Harley-Davidson Third-Quarter Retail Motorcycle Sales Rise
Harley-Davidson has announced that dealer new motorcycle sales grew worldwide and in the U.S. in the third quarter of 2014, "topping a strong prior-year quarter". Dealer new motorcycle sales grew 3.8 percent worldwide, 3.4 Percent in U.S.
"Harley-Davidson's third-quarter financial results were in line with our expectations, and we are on track for a year of growth and strong financial performance in 2014," said Harley-Davidson, Inc. Chairman, President and Chief Executive Officer Keith Wandell.
"We continue to see the success of our product, manufacturing and retail strategies, which are delivering an outstanding customer experience, driving bottom-line improvement and expanding the reach of the brand."
The company says that dealers worldwide sold 73,217 new Harley-Davidson motorcycles in the third quarter of 2014 compared to 70,517 motorcycles in the year-ago quarter.
"With the successful launch of the 2015 motorcycles in late August, including the return of the Road Glide models, and the outstanding efforts of our dealers, third-quarter retail Harley-Davidson motorcycle sales topped the strong growth of the year-ago quarter. A rebound in Sportster motorcycle sales from this year's second quarter and increased availability of the Street 750 and Street 500 motorcycles also contributed to these positive results," said Wandell.
In last year's third quarter, the Company launched its "game-changing" Project Rushmore line of touring motorcycles, which spurred year-over-year retail sales growth of 20.1 percent in the U.S. and 15.5 percent worldwide, giving the third quarter of 2013 one of the strongest single-quarter retail increases in recent years for Harley-Davidson.
This year, U.S. dealers sold 50,167 new Harley-Davidson motorcycles in the third quarter, up 3.4 percent compared to sales of 48,529 motorcycles in the year-ago period.
In international markets, dealers sold 23,050 new Harley-Davidson motorcycles in the third quarter compared to 21,988 motorcycles in the year-ago period, with sales up 12.8 percent in the Asia Pacific Region, 1.7 percent in the EMEA Region and 7.0 percent in the Latin America Region and down 5.8 percent in Canada.
Through the first nine months of 2014, dealers sold 220,850 new Harley-Davidson motorcycles worldwide compared to 214,964 motorcycles in the year-ago period, with retail unit sales up 1.9 percent in the U.S., 11.0 percent in the Asia Pacific Region, 5.9 percent in the EMEA Region and 1.2 percent in the Latin America Region and down 11.4 percent in Canada compared to the year-ago period.
The Company's diluted earnings per share were $0.69 for the quarter, net income was $150.1 million and consolidated revenue was $1.30 billion compared to diluted EPS of $0.73, net income of $162.7 million and revenue of $1.34 billion in the year-ago period. Third-quarter results reflect lower motorcycle shipments, as planned, compared to last year's third quarter.
Through nine months, Harley-Davidson 2014 consolidated revenue grew 6.8 percent, net income increased 16.9 percent and diluted EPS rose 20.1 percent to $3.52 compared to the year-ago period.
Third-Quarter Results: Operating income from motorcycles and related products was $146.3 million compared to operating income of $175.5 million in the year-ago period. The 16.6 percent decrease in third-quarter operating income resulted primarily from a decline in revenue driven by the planned reduction in motorcycle shipments.
Revenue from motorcycles was $815.4 million compared to revenue of $857.0 million in the year-ago period, a 4.9 percent decrease. The Company shipped 50,670 motorcycles to dealers and distributors worldwide during the quarter, in line with guidance and a 6.2 percent decrease compared to shipments of 54,025 motorcycles in the year-ago period.
Revenue from motorcycle parts and accessories was $239.7 million during the quarter, down 4.2 percent, and revenue from general merchandise, which includes MotorClothes® apparel and accessories, was $69.3 million, up 4.8 percent compared to the year-ago period.
Gross margin was 34.9 percent in the third quarter of 2014, compared to 35.3 percent in the third quarter of 2013. Third-quarter operating margin from motorcycles and related products was 12.9 percent, compared to operating margin of 14.9 percent in last year's third quarter.
