

Harley-Davidson = rice burner???

Say it ain’t so!


9 posted on 07/21/2017 8:21:37 AM PDT by elcid1970 ("The Second Amendment is more important than Islam. Buy ammo.")
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To: Lorianne

I’d say some of the problem, maybe most of it, for Harley-Davidson is the success of Polaris with Indian. The rest of the industry may be in a slump, but Indian isn’t, they’re gorgeous, they’re stepping on Harley’s stock in trade while being more reliable.


10 posted on 07/21/2017 8:22:04 AM PDT by RegulatorCountry
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To: Lorianne

Baby boomers entering old age, and H-D bikes don’t have the same appeal to millennials.


11 posted on 07/21/2017 8:22:05 AM PDT by Stevenc131
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To: Governor Dinwiddie
We already have more than enough rice rockets.

Egad I hate those things. Almost as much as the idiot kids who drive them.

12 posted on 07/21/2017 8:23:10 AM PDT by Bloody Sam Roberts ("Good judgment comes from experience, and a lot of that comes from bad judgment." - Will Rogers)
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To: rottndog

“...the market is saturated with low mileage used [Harley-Davidson] bikes...”

Verrry interesting! Why should that be so?


13 posted on 07/21/2017 8:24:06 AM PDT by elcid1970 ("The Second Amendment is more important than Islam. Buy ammo.")
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To: Lorianne

I think HOG water downed their brand in many ways. Throw in a shift in demographics and other complications. Starting to get that Tata motors feeling in the future....Probably a Chinese company this time.


14 posted on 07/21/2017 8:24:39 AM PDT by Theoria (I should never have surrendered. I should have fought until I was the last man alive)
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To: Lorianne

Aren’t motorcycle sales generally half of what they were a decade ago?

Worsening and more dangerous roads, older population and declining standard of living.


15 posted on 07/21/2017 8:24:45 AM PDT by jjotto ("Ya could look it up!")
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To: jjotto

High union wages driving prices up and manufacturers going offshore to regain those lost profits.


16 posted on 07/21/2017 8:26:34 AM PDT by DaveA37
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To: Lorianne

HD - proud sponsor of Sturgis... the Yuppie infested circus.

{shrug} I heard Hell’s Angels ride rice-rockets these days.

How did that happen — And, how much laundry can a single batch of Brew do?


17 posted on 07/21/2017 8:28:54 AM PDT by HLPhat (It takes a Republic TO SECURE THESE RIGHTS - not a populist Tyranny of the Majority)
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To: DannyTN

Tariffs should be a last resort, we should try to incentivise businesses to keep their manufacturing here because of a value proposition not because a threat.

But with that said, all economic tools should be left on the table.


18 posted on 07/21/2017 8:29:13 AM PDT by bar sin·is·ter
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To: DIRTYSECRET

Harley hasn’t developed new engines to offer other consumers that are not V-twin.

There is a certain percentage who don’t like the V-twin. Don’t like the sound, don’t like the performance characteristics.

FOr anyone who’s ever owned/ridden a ricer, they are FAST, fun and reliable. Put 80,000 hard beaten miles on a 1000cc Kawasaki Ninja. When it was done there was nothing left but memories, and no regrets.


19 posted on 07/21/2017 8:29:29 AM PDT by Ouderkirk (To the left, everything must evidence that this or that strand of leftist theory is true)
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To: Governor Dinwiddie

——Rice Rockets——

Such quaint drivel.

Harley was resurrected and did very well. So well as a matter of fact it has saturated it’s own market.

With respect to Thailand, it eludes the mind of the isolationists here that the products made in Asia will be sold in Asia. When it was apparent that there was little or no room for growth here, Aisia is a good place to grow.

Young and upcoming Asians might like an American Bike tailored specifically to their wants and needs


20 posted on 07/21/2017 8:30:11 AM PDT by bert (K.E.; N.P.; GOPc;WASP .... The Fourth Estate is the Fifth Column)
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