COVID-19 Torpedoes Sales For Harley-Davidson In Q1

MILWAUKEE – Harley-Davidson’s sales nosedived in the first quarter of 2020 due to COVID-19, dropping 15.5 percent in the United States and 17.7 percent worldwide when compared to the first quarter of 2019.

The company’s U.S. market share in the heavy cruiser market dropped 2.2 percentage points to 48.9 percent.

(Polaris, meanwhile, reported retail sales for its Indian brand were up “low-single digits percent” and revenue from motorcycle sales was up 7 percent in Q1.)

In announcing first quarter results this morning, Harley-Davidson reported U.S. sales from January through March of 23,732 models, down from 28,091. Worldwide sales were 40,439, down from 49,151.

A “New Reality” For Harley-Davidson

“COVID-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality. The crisis has provided an opportunity to reevaluate every aspect of our business and strategic plan,” said acting president and CEO Jochen Zeitz in a press release.

Zeitz is promising “significant changes to the company; to our priorities, to our operating model and to our strategy to drive more consistent performance as we emerge from this crisis. We will reduce complexity, sharpen focus and increase the speed of decision-making. These efforts will pave the way for a new strategic plan that incorporates some key products and initiatives from the current plan but focuses on improved profitability and long-term growth.”

The goal, he said, is to “emerge as a stronger and more efficient company and reignite the Harley-Davidson soul.”

Goal Now Is to “Rewire” The Company

The company said it is now executing a process it’s calling “The Rewire,” a “set of actions … leading to a new strategic plan.” This process will “reduce complexity, sharpen focus and increase the speed of decision making.”

According to the press release, Harley-Davidson will “enhance core strengths” and “return focus to the strength of brand and company, starting with dealers, customers, stronghold products and committed employees globally.”

The company will also “narrow focus and invest in the markets, products and customer segments that offer the most profit and potential.”

Revenue Drops In All Areas

Overall, Harley-Davidson experienced an 8 percent revenue drop in Q1. Revenue from motorcycle sales was off 6.8 percent, while down 15.7 percent from parts and accessories, and down 11.3 percent for general merchandise.

Harley-Davidson attributed the downturn to COVID-19. “U.S. retail sales were up a strong 6.6 percent until the pandemic took hold in the U.S. in mid-March,” the company said.

Motorcycle sales in Q1 were down 28.4 percent in Europe, the Middle East and Africa, 24.7 percent in Canada, 21.5 percent in Latin America, and 5.3 percent in Asia Pacific.

(Photo courtesy of Harley-Davidson)

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