Harley-Davidson

H-D Q3 North America Retail Unit Sales -10%, Global -13%, 9-month Global Retail Unit Sales down -5%, Motorcycle Revenue -32%



Harley-Davidson's third quarter retail unit sales do not make pretty reading. They are down by -10% over Q3, 2023, in North American Retail Unit Sales terms, down by -13% in Global Retail Units Sales terms.

However, in the context of annual global unit sales progress it may have bought itself a 'Mulligan'. Nine-month year over year North American Retail Unit Sales are cited as being ('only') down by -1.7% YTD with Global Retail Unit Sales down by -5% year-over-year. 

"We have worked diligently through the quarter to mitigate the impact of high interest rates, and the macroeconomic and political uncertainty that continues to put pressure on our industry and customers, especially in our core markets," said Jochen Zeitz, Chairman, President and CEO, Harley-Davidson. 

Able to point to a 75% share of U.S. Touring motorcycle unit sales, an increase of 4 share points year-over-year, Zeitz went on to say, again, that "we are very pleased with the reception of our touring launch, with customers and dealers alike, and are working hard to set the Company up for a solid 2025."

Setting aside that "solid" is hardly an 'inspirational' ambition, Zeitz clearly recognizes that it is nonetheless 'aspirational' in the present context. In his prepared remarks he concluded by saying that "we are optimistic about our ability to make sound progress in the new year," with further interest rate reductions and improved consumer confidence a needed tailwind for the motorcycle industry, apparently all critical to Harley management's ability to reverse the company's present direction of travel.

In the vendor conference call that accompanied the release of these numbers, there were some references that the 2025 new product offer could also point to sunlit uplands. However, there was also a growing sense of concern from the analysts charged with safeguarding their investor's interests that, at this stage, Harley is not giving them enough that is 'motivational' where recommending H-D as a 'hold' is concerned.

In advance of the release of Harley's Q3 Financial Report, Rick Barrett for the Milwaukee Journal Sentinel reported that an early October 2024 research note by respected Harley observer Craig Kennison (of Milwaukee-based Baird Equity Research) pointed to dealer frustration centered on the ongoing issues surrounding high inventory ('Channel Stuffing' as it has historically been referred to) and the resulting "related price discounting". 

"U.S. dealers we contacted reported significant retail declines," Kennison wrote. "They cited several reasons including the economy, the election, and weak showroom traffic," he added.

Barrett reported that "this follows the negative attention that Harley had received this summer including calls for boycotts of the company's products over diversity, equity and inclusion policies. Product recalls, labor unrest over additional manufacturing sent to Thailand, and a $287m court judgment against the company also made headlines."

Kennison says that "the company was in the news for all the wrong reasons, fueling frustration among stakeholders." The Baird report stated that "by a margin of 71% to 13%, dealerships thought motorcycle inventory was too high [rather] than too low."

In Kennison's view "everyone is marking down product significantly. A race to the bottom," and as a result Baird downgraded Harley stock to a Neutral rating. "We see value in the brand, but it is best to sit this ride out as pressure builds from riders, dealers and shareholders."

Harley shows Q3 dealer inventory as being at least 10,000 units higher than the year-ago (60,000 units vs. 50,000), and Zeitz continues to say that Harley expects "retail units sold and wholesale unit shipments" to be "balanced" by the end of 2024. "Dealer inventory should be at similar levels as at the end of last year," Zeitz had said, having claimed that this implied a reduction in dealer inventory of approximately 30% versus the levels seen in the summer of 2024.

Q3 motorcycle shipments are put at having been around 27,500, which is -39% against the 45,300 shipped in Q3 of 2023. The worldwide unit retail sales total of 36,200 units (vs. 4,700/-13%) breaks down as 24,600/-10% for North America; 6,100/-23% EMEA; 4,800/-16% Asia Pacific and just 700 units in Latin America.

