Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[muddypaws]

Harley-Davidson Just Reported Its Worst Quarterly Sales in Recent History
Jan. 28, 2020 at 9:32 a.m. ET
By
Bill Alpert

    Email icon
    Facebook icon
    Twitter icon
    Linkedin icon
    Flipboard icon

    Resize icon

Referenced Symbols

    HOG
    -2.74%

Harley-Davidson reported the lowest quarterly sales since shares of the motorcycle leader started their long slide in 2014. December-quarter revenue from its motorcycle unit was 6% worse than Wall Street’s already pessimistic forecasts, while earnings fell short of expectations by 15%.

The stock (ticker: HOG) opened down 7% at $32.50.

[scotman623]

I’m hoping they start getting their chit together and figure out a way to change some of this... I have some ideas, But I’m not on their payroll so it doesn’t matter..... They need to start listening more to their customers wants....

[iski]

Harley stock price was 36.61 a year ago today.  Today's stock price is 34.86.  S&P is up 24%, same time frame.  Harley stock - a reflection of how the company is doing - is sucking hind tit. 

[JCZ]

I’m hoping they start getting their chit together and figure out a way to change some of this... I have some ideas, But I’m not on their payroll so it doesn’t matter..... They need to start listening more to their customers wants....

Their customers have been saying that for the past thirty years.  They focused on short term stockholder gains instead of long term customer satisfaction.

[RivRaptor]

And this is surprising to who?  Probably HD.  Has to be a conspiracy though, they (HD) are (planning/achieving) to drive the stock into the ground and do a stock buyback, because I can't imagine that this is an accident.  I'd like to believe that we are smarter as a species and capable of running a 100 year old company better than this......alas many old companies have been folding lately. 

[mark]

You’ve got to adapt to your environment or go the way of the dinosaur.  Unfortunately, you can’t go back in time and correct the problem.  Should have promoted the Revolution engine and offered it as an option in a variety of models.  Buell would have been a great platform for adventure and sport bikes. 

[scottt]

https://www.cnn.com/2020/01/28/investing/harley-davidson-earnings/index.html

Sent from my SM-J327T using Tapatalk

[scottt]

Their customers have been saying that for the past thirty years.  They focused on short term stockholder gains instead of long term customer satisfaction.

JCZ; you are right on target. The reason Harley is struggling is at min. Two fold. One, the customer base that grew Harley's business grew old ( I'm one. Bought 12 new over 28 years ). These customers have not only grown older, many have experienced less than desirable quality and product shortfalls. Two, competitors have not rested. There are many great bikes available. Motorcycles that perform, handle, ride and deliver better features at competitive prices to say the least. Granted, they are not Harleys but you cannot depend on brand loyalty forever nor can that be your primary reason to buy.

If I were buying another bike today I'd buy a used Harley. You can buy a low mile touring bike for under ten grand. My days of buying $30,000 bikes that need thousands more in upgrades are over.

All of these issues are driven by Harleys focusing more on there stock prices than product and customers.

Harley's ace in the hole is there huge dealer network, name recognition and customer base. All they need to do is build class leading motorcycles that customers want to buy. Might need to accept a lower margin. Investors would benifit in the long run.


Sent from my SM-J327T using Tapatalk

[PBSTN]

If they would stand behind their product. That's all it would take. This "negative" warranty crap. Keeps me from a new bike.

[scottt]

If they would stand behind their product. That's all it would take. This "negative" warranty crap. Keeps me from a new bike.

What do you mean?

Sent from my SM-J327T using Tapatalk

[J.D.]

The quality issues and moreso the denial of the quality issues has deterred me and quite a few others it seems from dropping premium dollar on an unreliable bike.  Competition is doing many things better than the moco right now.  Harley's desire to market the brand to everyone instead of staying true to their roots to build the best American made motorcycles has backfired.  Once they went public it was just a matter of time.  There's really no easy path forward at this point.

[FLSTFI Dave]

many have experienced less than desirable quality and product shortfalls. Two, competitors have not rested. There are many great bikes available. Motorcycles that perform, handle, ride and deliver better features at competitive prices to say the least. Granted, they are not Harleys but you cannot depend on brand loyalty forever nor can that be your primary reason to buy.