Through nine months: the Company shipped 223,569 motorcycles to dealers and distributors worldwide, a 4.5 percent increase compared to the year-ago period. Nine-month revenue from motorcycles grew 9.6 percent to $3.60 billion, revenue from parts and accessories increased 0.8 percent to $709.4 million and revenue from general merchandise decreased 4.6 percent to $209.8 million compared to the first nine months of 2013. Gross margin through nine months was 37.7 percent and operating margin was 21.3 percent, compared to 36.4 percent and 19.2 percent respectively in the year-ago period.
Operating income from financial services was $77.8 million in the third quarter of 2014, a 2.2 percent increase compared to operating income of $76.1 million in last year's third quarter. Third-quarter financial services results reflect favorable net interest income and a higher provision for credit losses. Through nine months, operating income from financial services was $215.4 million, compared to operating income of $221.8 million in the year-ago period.
Harley-Davidson says it continues to expect to ship 270,000 to 275,000 motorcycles to dealers and distributors worldwide in 2014, an approximate 3-1/2 percent to 5-1/2 percent increase from 2013. The Company continues to expect full-year 2014 operating margin of 17.5 percent to 18.5 percent in the Motorcycles segment. The Company also continues to expect capital expenditures of $215 million to $235 million in 2014.
PowerDrive 6 transmissions
RIVERA Primo has had its line of left side drive and right side drive Softail style six-speed transmissions – the PowerDrive 6 – for 10 years, and still continues to offer them with a two-year unlimited mileage replacement guarantee.
The transmissions, housed in polished, chrome or black wrinkle casings, have close ratio 2.94:1 first gear; second gear 2.21; third gear 1.60, fourth gear 1.23; fifth gear 1.00, 0.860:1 overdrive sixth gear, forged and back cut gears for positive shifting, and a 32-tooth final drive pulley.
The PowerDrive six-speed is available fit ‘93-‘98 Touring models, ‘00-‘06 Twin Cam Softail style applications as well as ‘99-‘06 Twin Cam Touring applications, and it comes completely assembled with a black wrinkled oil pan and a billet aluminum oil fill spout that accepts the stock filler cap.
The oil fill spout is machined from a solid block of billet, with cooling fins added then mirror polished.
For those who want to use a PowerDrive 6, but want an Old School look, Rivera Primo has its Sharpeye kicker kit that is also available for OE five speeds and aftermarket six-speed transmissions.
RIVERA PRIMO
Whittier, California, USA
Tel: 562 907 2600
info1@riveraprimoinc.com
www.riveraprimoinc.com
Rough Crafts parts and accessories
ROUGH CRAFTS, the Taiwanese custom shop established by Winston Yeh, the winner of the Modified Harley class at the 2013 World Championship of Custom Bike Building, has an extensive range of aftermarket parts available, and many of them featured on the winning bike.
The Rough Crafts range includes a custom grill for use on stock headlights. Offered in black anodized or polished finish, the 168mm diameter grill fits all stock H-D 5.5in headlamps.
To accompany the headlamp grill Rough Crafts produces its grilled turn signals, which feature matt black bullet bodies with gloss black grills. The bodies, which are 2-5in long and have a 1-11/16in diameter, hold 12v, 8w dual filament bulbs.
A finned cover, designed to match the grill finish parts from Rough Crafts, is a feature of the company’s air filter kit. Two versions of the kit are available, one for ’04 and later Sportsters and for Twin Cams. The kits include not only a K&N filter element, but also an internal breather system.
Rough Crafts’ line of finned parts continues with its finned risers. The CNC machined 1.3in high riser feature stainless steel hardware and carry 1in handlebars. They have 1/2in mounting holes, making them suitable for most stock H-D applications.
To work with the finned risers Rough Crafts offers its Fighter handlebars, which it describes as a tighter version of H-D's stock handlebar on bikes like the Iron or 48 Sportster, but with a more compact look. The 1in, stainless steel Fighter bars can be ordered dimpled for use with stock controls or smooth for custom controls.
Rough Crafts makes its own grips to fit the Fighter handlebars with the Groove grips for 1in bars. They are currently available for cable throttles. Matching Groove foot pegs are offered too, which fit most H-D male mounts.
The Groove product range is completed with the Rough Crafts Groove gas cap for stock H-D applications.
