Harley-Davidson and Indian Motorcycle Reveal Q3 Reports
Third quarter 2019 reports were released by both Harley-Davidson and Polaris last week on October 22, revealing a continual drop in sales for both. Harley’s decline was less than expected while Polaris’ Indian Motorcycle showed a decrease of “low-double-digit percent.”
Harley-Davidson Q3 Report
The downward trend continues for the Motor Company, but numbers in the Harley-Davidson Q3 Report are actually better than what was expected, suggesting that Harley has slowed the bleed. Sales are down 3.6% on domestic sales, but continue to grow internationally, with a 2.7% increase for the third quarter. Of the motorcycle product mix, the Touring segment (Harley’s largest chunk of the pie) is being hit the hardest with a decrease in unit sales of more than 10%. The Sporster/Street segment is down 6.5% while the Cruiser division is… well, cruising right along. Still, the numbers outperformed the expectations for Harley.
In the days prior to the Harley-Davidson Q3 report earnings release, H-D experienced a bit of a headache with the halt in production of the heavily touted LiveWire electric motorcycle. But production resumed after the alleged battery charging issue was found to be limited to a single motorcycle. The “shocking” issue proved to be little more than a speed bump for Harley-Davidson, and didn’t stop their stock from climbing back into the 40s.
The bigger headache for the Motor Company, and probably the darkest news of the Harley-Davidson Q3 report, is the 24% decrease in profits over last year’s period, which the company can mainly attribute to the spike in tariffs. Harley-Davidson sites the “Impact of recent EU and China tariffs” have nearly doubled over last year’s third quarter, having risen to a year-to-date total of $76.9M, further burdening the Motor Company.
(Polaris) Indian Motorcycle Q3 Report
Polaris reports that the decrease in Indian Motorcycle retail sales is in the “low-double-digit percent”—far outweighing the overall downward trend of the mid- and heavyweight motorcycle market. Gross profits also shrank substantially for Indian, from $20M last year to $12M in 2019, which Polaris says in the Indian Motorcycle Q3 Report is “primarily due to tariff costs and negative mix.”
Polaris mitigated some of the discouraging Q3 news with a big reveal of their all-new water-cooled V-twin PowerPlus engine on the same day as their quarterly report. If the low-double-digit deficit points to a decreasing market share for Indian Motorcycle, they are certainly aiming to get it back with the PowerPlus. Indian says it will pump out a class-leading 122 horsepower and will serve as the heart of the new Indian Challenger, an all-new fixed-fairing bagger that promises to be “the highest-performing American V-Twin ever developed.”
Click here for more about the Indian Motorcycle PowerPlus and Indian Challenger motorcycle.