If I were buying another bike today I'd buy a used Harley. You can buy a low mile touring bike for under ten grand. My days of buying $30,000 bikes that need thousands more in upgrades are over.

All of these issues are driven by Harleys focusing more on there stock prices than product and customers.

Harley's ace in the hole is there huge dealer network, name recognition and customer base. All they need to do is build class leading motorcycles that customers want to buy. Might need to accept a lower margin. Investors would benifit in the long run.

Pretty much agree with what your saying.  I'm at 7 CVO since 2009, and have a good 10 to 15 years riding left in me, not retired yet.  Growing up Harley and Corvette were the American dream.  Now, there are other bikes that offer more power, better Handling and more features for less money.  Harley lost sight of what they were.  Corvette on the other hand continuers to be the best buy in the high performance sports car segment, you cant buy more for less from their competitors. 

The biggest thing pushing me away from a new CVO is Price climbing very fast, while features and items are being removed.  Blacked out is less expensive to make, mono chromatic paint is cheaper to do, removing vents closings, and shift pegs and so on.  Then top that with the poor quality.  6 of my 7 CVO's have required a new speedometer due to the runs on the inside of the glass.  Current CVO, a 2019 with 19300 miles on it is on its 3rd set of front brake rotors.  3 of my CVO's have required new compensates, one has required a new engine for lifter failure.  Left side hand module for head unit has failed on my last three CVO's. 

My 14 Corvette had zero warranty work done on it.  My 18 Grand Sport has had zero warranty work done on it.  My 17 F-150 has had the frozen lock issue only.

Dealer network is what keeps me on a Harley.  I do tour on mine.  I rode 25,941 miles in 2019

[Eqcons]

The biggest thing pushing me away from a new CVO is Price climbing very fast, while features and items are being removed.  Blacked out is less expensive to make, mono chromatic paint is cheaper to do, removing vents closings, and shift pegs and so on.  Then top that with the poor quality.  6 of my 7 CVO's have required a new speedometer due to the runs on the inside of the glass.  Current CVO, a 2019 with 19300 miles on it is on its 3rd set of front brake rotors.  3 of my CVO's have required new compensates, one has required a new engine for lifter failure.  Left side hand module for head unit has failed on my last three CVO's. 

My 14 Corvette had zero warranty work done on it.  My 18 Grand Sport has had zero warranty work done on it.  My 17 F-150 has had the frozen lock issue only.

You pretty much nailed it there, Dave.   I won't buy another due to the ever increasing price - it was a stupid price for a bike ten years ago, and it's even more stupid now.  Removing all the features from CVOs (and there are more than you list!) while upping the price is not how I'd do business.  And in terms of reliability - I've had all the replaced speedometers, and the new 110 engine, etc., etc., too.  The biggest one for me is the scandalous failure rate on the original wethead water pumps; a conscientious manufacturer would have had a recall, or a "product enhancement campaign" at no cost to the owners, but HD took their usual "We're not aware of any problem" attitude and had dealers charge the afflicted customer a large number of $$$ to replace something that was plainly NEVER fit for purpose.   Almost $50,000 for a vehicle that can never be called reliable, and is manifestly unsuited to the same mileages as a car of the same price, is just silly - plus see the other thread regarding the continuing erosion of the benefits of being a HOG member...   Current HD management - and their recent predecessors - are utterly clueless about how to run the company.  A product like theirs has to retain the loyalty of customers, and they seem to be making less and less effort to do that.   Their constant seach for cheaper Chinese suppliers to shave a few bucks off their cost, while upping the price of the bike, causes increasing quality and reliability problems, further alienating existing customers.    Sad to say, I think HD's days are numbered, at least in its current form.

[ultrarider123]

I just read the CNN business blurb.  Interesting

"Harley-Davidson has a big problem. Americans aren't riding its trademark hogs nearly as much as they used to do.

Shares of Harley-Davidson (HOG) fell 3% in early trading Tuesday after the company reported sales and earnings that missed Wall Street's forecasts. The stock is now down more than 10% this year.
Most alarming: Demand for Harley's bikes continued to fall in the United States -- even as they rebounded overseas.
Harley's retail sales in America were down 3% in the fourth quarter. That's the 12th consecutive decline. US sales fell more than 5% for the full year."