Q3 consolidated sales (HDI) were -26% at $1,514m. Revenue from motorcycles (HDMC) was put at $826m, down by -32% from Q3 in 2023, with P&A -6%, Apparel +13% and licensing -59%. The Tribeca, NYC based G&A and Licensing Creative Studio that was announced in February 2022 was finally closed with 25 people let go in April this year. The experiment was an unmitigated disaster with cash burned for no real gain. 

HDI operating income was -49% at $106m. HDMC. HDMC gross margin was 30.1% with operating income of just $55m (-69% from $175m in 2023), and Q3 operating margin for Q3 $6.3m vs. $13.5m for the year-ago period.

HDFS operating income increased by $17m in the third quarter, (+ 29%). The result was driven by higher interest income and a lower provision for credit losses, partially offset by increased borrowing costs, where operating expenses were largely flat.

LiveWire revenue for the third quarter decreased by -41%, due to a decrease in STACYC third party branded distributor volumes. LiveWire's operating loss of $26m was $1m more than a year ago, largely in-line with our expectations. In an embarrassingly wide forecast LiveWire expects 2024 full year electric motorcycle unit sales of between 600 and 1,000 units with an Operating Loss of 105 to $115.

Harley generated $931m of cash from operating activities and repurchased $350m of shares (9.5 million shares) on a discretionary basis; cash and cash equivalents were at of $2.2bn at the end of the quarter. Harley-Davidson, Inc. capital investments are expected to have been in the range of $225 to $250m for the full year.

For the full year 2024, the Company now expects HDMC revenue down 14 to 16% compared to 2023 with Operating Income margin between 7.5 and 8.5% and Operating Income up +5 to 10% compared to 2023.

NAMZ Custom Cycle Products

NAMZ - 'Across the Board' Price-Cut as Raw Material Costs Start to Abate

Jeff Zielinski, of Oreland, Pennsylvania based NAMZ Custom Cycle Products fame (NCCP), has always been a highly respected operator - let's face it, you have to be, if you're going to manage to build your business consistently for 25 years.

A prolific new product developer ("the ideas man"), NAMZ continues to add to its product range regularly - indeed there are two late model touring harnesses featured in the Pro-Guide section of this month's AMD.

The past five years have not been easy for anybody, with supply chain inflation and other issues driving up prices and causing shortages and delays - to say nothing of Covid, multiple wars and Asian manufacturing putting price-points and product design issues under pressure like never before.

Kudos then to Jeff for a recent announcement - a rare one in our experience - announcing an across the board 5% price reduction for all NAMZ and Badlands products, and 10% for Lectric Lighting Co. products, now that the supply chain inflation that affected his specific manufacturing activities has abated somewhat.

Addressing his dealers, Jeff states that "in today's world of uncertainty, inflation and sky-high prices, we want you to know that we feel your pain.

"Over the last few years, NAMZ was forced to raise prices on all of our products due to rising raw material costs. Covid didn't help matters, but we knew that like all good things, bad things can come to an end as well.

"Being an 'American Made' company that takes a ton of pride in its work, we wanted to give back to our customers for staying loyal and continuing to support our 'American Made' products and lighting. We still live in a world of uncertainty, corrupt politicians and high prices, but our costs have come down, and we would like to pass that on to our dealers.

"With that, we are happy to reduce our pricing across the board on all NAMZ, Badlands and Letric Lighting Co. products. New lower pricing for all of our brands went into effect on October 1st, 2024, throughout our systems here, our distribution channel and our website."

If any other vendors have announcements like that they can make, we'd be delighted to pass the news on to AMD's international readership.

www.namzccp.com

S&S Cycle

S&S Cycle - Howard Kelly Returns

Just a few months after S&S Cycle announced that Charlie Hadayia had returned as Director of Business Development after a 14-year 'walkabout' that had included a spell at Tucker, the band continues to get back together with the return of Howard Kelly as Senior Director of Marketing. 