ROUGH CRAFTS
Taipei City, TAIWAN
roughcrafts@gmail.com
www.roughcrafts.com
www.facebook.com/ROUGHCRAFTS
Lighting options from Zodiac
ZODIAC has Vintage headlights in stock that are styled like the lights used on most European motorcycles in the ‘50s and ‘60s, and unlike most Harley units that have a bottom mount construction, these feature left and right mounting points. Vintage headlights feature E-approved, 5-3/4in diameter halogen headlight units and are ready to take 60mm diameter speedos. The lights are supplied complete with a 12-volt 60/55-watt Halogen bulb, 12-volt 5-watt parking light and pre-wired fittings, and are offered in a choice of black headlight with chrome bezel or all chrome.
To ease mounting the Vintage headlamps, Zodiac also has matching headlight bracket kits available for use with 39mm and 41mm front forks in a choice of black or polished stainless steel.
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The Phase 7 light unit from Küryakyn is now also available from Zodiac. The Phase 7 is a DOT and ECE approved replacement for halogen lights. The LED headlamp produces light with a color temperature of 5,800K, closer to the color temperature of daylight than halogen bulbs and therefore said to provide better visibility. In addition the complex reflector design provides improved performance while providing the appearance of a traditional headlamp.
The maintenance-free lamp uses a solid-state, bulb-free system that's said to be impervious to damage caused by shock and vibration, with a die-cast aluminum housing, non-yellowing polycarbonate lens and a scratch-resistant hard coating to protect against damage from impact, roadside debris and other hazards.
Advanced LED technology in the Phase 7 is claimed to significantly reduce LED headlamp current draw compared to halogen products, 3.6 amp high beam and 1.8 amp low beam, allowing more power for other vehicle requirements and extended alternator life, while using the standard H4, three-blade wiring connector.
Moving to the rear of the bike, Zodiac is offering Sparto taillights. Previously only available in chrome or polished aluminum finishes, they can now be ordered in a black finish too. Further options include bulb-style with or without TÜV/E-approval, as well as TÜV/E-approved with bright shining LEDs.
A second taillight choice from Zodiac is ‘The Factory’ light with a design inspired by classic microphones. Hand-cast from brass or aluminum, the taillight features bright LEDs for brake and taillight functions with an E-approved lens. The Factory taillights are, like most parts from the company, attractively packed in an ‘Old School’ wooden box.
ZODIAC INTERNATIONAL BV
Mijdrecht, NETHERLANDS
Tel: +31 (0)297 288 621
sales@zodiac.nl
www.zodiac.nl
Top Down Shredder Series
WHEN Top Down Products were approached by a customer who wanted a set of axle spinners reminiscent of those used in films by such characters as Ben Hur and James Bond, the company took him seriously and began working on designs. The end result has now been made publicly available as the Shredder Series axle spinners, which spin freely when mounted to the stationary ends of the bike’s axle.
The shape of the three rotating blades on each spinner was influenced by medieval double side axles, and are CNC machined from billet aluminum. To allow them to spin freely, stainless steel bearings are used throughout.
Although this exact blade shape is exclusive to the particular customer, other blade styles can be produced to give a variety of appearances.
Following on from the introduction of the axle spinners, Top Down is now producing matching Shredder floor boards. The Shredder floor boards mimic the shape of the Spinner blades and incorporate elliptical cutouts to break up the surface, a beveled outer blade edge and more than 50 polished stainless steel spikes to provide a durable boot grip.
The Shredder axle spinner fits all Harley-Davidson models, and floor boards are a bolt-on fit for Harley-Davidson Touring models.
TOP DOWN PRODUCTS
Exton, Pennsylvania, USA
Tel: 610 812 4089
info@topdownproducts.com
www.topdownproducts.com
Dealers say inventory balanced but traffic weak
The quarterly AMD/Baird dealer report conducted in July and August revealed that US new bike retail is tracking up three to five percent versus last year, but was expected to weaken in the fall.
Dealers report that traffic remains "challenged", but that inventory appears "balanced" with dealer sentiment on pricing suggesting that Harley made the right decision to cut production.
The dealer consensus outlook for 2015 new unit sales suggests that most are expecting to be up by low single digits.
The weaker than expected retail, attributable to slower traffic trends, appears to have been affected in July and August by a range of factors, including poorer than anticipated summer weather.