Funny that they don't say why sales are down.  We have a very good first-hand idea however.


A side note:  Has anyone noticed that the MoCo has revamped their website and the CVO models are no longer "stand alone" models?  They are bunched in with the touring line.

I believe Mr. Levatich is a bit out of touch with reality with his statement in the CNN report:


"But Harley clearly has bigger problems than global trade policy. The company is trying to revitalize its sales with the launch of its LiveWire electric motorcycle.

Harley CEO and president Matt Levatich struck a hopeful tone in the company's earnings release.
"We see 2020 as the pivotal year in the transformation of Harley-Davidson. This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles," Levatich said. "More and easier access to two-wheeled freedom on a Harley is well underway."


I thought that last line was a hoot...yes, there may be access but the line to purchase is dwindling and costs to "play" going up.

And as far as "build more committed riders", how much more committed will the "new" commitments be than current Harley ownership?  The current folks have put up with inferior product for years.  Does he think these newbies will put up with the same issues for as long as we have? 

WOW...

[Twolanerider]

Obviously there are less Harley buying riders.  The question becomes which is the cart and the horse?  Did lack of riders come first hurting Harley or did Harley's poor efforts lead to a lack of riders?

Obviously again the answer is some of both.  Having said that within the lifetime of this little website Harley's fortunes have changed from a time when people sold used bikes for close to as much as new bikes brought, there were wait lists for new bikes and new CVO bikes were waiting for for months or quarters.  Then problems began....

Lots of problems.  Recurrent problems.  Avoidance behaviors.  Arrogant behaviors.  And now there are bikes in dealerships for their 2nd and occasionally 3rd year since new, paint schemes are often underwhelming and less challenging from a manufacturing standpoint, price points have outpace the CPI significantly, and the company behaves as if it often can't understand why buyers (ex-buyers) respond as they have.  The chicken or egg in the Harley scenario may be mixed but it's easy enough to see which end of the egg came out of the chicken first.

[PBSTN]

What do you mean?

Sent from my SM-J327T using Tapatalk
I've only owned 1 Harley with a warranty. And whenever I had an issue. It was like pulling teeth getting it resolved. So to spend big money. For a new bike with a warranty. I'm just not interested. Jmo.

[FLSTFI Dave]

Harley CEO and president Matt Levatich struck a hopeful tone in the company's earnings release.
"We see 2020 as the pivotal year in the transformation of Harley-Davidson. This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles," Levatich said. "More and easier access to two-wheeled freedom on a Harley is well underway."


I thought that last line was a hoot...yes, there may be access but the line to purchase is dwindling and costs to "play" going up.

And as far as "build more committed riders", how much more committed will the "new" commitments be than current Harley ownership?  The current folks have put up with inferior product for years.  Does he think these newbies will put up with the same issues for as long as we have? 

WOW...

I do not know, but it seems to me, Harley's business model of cutting content of the bike, while raising cost of the bike, and ever declining quality is what is driving us highly committed riders away form the Harley brand, or at least away form the high profit CVO.  Sad to say, but when you have new front rotors put on your bike three times in 20K miles, where is the quality?  That's not even a full year riding.  Same bike now needs new speedometer, new left hand side control module.  Has already had seat replaced for excessive wear, shift levers replaced because all the black came off them, a saddle bag lid replaced because paint was flaking off.  This is a 40K bike, with very poor quality and workmanship.

Harleys problem is two fold, their poor quality which has gotten worse in the past ten years, and now the Harley rider has viable choices in the market with out getting on a Honda.

[iski]

This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles," Levatich said. "More and easier access to two-wheeled freedom on a Harley is well underway."

Or......

"We started as a bicycle with a motor company, and under my watch we will finish as a bicycle with an e-motor company.  Also - Freedom."

[J.D.]

The decision to develop another air cooled vtwin (TC platform limped along waaaaay to long) and not a modern water cooled drivetrain is a bad decision IMHO.  They had a great opportunity to use the VRod-based ohc engine in a bagger but instead killed it.  Seemed to be a decent and reliable platform.  Instead the unreliable TC engine was replaced with the arguably unreliable M8.  All while competition (e.g. Honda and BMW) developed relatively powerful and reliable drivetrains.