Kelly steps back into the marketing department at S&S Cycle from MiTek, a Berkshire Hathaway Company, where he spent the last six and a half years serving the commercial construction industry in the USA, EU and APAC markets. Kelly was last with S&S from 2004–2009 working on marketing and communications efforts leading up to the S&S 50th Anniversary and a series of engine service manuals.

"We are excited to have Howard back home at S&S Cycle," said Mark Platt, S&S Board Chair. "Howard brings uniquely valuable experience, passion, and excitement to the S&S Team and he is set to play a key role in delivering on our promise of Made-in-America Proven Performance for our customers - keeping them at the center of everything we do."

Kelly commented: "I left S&S saying I wanted a break from the powersports industry, during a season when worldwide economic pressure was impacting our industry's spirit and Comradery. With the next few projects we have lined up, I hope to see that come back. I must thank S&S Board Members Brett Smith and Mark Platt for showing me what I was missing and encouraging me to get back to my real passion."

Kelly's return to S&S Cycle, along with other recent organizational changes, "further bolsters the company plans to continue its legacy of creating industry leading marketing programs for insiders and customers. New products and core products that have driven the success seen over the last six decades will get plenty of attention and there may just be a few events that remind the industry just how much reach S&S brings."

www.sscycle.com

RumbleOn

RumbleOn Expands Dealership Footprint 

RumbleOn has expanded its 'Brick and Mortar' retail footprint in the USA with the acquisition of Revolution Road Harley-Davidson in West Bridgewater, Massachusetts.

Previously known as Monty's Harley-Davidson, it had been owned by Kathleen Monaghan - Joseph Cacicio, a New England native with extensive experience in the powersports industry, has been appointed General Manager.

RumbleOn CEO Mike Kennedy

Located mid-way between Boston and Providence, RI, the purchase marks RumbleOn’s 56th dealership and the first acquisition under CEO Mike Kennedy: “Dealership acquisitions are a crucial element in achieving RumbleOn’s Vision 2026 strategic plan. Revolution Road is a perfect addition to our growing portfolio of dealerships.”

Earlier this summer, RumbleOn opened Indian Motorcycle of Cincinnati, a market which had not been served by an Indian dealership previously, and recently also opened RideNow Powersports Houston, a dealership pilot project focused on selling pre-owned vehicles exclusively, with an emphasis on custom and touring motorcycles. Near Interstate 45 north of Houston, the location also carries a comprehensive selection of accessories and riding gear.

The newly renamed Revolution Road Harley-Davidson at West Bridgewater, Mass., now owned by RumbleOn.

 "Our strategic plan calls for us to carefully manage our capital and to run the best performing dealerships in the country," said Kennedy. "The three new dealerships we opened this summer, each one quite different, are great examples of how we will grow and achieve our goals and continue to focus our capital allocation on generating long-term per-share value for our shareholders."

www.rumbleon.com

BRP (Bombardier Recreational Products)

BRP to quit its marine business

The Quebec based owner of Swiss engine manufacturer Rotax - BRP (Bombardier Recreational Products) - has seen its balance sheet come under extreme pressure this past year, largely due to declines in recreational marine, snowmobile (Ski-Doo), PWC (Sea-Doo), ATV and UTV (SxS) vehicle sales in USA. 

Having tried to match its competitor Polaris Industries with an ambitious expansion programme to establish itself as a leader in the recreational marine sector, it has now announced a volte face, stating that it has started the sales process for its entire recreational boats division (assuming a viable buyer can be found). 

At this stage, the plan to see three-wheel roadster and ATV manufacturer CanAm return to the motorcycle market still appears to be going ahead. CanAm stopped making off-road bikes in 1987. Only this past summer, BRP unveiled the final production protypes of its urban CanAm 'Pulse' and adventure oriented 'Origin' electric motorcycles. In September, it announced that its dealers were now accepting pre-orders, with inventory expected to start to arrive at showrooms in France, Germany, Spain, UK, Italy, Belgium, the Netherlands, Norway, Sweden, Finland, Austria, the United States and Canada by the end of this year.

