Harley Davidson CEO Jochen Zeitz was rather buoyant following the unplanned closure of the York, PA assembly plant in the United States explaining that there was enough stock of bikes ready for despatch and already held at dealerships in order to meet the growing demand which goes hand in hand with the riding season getting into full swing in the Northern Hemisphere.
However, according to market analysts from UBS who have been doing their own research at dealerships, they would argue the demand for bikes has struggled since April whe really it should have started to rebound after the winter slumber.
April was a slow month, whilst May was an improvement, it was not at the levels one would expect. This information is causing some analysts to be more cautious about the future of Harley Davidson and this is being reflected in the stock price in recent week which has dipped below $35 and has fluctuated beneath there ever since.
So what is going on? Well assembly plant closures is never a good thing however this has nothing to do with the current mood. Rather it is the dwindling demand for the bikes and even more u turns on the brand itself in many quarters.
Consumers in the USA and other areas of the world have been voting with their feet as well as their wallets in recent months. Not only are they frustrated with the high prices of products but also the increasing disconnect with a brand that once was held so dear. There is also a growing negativity towards any brands that are becoming overly sensitive to minority issues which is not what affects the overwhelming majority of Harley Davidson owners.
The company for their part will of course sugar coat this year’s financial performance and unit sales, but the truth behind any success or failure was always going to be how the consumers reacted during this current year’s economic situation. To continue to assume that potential, existing or past customers would not be concerned with the elasticity of their purses has been folly and this is being paid in return with hesitation or absolute rejection.
The time for the company to address these trends is now and to reengage with a large customer base that is a little at odds with the current incarnation of an American iconic brand that was once sacrosanct. The analysts are yet to be nervous but are also neutral in their appraisal of the company where in recent months they were likely to have been overly enthusiastic based solely upon 2022 figures and not having listened and observed the mood within the biking community as a whole.
2nd quarter figures will be released in July which will give a good indication of how the company is really doing and what might be for the rest of the year too. Could a reducing popularity and demand mean that heads will roll or other merely to take their leave. It will certainly be interesting to watch this play out in the coming months.
Leave a Reply