[timo482]

i really like my harley, and the three harleys before it, [my grand had a knuckle and a pan, dad a string of vespas] but im at the age where buying new is less than likely.  encouraging news? my 30 something neighbor just bought a new super glide [have not seen it but i think that is what it is] and my youngest boy just got a sportster, wants to learn to ride before buying a big twin.   however - 00 rear cam bearing, then 07 cranks, now m8 oil pumps.. combined with continuous dealer denial. [the neighbor bought max warranty and will ride stock, he has a shovel to hot rod on] the troubles make every person i know reluctant to buy new, let somebody else deal with the problems and then buy used.   the problem with this is that sales are half of what they were in 06.. so its a shrinking market [old farts like me] and the young guys have a price limit under 20  for a big twin, and under 10 for anything else.. so...  next worry is will the number of dealers shrink, i get most of my parts from the dealer, and i get tires and mounting from the dealer.. if they start going away that will really bum me out.

[Cvostu]

Dave. Just had my front rotors replaced on the mako jusr recently as well. Only 6k miles. New front tire sensor too. And the whole suspension upgraded cause the stock set up was so bad. On this kind of bike at this price it should be much better as workmanship and quality goes. Kids today don't seem to be riding much. They like Uber and cell phones. For those of us that are still buying, HD should be giving us a much better product.   Just my. 02.....Stuart..

[FLSTFI Dave]

Staurt,

You are 100% correct.  Rotor failure is unacceptable, I understand an occasional failure.  Like one on your or my bike, and no more on the other bike.  But 3 on mine in 20K miles, plus one on yours and I know two other 19 CVO road glides with rotor failure.

My big issue is quality, it has been going down since 09, and going down much faster since 17 for my experience with a 15, 17, 18 and 19 CVO.

Guess HD believes most will never have enough miles put on in the first two years of ownership for the lack of quality to bite them.  I find out quality as mine see over 20K the first year.

[J.D.]

I really think that is a big part of the Harley strategy - most owners ride very few miles and won't see the problems while under warranty.

[Cvostu]

On the rotors issue.   How can they warp so easily now.  I've had bikes with 75k miles and never had a problem.  My 16 has 40 k and still on the original rotors.  What's changed???    Stuart.

[J.D.]

Rotors will easily warp if the friction surface is not properly heat treated, or if they get overheated.  Overheating can be caused by being undersized for the application or too aggressive of a pad compound.

[92fxsts]

A side note:  Has anyone noticed that the MoCo has revamped their website and the CVO models are no longer "stand alone" models?  They are bunched in with the touring line.

CVOs haven't been "stand alone" for a number of years.  Early model years were individually assembled in a separate building by a small dedicated team.  Now days CVO's are just a bunch of accessories that are assembled on the same line as all the other big twins.  There's nothing premium about them other than the price tag.

[mark]

On the rotors issue.   How can they warp so easily now.  I've had bikes with 75k miles and never had a problem.  My 16 has 40 k and still on the original rotors.  What's changed???    Stuart.

My guess would be: 1) HD found a cheaper source for rotors, or 2) HD is using the same source, but the quality has gone downhill, either because HD wanted a less expensive rotor or the rotor manufacturer tried to increase its profits by making a cheaper rotor.

[grc]

On the rotors issue.   How can they warp so easily now.  I've had bikes with 75k miles and never had a problem.  My 16 has 40 k and still on the original rotors.  What's changed???    Stuart.

The single largest contributor IMHO is the purchasing department.  When you sacrifice quality for low price, you get what you pay for.  If you have reason to replace your automotive rotors and don't spring for the OEM parts, you will see the same thing.  Parts that used to be sourced in the USA were resourced to Mexico, and now much of the aftermarket stuff comes from China.  It's a never ending cycle of searching for cheaper and cheaper sources to boost executive compensation and shareholder "value", and quality / customer satisfaction is now on the bottom of the priority list.  I made the mistake of going with cheap aftermarket rotors on an old (over ten years) Escape a few years back.  The vehicle didn't get driven all that often in the summer, and those wonderful rotors turned to a pile of rust the first year.