The brands concerned include Alumacraft, Telwater and Manitou - which has a new, recently hired CEO in the shape of former Polaris Off-Road and Indian Motorcycle divisional GM Steve Menneto. 

BRP only acquired Manitou (from Triton) in 2018. Two years later, it announced a slowdown of all and suspension of some marine segment product manufacturing, followed by the complete closure of famous outboard motor brand Evinrude. 

Since then, BRP had also been following an aggressive expansion programme to build adjacencies, especially electric vehicle capabilities, here in Europe as well as in North America. Here in Europe acquisitions have included Great Wall Motor GmbH in Austria and an 80% ownership stake in Denkendorf, Germany based Pinion GmbH, among others. Last year (2023) saw BRP open a brand-new, reassuringly expensive state-of-the-art European Design and Innovation Centre on the Cote d'Azur. 

BRP revealed that revenues had declined to CAN $3,873.6m for the first half of 2024 (-25.6%), compared to H1 2023 revenues of $5,207.4m. Gross profit was down to $856.5 (22.1%); EBITDA had nearly halved and net income of $493.2m became a net loss of CAN $0.2m this year.

BRP full year guidance for 2025 puts year-round product revenues down by between 20 and 22%, with seasonals down 30 to 33% and Marine down 40 to 50%.

"Our results were in line with expectations," said José Boisjoli, President and CEO of BRP, "and reflect our ongoing focus on reducing network inventory to maintain our dealer value proposition. 

"We have made great strides on that front, but the retail environment is more challenging with the economic context pressuring consumer demand. As such, our priority is to continue to proactively manage production and inventory levels, which leads us to revise our year-end guidance."

www.brp.com

Magnum Shielding

Magnum Brake Line Design Updates

Upstate New York based Magnum Shielding has made several changes and additions to its cable and brake line offerings for 2024. Some are in response to Harley's own specification changes, some are due to popular demand, and still others are new innovations that solve long-standing challenges.

As a Tier 1 supplier, Magnum has always offered products that maximize compatibility and customizability.  For example, Harley historically used quarter inch tube for its Touring lower brake lines, but this year it changed that to the smaller gauge 6 mm tube which can complicate brake line maintenance and replacement. The stock clamshell bracket that houses the tube and keeps everything tidy and secure is not compatible with existing quarter inch tubes. 

 

2024 Touring lower brake lines 

So, by having also switched to the new 6 mm OE fitment, using Magnum's brake line tubes mean that you can continue to use the stock clamshell bracket - otherwise, everything would have to be clamped or cable-tied together, which is certainly not a clean look and a hassle to accomplish.

Speaking to Magnum's Engineering Manager Chris Hughson at the recent Drag Specialties NVP Product Expo at Milwaukee, he said that "Magnum is probably the only manufacturer to have switched to the new 6 mm specification for compatibility reasons - certainly at this time."

In another change, Magnum has adopted the more contemporary barrel end inner cable fittings from the old school ring terminals to match the clutch cable changes that Harley has made on the 2023 and up CVO and standard Glides. "We figure that since Harley changed up the controls, they'll likely be on everything from next year anyway - though that is pure speculation on our part, we don't yet know that for sure.

2014-23 Touring ABS rear adapters and brake lines

XR Stainless universal brake lines

Then there are our new ABS rear brake lines for 2014 to 2023 Touring and M8 Softails, too. That is genuinely unique in that they are modular, so you can swap out the lengths of the flexible line.  This is Magnum's Designer Series modular concept applied to rear brake lines for the first time.

"So, for example, if someone changes the swingarm or goes to radial brakes, then they can customize with standard upper line part numbers by picking out a different banjo angle and length.  The same is true for extended forward controls.  Just choose a different length universal brake line," said Chris.

"Speaking of universal lines, we also added universal brake lines in our economically priced XR Stainless series in direct response to dealer requests."

