Electric bicycles in the snow, bikes made in Thailand and Europe, lower prices, higher costs, tariff wars and removable batteries are all part of the Harley-Davidson and Polaris 2018 sales and revenue results.
Harley-Davidson spent the weekend showing off its new electric bicycle and scooter to young thrill-seekers at the X Games in Aspen, Colorado, before announcing their 2018 results.
2018 sales results
No wonder they are seeking a new and younger audience as the company report their motorcycles sales results were down 6.1% in 2018 to to 228,051.
The big problem is in the US where sales were down 10.2% to 132,868, while international sales were actually up 0.4% to 95,183. Australia, however, was down 21.2% to 7019.
It’s not just Harley feeling the domestic pinch. Indian Motorcycle was also down “low-double digits” percentages last year in North America, but up “single-digit” percentages worldwide. (Unlike Harley, Indian’s parent company, Polaris, does not give actual figures, but vague percentages.)
Also, unlike Harley, Indian Motorcycle was up 8.7% to 836 in Australia, one of only four companies to register growth in the market which was down 9.6%.
Both Harley and Polaris have blamed the tariff war for higher costs and lower motorcycle revenues.
President Donald Trump’s tariffs on international steel and aluminium plus retaliatory tariffs in Europe and China have cost Polaris more than $30m.
Harley-Davidson CFO John Olin says retaliatory tariffs will cost them $US100-$120 million this year. That does not include metal cost increases.
It is believed the trade war effectively wiped out all of Harley’s 2018 profit.
As a response, both companies are building more motorcycles overseas.
Harley kept a lid on prices in Europe despite the tariff rises, but say their new Thailand plant will lower pricing in “certain international markets”.
Given Australia’s free trade agreement with Thailand and our proximity to South East Asia, we could expect motorcycles and/or parts to come from there. Could we also expect lower prices?
Polaris increased prices in “some markets”, mainly Europe, not in Australia. They are also “accelerating European motorcycle production in Poland”.
2019 and beyond
While Indian has the FTR 1200 coming in the next month or so, plus possibly Renegade and Raven models later this year, Harley is banking on new customers for electric bikes.
The LiveWire electric sports bike launches in the USA and Europe in August this year at almost $US30,000. When it arrives in Australia in 20120, it may cost more than $A40,000.
If that is any indication, their electric bicycle and scooter will also be quite expensive.
Harley say their goal with these electric vehicles is to attract new riders.
They also point out that these products will not require a motorcycle licence. That’s important because the increasing and prolonged process of obtaining a motorcycle licence is one of the main reasons millennials are not riding.
Harley have been on a big push over the past year to teach more people to ride through their Riding Academy and claim to have licensed more than 52,000 new riders in the USA.
Over the weekend, Harley also unveiled some more details about their electric bicycle and scooter which are coming in the next couple of years.
Interestingly, the battery design is intended to be removable.
It will enable owners to carry the battery in one hand “to an apartment or office space to charge using a charging dock that plugs into any standard household power outlet”.
This is not a feature of the upcoming LiveWire. However, it may be a feature in other electric motorcycles from the Milwaukee brand.
Harley boldly proclaimed they will “lead the electrification of motorcycling”.
“These two new concepts are manifestations of that vision, and alongside the production 2020 LiveWire motorcycle, point to a broad portfolio of electric two-wheelers designed to establish the company as the leader in the electrification of mobility over the next several years and inspire new riders with new ways to ride,” the company says.