It also doesn't help when they change the design of the Harley rotors used on the CVO's to a minimalist approach, eliminating the carrier structure and mass when they bolt the rotors to the wheel spokes rather than the hub.  They've had increased warping ever since that change was made, some caused by the rotors and some by the mounting surface on those wheels.

Notice if you will how all that "cost cutting" at Harley has reduced quality and reliability, reduced customer satisfaction, and didn't cause the price to drop at all.  In fact, the prices have continued to climb even as the bikes have been decontented and cheapened.  They absolutely do not care about the customers, and once again IMHO they really haven't cared for a long time.

Jerry

[Cvostu]

Gotcha Jerry.  But wouldn't you think it would be a great cost savings to HD if they made a good quality part and it lasted??? Look at all those free replacement rotors and the labor they wouldn't have to give away.  The poor quality just doesn't make sense. Stuart.

[dayne66]

Gotcha Jerry.  But wouldn't you think it would be a great cost savings to HD if they made a good quality part and it lasted??? Look at all those free replacement rotors and the labor they wouldn't have to give away.  The poor quality just doesn't make sense. Stuart.

That would require Harley to have some foresight .....so, that won't happen!
 

[WildClyde]

Notice if you will how, all that "cost cutting" at Harley has reduced quality and reliability, reduced customer satisfaction, and didn't cause the price to drop at all.  In fact, the prices have continued to climb even as the bikes have been de-contented and cheapened.  They absolutely do not care about the customers, and once again IMHO they really haven't cared for a long time.

Amen Jerry, Amen...

[grc]

Gotcha Jerry.  But wouldn't you think it would be a great cost savings to HD if they made a good quality part and it lasted??? Look at all those free replacement rotors and the labor they wouldn't have to give away.  The poor quality just doesn't make sense. Stuart.

If we were running the company Stu we would probably see the wisdom of better quality parts and engineering which would reduce warranty costs and improve customer satisfaction.  Unfortunately the people running Harley for the past two or three decades took the opposite approach, banking on the majority of their customers to not put enough miles on their bikes in the first two years to encounter all those warranty claims.  It's called short term thinking, and it's become the norm so far this century.  The CEO's and top executives do whatever it takes to make a personal killing in the short term, then leave a mess for the next guy while they sit back counting their money.

Jerry

[Cvostu]

I hear you Jerry loud and clear. With the decline of new younger riders and Indian or other better quality competitors arriving, HD will surely have their hands full. Maybe one day they will get it. If they don't, they shouldn't be surprised when they see the results. Stuart. 

[FLSTFI Dave]

On the rotors issue.   How can they warp so easily now.  I've had bikes with 75k miles and never had a problem.  My 16 has 40 k and still on the original rotors.  What's changed???    Stuart.

Seems something changed in the manufacturing process of the rotors.  This is my 7th CVO, the 09, 12, and 15 all went over 45K miles with no rotor issues.  The 13 is over 27K miles no rotor issues.  The 17 had 22K mile and the 18 24K miles with no rotor issues.  The 19 is on its 3rd set of rotors in 19,326 miles.

I have also noticed poorer quality on other items on the 19.  The seat looked like it had 50K miles on it at 12000 miles.  In fact on the claim for it we sent a picture of my 18 with 28K on it and my 19 with 12K.  The seat on the 18 had no wear.

Not only are they removing items from the bikes to save corporate money, they are reducing quality of materials. 

Really not a good business model, not even for investors.

[FLSTFI Dave]

Gotcha Jerry.  But wouldn't you think it would be a great cost savings to HD if they made a good quality part and it lasted??? Look at all those free replacement rotors and the labor they wouldn't have to give away.  The poor quality just doesn't make sense. Stuart.

As I have said and some one else in the Thread, Harley figures for the few high milage riders its worth the trade off.  So on the rotors if say only 15% of the bikes see more than 3500 miles a year, those are the only rotors they will be replacing under warranty.  But they saved 25% in cost on the new cheaper rotors, its a net savings of 10%.

Think of the twin cam  110 motor.  Lifter failure is very very common some where over 20K miles.  How many bike see 20K miles in less then 2 years?  Not many, so it was not cost effective to fix the issue.  A friends 14 CVO which was built after the new lifter that claimed to solve the issue, had his lifter go out while we were in WA, with 21K on the bike at a year old.  Another friend had lifer go out an motor replaced at 36K on has 15 CVO.  I had lifters go out at 44K on my 15 and engine replaced under warranty.

