Harley Davidson have recently released their 1st quarter financial results for 2023 and for the most part it is positive news for the American motorcycle manufacturer…apart from a whopping $56million loss. So what has caused this then?
Well their overall revenue is up 20% on this time last year. Motorcycles shipped out in readiness for the riding season is up 14% and revenue from motorcycle sales is up 21%…so where is this loss coming from.
Well it appears to be coming from their financial services department. In 1st quarter 2022, the HDFS boasted $86million+ operating income whilst in 1st quarter 2023 the HDFS shrunk to $58million+. However apparently it’s not all coming from here either…and the source may surprise some people.
Allegedly this has all to do with the post Covid-19 era and how bikers…predominantly in the USA were given cash assistance during covid which enable them to continue to buy and pay for cars and motorcycles. In that time, as very few people were defaulting on their motorcycle repayments, the so called ‘Repo’ industry all but essentially disappeared.
Now that the Covid payments have ceased, the number of default repayments has seen a dramatic rise and the repossession industry has not recovered in time to collect all the vehicles, hence why the company is apparently making a $56million credit loss.
Essentially there aren’t enough ‘Repo’ people to do the job. But H-D are going on the offensive and will be contacting defaulting owners directly and taking direct proceedings should they feel it necessary.
David Viney – Vice president and treasurer of Harley-Davidson, says it will be taking a more “active role on bike payment delinquencies” So it’s quite clear that customers have continued to buy bikes but have not been able to pay for them which is not surprising in these hardening financial times.
So it is an interesting scenario we have here with H-D. They continued to sell bikes at ever increasing prices and hence their financial books look good. But people can’t afford to pay for them, so the company can repossess the bikes to sell on again, earning even more money…but the only fly in this ointment is the lack of people to get the job done
How long will it last though?