Savage Roads

Tuesday, January 31, 2017

Harley-Davidson Plans 50 New Models

                      Matt Levatich, CEO of Harley-Davidson..."We will continue to deliver what matters to riders"

Harley-Davidson Inc. leaders are counting on a slew of new models and drivers to increase sales and earnings.

In a call with analysts following the release of its fourth quarter and annual 2016 earnings today, Harley-Davidson (NYSE: HOG) president and CEO Matt Levatich said the Milwaukee-based motorcycle manufacturer plans to introduce 50 new motorcycles during the next five years.

The success we saw with the launch of the Milwaukee-Eight engine is a sign of the innovation we have in place. We are confident our 2018 line will also help sales,he said. I have never been more excited about the products in our pipeline.

Harley-Davidson plans to increase drivers — who may eventually become buyers — by adding foreign dealerships and introducing more Americans to the Harley lifestyle, Levatich said. Company plans call for adding up to 200 dealerships outside the United States by 2020. In the U.S., the company’s Harley-Davidson Riding Academy looks to teach people how to ride a motorcycle. In 2016, more than 65,000 riders were trained through the Riding Academy.

We do not just build motorcycles, we build drivers, too. We are focusing on the next generation of riders,” Levatich said.We want to add more dealers overseas and grow riders here in the United States, reaching out to new markets including younger riders, women, African-Americans and Hispanics.

For the fourth quarter of 2016, Harley-Davidson’s net income was $47.2 million, or 27 cents per share, compared with $42.2 million, or 22 cents per share, during the same quarter in 2015. Sales, however, were $933 million during the quarter, down from $1 billion during the same period in 2015. In the U.S., sales fell 3.9 percent.

International sales are a bright spot for the company, with sales outside the United States increasing 2.3 percent in 2016. Levatich said Harley-Davidson added 40 dealers around the world during the past year, with the manufacturer now selling 52.5 percent of its motorcycles outside of the United States.

Harley-Davidson shipped fewer motorcycles overall in the last quarter of 2016 to help dealers reduce their inventory, said John Olin, senior vice president and chief financial officer. The company is doing the same for the first quarter of 2017.

Olin said economic and political uncertainty in the United States and around the world contributed to lower sales. We believe we will see continued strong headwinds, but think the plans we put in place will help us continue to grow, he said.

While not giving specifics about what Harley-Davidson has under development, Levatich said they will change the way people view Harley-Davidson. It will push us into new markets. We are definitely entering a new stage of product development.

Levatich said the investments Harley-Davidson have made in both new product development and manufacturing deficiencies will have lasting benefits.

We will not see overnight returns, but we are making decisions that will attribute to long-term success,” he said. “We are adjusting to the new normal of U.S. market performance. We will continue to deliver what matters to riders.

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