Yet I see 15 CVO on the floor for sale with 18K miles or so.  So, not fixing was cheaper for HD.

Sad to say their business model is make it as cheap as possible, but last long enough that the issues do not show up until after warranty for 85% of the riders.

[mark]

Now, I’m sure every decision at HD is based on how it impacts stock performance, not quality, customer satisfaction, etc.  If you’re under the gun to show a profit, and you can’t sell more motorcycles, then you’ve got to make them cheaper, or start clearing out your office.  I noticed the downturn seemed to start around ‘04 and got worse year after year.

[Cvostu]

Really sucks. It's all about the mighty $$. They're finding out that these dumbass decisions are showing up on paper.  Sad.            Stuart.

[iski]

HOG stock price history from January 1990 through January 2020

[Cvostu]

Speaking of 110s and lifters.  I have 36k on the 2016.    I better have them replaced huh??  Not ready for a failure at this stage of my life.  Is it OK that to have the dealer do it?? 

[J.D.]

Most people would recommend swapping out the lifters every 20-25k as preventive maintenance.

[ultrafxr]

Speaking of 110s and lifters.  I have 36k on the 2016.    I better have them replaced huh??  Not ready for a failure at this stage of my life.  Is it OK that to have the dealer do it?? 

I would definitely replace them as a preventative measure for sure if you don't have an ESP.  And I would replace them with the S&S lifter and replace the cam bearings with the Torrington style full complement bearing.

Now if you do have an ESP and still want to replace them on your dime I  think you should stick with the Harley lifters and have a dealer or an indy that the ESP administrator approves do the work.  Or with the ESP you could just wait and see . . . kind of depending on how long you plan to keep the bike. 

I had lifter failure twice each on two different 110" CVOs and the interval was from a low of 22k to a high of almost 50k before the failures so there is really no good way to judge just how long they will last until failure.  Friend has a 2010 CVO Ultra with over 60k and just changed out his as he became concerned he was living on borrowed time.

[Cvostu]

I'm thinking the same thing.  Borrowed time for sure.  I still have the ESP.  Do I have to wait for a failure to have them changed under the ESP?? Or do I just go get it taken care of on my own.    That is my question of the moment. 🤔. Stuart

[fastfreddy]

stu, if was me, I would just do it myself and nobody would need to know otherwise. im getting ready to do mine for the second time

[Cvostu]

That sounds like the most practical thing to do.  Getting stuck or stranded to me just doesn't make sense.  Lifters push rods and most likely cam bearings should do it I hope.  Stuart.   

[Texas 103]

Harley stock price was 36.61 a year ago today.  Today's stock price is 34.86.  S&P is up 24%, same time frame.  Harley stock - a reflection of how the company is doing - is sucking hind tit.

Might be a good time to Short HD...

[Texas 103]

stu, if was me, I would just do it myself and nobody would need to know otherwise. im getting ready to do mine for the second time

X-2 , Been there done that 2-X   

[FLSTFI Dave]

I'm thinking the same thing.  Borrowed time for sure.  I still have the ESP.  Do I have to wait for a failure to have them changed under the ESP?? Or do I just go get it taken care of on my own.    That is my question of the moment. 🤔. Stuart

Unfortunately the ESP will not cover replacing them if they have not yet failed, even though its much less expensive than replacing a failed lifter.

That sounds like the most practical thing to do.  Getting stuck or stranded to me just doesn't make sense.  Lifters push rods and most likely cam bearings should do it I hope.  Stuart.   

I would use a lifter other than Harley or Harley SE.  Look at S&s lifters or Woods Alpha lifter. 

Much less money to replace lifters before failure.  Once one or more fail you have metal through out your motor at minimum.  That was the way it was on my 09 under warranty.  That said my 15 failed so bad it took out the motor, Harley replaced it under warranty.  Had it happened two days later, the bike would have been out of its 2 year Factory warranty.

[Cvostu]

Good timing Dave. 👍.  I'm just going to it. I have a guy who is capable of doing it for me. I'm keeping the bike so I better get it done. Thanks for the replies.    Stuart.