MAGNUM SHIELDING

www.magnumshielding.com

Zodiac International

Zodiac International Additions

Bike2Play for Apple/Android

Bike2Play is an innovative solution that brings the power of Apple CarPlay and Android Auto to your motorcycle and transforms your rides into a connected and safer experience. 

Available in Europe from Zodiac International (Mijdrecht, the Netherlands), Bike2Play gives your customers seamless access to their maps, messaging, music streaming services and calling apps, all while keeping their hands on the handlebars and their focus on the road. 

"The weather-resistant design ensures that you stay connected in all conditions, whether it's raining or scorching hot. Bike2Play isn't just about connectivity, it's about enhancing the overall riding experience. 

"By securely attaching the Bike2Play 6" display to the motorcycle, the need to operate the cell phone while riding is eliminated - increasing safety and preventing theft. The optional DVR camera, with memory card slot, offers added security by recording journeys. Recordings can be viewed on the screen via the app." 

Kits come with adjustable clamps for 22 mm, 1 inch and 1 1/4 inch handlebars. Easily connected to the Accessory power outlet of the bike and via Bluetooth with your Smartphone.

Redthunder 2-into-1 Exhausts 

Featuring aluminum end caps calibrated sound, Zodiac describes Redthunder as the "perfect combination of sound and performance. The Redthunder R&D team has consistently engineered high-quality exhaust systems for enthusiasts who want a no-nonsense exhaust option that will perform and produce a superior sound." Their sound ranges from "deep, low tones to a more aggressive high rpm sound" for Milwaukee-Eight Softails and both Evolution and Twin Cam Dynas.

Vity's Design Billet Swingarm for Softails and Touring

Italian style and precision combine in this billet aluminum Softail swingarm. Stronger and lighter weight than the stock item it replaces, it is said to increase riding stability and improve control. Featuring upgraded axle and bearings, it is a fully reversible 'easy-install' with no permanent modifications to the bike - must be installed with a radial brake caliper such as the PM radial-mount 4-piston calipers with Vity's rear brake caliper bracket. 

Touring

Softail

Swingarm and caliper brackets are CNC-machined from billet aluminum and are raw aluminum or have an anodized finish. To allow multiple color combinations, the swingarm, caliper bracket and brake caliper must be ordered separately. Available for Softail and Touring models (the radial caliper is optional on Touring applications).

ZODIAC INTERNATIONAL BV

www.zodiac.nl

Biltwell

EXFIL-105 Dry Bag

Biltwell continues to expand its popular range of contemporary motorcycle luggage with this new EXFIL-105 Dry Bag - a massive bag that is meant to go across a large luggage rack or the rear of a seat and over saddlebags. 

EXFIL-105 Dry Bag - beer cans not included!

Given its many integrated tie-down points, it can be attached with any straps. The center section is thermally welded, so it is 100% waterproof, and the pockets on either end can be accessed without unstrapping the bag from the bike for "tons of extra, more readily available storage."

The UV-treated 1000D Tarpaulin PVC construction provides a smooth side to lean against as a backrest. Additional features include MOLLE on all sides for adding gear, oversized quick-release buckles, reflective stitching on webbing for nighttime visibility and FVT (Fart Valve Technology!) to bleed air out for compression.

Also new in Biltwell's EXFIL program is an updated and upgraded version of the first bag that the EXFIL range offered - the fine-tuned EXFIL-7 2.0 features a new lid with lower profile, laser-cut MOLLE slots and a wider zipper opening for the pocket. Four hook and loop fasteners make attaching to the motorcycle even easier than before, and all zippers now feature anti-rattle pulls.

Exfil-7 2.0 

Manufactured in UV-treated 1680 denier polyester nylon, Duraflex quick-release buckles with adjustable nylon straps allow for stowing a base layer or small bedroll with PVC-backed external chassis panels for added water resistance and hi-vis orange nylon interior. The interior volume holds seven 12-ounce cans - Biltwell's traditional metric for describing capacity!

BILTWELL INC.

www.biltwellinc.com