Are Middleweight Motorcycles And ASEAN Regions The Future Of Harley-Davidson?

by Trefis Team
Rate   |   votes   |   Share

Harley-Davidson (NYSE: HOG) announced its Q1 2019 results on April 23, 2019, followed by a conference call with analysts. The company reported revenue in line with consensus of $1.4 billion, down by 10.2% year on year. The decrease is mainly due to lower shipments and lower gross margins. The earnings were recorded at $0.80, down by 22.3% year on year. The fall in revenue and earnings was anticipated as the company continues its efforts to turnaround its situation.


We have summarized our key expectations from the earnings announcement in our interactive dashboard – What Has Driven Harley-Davidson’s Revenues & Expenses Over Recent Quarters, And What Can We Expect For Full-Year 2019? In addition, here is more Consumer Discretionary data.


Key Factors That May Impact Future Performance:

Thailand Plant:

  • The company started supplying motorcycles to emerging ASEAN markets (Association of South East Asian Nations) from their Thailand operations late last year. The tariff mitigation realized allowed for more competitive pricing and access to more customers.
  • This resulted in an increase of 126% in Q1 retail sales in emerging ASEAN markets. The company further plans to supply China from Thailand by the end of the year, further leveraging the value of the strategy.

Sales Volume:

  • This metric has been the primary reason for the company’s fall in revenue and income. The company sold 228K motorcycles in 2018, down from 262K motorcycles in 2016 (a decrease of nearly 34K units).
  • The Heavy Motorcycle market shrinking in the US is one of the reasons for the fall, thus the company has started to push its focus to the untapped international markets.
  • In Q1 2019 the company sold more than 49K motorcycles worldwide, down by 3.8% year on year. In the US the sales were down 4.2% year on year even after an increase in market share as the overall 601+ cc marketplace is shrinking.

Middleweight Motorcycle segment:

  • Currently Harley-Davidson represents approximately 40% of the global 601+cc volume.
  • When the company rolls out their new middleweight motorcycles they will compete in segments representing 90% of the said global volume. Thus lending a very high importance to the upcoming middleweight segment.


Trefis has an estimate of $41 for Harley-Davidson’s stock. The slowdown in the global market and shrinking of its primary market has brought the company to a crossroads, as they now focus on new segments and geographies to take the growth forward.



What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Data

Like our charts? Explore example interactive dashboards and create your own.

Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Be the first to comment!