Over the last few years I have been writing columns and making videos about Harley Davidson Motor Company and where I felt they were succeeding but also failing. I deep dived into their financial reports and cross matched by quarter, six monthly and annual accounts to try to get a feel for how well the company were doing.
Anytime I praised the company, it would welcome a mild appreciation from Harley Davidson fanbase, however anytime I would criticise, it would be met with a volley of abuse, ridicule and disbelief.
However my assumptions and reporting in whichever form it took was always based upon actual reports or summations from financial analysts in the field.
Recently I have noticed a few other motorcycle commentators starting to follow this critical path and start to ask questions as I have been for a number of years, and it appears many are not liking what they are finding out.
The financial results appear to baffle logic and company income has risen but there are losses that appear to have not been counted or swept under the carper, which income is substantiated by sale to dealerships or rather motorcycles shipped.
The dealerships then have to sell the motorcycles to gain any profit. However if they stall in selling, eventually the flow of bikes will cease. If customers are not buying in numbers, then ultimately dealerships will not be buying the bikes from the company in the first instance either.
Over the last couple of years and with a large contribution from the Covid-19 pandemic and the response policies, many dealerships around the globe have had to change their business model or have closed for good with some having to sell to much larger automotive dealership chains.
The financial landscape is changing as we speak and perhaps only recently others are starting to realise what I have been highlighting for some time. That having a premium branded product at an inflated price is all well and good when times are fluid with credit or cash, but when people feel the pinch, they hesitate on new purchases or stick with what they have got.
This does not mean that sale will stop altogether but the reduced numbers will tell their own tale.
Harley-Davidson is an oddity in the automotive world as it has groomed many a life long passionate fan who have both literally and figuratively bought into the brand and supported it along the way. But times have changed and so have taste and loyalties.
The company have modified their marketing and sales to sell at a higher price point but at lower volume. This all works well for boutique brands but not for large corporations acting so boutique. The already expensive motorcycles are just getting even more so in a market that is favouring more economical means of transport…certainly for new purchases.
So how does the company throw any naysayer off the scent? Well they drip feed brand new motorcycles onto the market. The recent Fast Johnnie Enthusiast Collection and the Icon Electra Glide Highway King were very much in that vane, but the top of the tree CVOs will further aim to drawn the attention away from number, profits and loss and onto shiny paint, bigger cubic inches and new mechanical terms such as ‘VVT’ that people have to learn about.
I recently reported that the stock price had been falling and investors had appeared less bullish about investing in the company, in fact some even leaving for good. However whilst others may bathe in the warmth of a higher stock price and shiver when it falls, this is all relatively cyclical.
There have been questions from some reporters asking whether the stock price had been artificially inflated by company stock purchases or some sense of feel good factoring from past quarterly results, but the bullish analysts failed to note the already strained relationship between company and owner riders who have felt increasingly marginalised and forced out of ownership due to rising prices over many years. The bubble could be about to burst!
So is this deliberate smoke screening or is this rather a company still performing well in certain areas and trying to fend off potential future failings too. There is no doubt that nothing distracts more than a new bike, whether it sells or not. And because the company still lacks cheaper bikes for Europe and the Americas, albeit it has launched the X350 and X500 in China and will soon launch the X440 in India, their success is yet proven.
Whilst there is uncertainty for the popularity of the brand with older or current owner riders, the truth will out with the future riders and quarterly results yet to come.
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