Despite retail trends tracking positively through July and August (+3 to +5 percent), comparisons for September and beyond get tougher as Harley laps the impact of the Rushmore launch last year, which saw a +20 percent spike in fall sales.
Baird are therefore saying that they are maintaining their Q3 US retail estimate of -3 percent.
Internationally Canadian dealers are reporting that new bike retail declined approximately 30 percent and are citing a weaker economy and unfavorable pricing during the third quarter; however, international markets outside North America appear to be seeing new bike retail increase by between one and three percent.
During the survey period one dealer is reported as stating that "traffic has been terrible since the second price increase"; another reported "very limited floor traffic - tons of calls and emails put out by sales, but still limited traffic overall", with another saying that "floor traffic is down considerably, but conversion rates are up."
The weather has clearly been a big factor, with one dealer saying that "it has rained almost every day at one time or other"; another that "the weather has been killing us. Rain and colder temperatures have been the norm lately - it looks more like spring than summer"; with yet another reporting that his store was "hoping for a warm fall and a late winter. We still have 14s to sell", and that in their opinion there was "no need to duplicate the FLHX and the FLTRX - just make the special model."
One dealer told AMD / Baird that "our local economy is terrible. Bike sales are down 20-24 percent over last year and still down 80 percent from 2006." That said, while one dealer has reported that the "used bike market fell", another said "used bike sales have increased over the last year and new bikes have held steady."
Dealers indicated that new bike inventory is "balanced" for this time of year, with 56 percent of dealers saying that inventory is "about right".
Dealer commentary suggests that inventory is heavy in Softail and Dyna categories, but that Rushmore and MY2015 inventory remain "appropriate - if not lean."
Additionally, dealers have reported tight used inventory, and Baird say that they've seen this reflected in healthy used bike values.
Some 76 percent of survey respondents indicated that inventory is "about right" or "too low" for the time of year, and Baird say that the sequential improvement in inventory comfort levels likely reflects Harley's decision to cut shipment guidance after weaker first half results - reflecting the company's commitment to protecting used bike values.
Based on Harley data and Baird's tracking, the average US dealer had 63 bikes at the end of Q2 - up from 60 last year.
One dealer is quoted as saying "2015 model year inventory is low and used bike inventory is lower than desired"; another stated that "even though we are down saleswise, both district and region, our new remaining 2014 and current 2015 inventory is just about right"; however, another dealer said that "new inventory should have been slashed in April when we all saw the slowdown and promotions should have been initiated sooner"; with another saying that "Harley has dealers with too many 2014 Softails and Dynas", with yet another stating that "new Softail, Dyna and Sportster inventory is way out of whack."
Referencing one of Harley's promotional campaigns, one dealer told the AMD / Baird survey "this .99% promo is crazy stupid. Hardly anyone qualifies, and if they do, then no one makes any money.”
In a sharp departure from recent conditions 82 percent of dealers are selling bikes below MSRP. After a slow start to the season Harley and its dealers became more promotional to clear out inventory in anticipation of the MY2015 launch, and in July management acted to help restore balance by cutting production.
"Carry-over 2014 models are causing creative pricing on left over Cruisers, but Touring family bikes are holding good margins" said one dealer; another stated that "not every dealer is discounting, and we don't, but it's amazing that some are already doing so on the 15s."
Another dealer told AMD / Baird that "dealers in this area seem to think that they have to drop their pants right away and give everything away. I say hold your ground, the customer will buy. We have the best game in town”, but another dealer told us that “looking at H-D sales ranking reports in this district over the last couple of years it’s real easy to see what's happening. A lot of good, honest dealers out there with negative Rushmore sales growth.”
Dealers are reporting that overall the consumer financing environment remains stable (88 percent of dealers say credit has remained stable or eased recently) and that HDFS is responding to inventory feedback by "buying deeper and offering some really good low rate promos for Cruiser models."
Baird recently established a Harley-Davidson Dealer Sentiment Index, capturing both current and longer-term (3-5 year) dealer perspectives.
Current dealer sentiment has tracked down on a year over year basis (67 versus 73), likely due to the excitement dealers felt after the highly successful Rushmore launch last year. However, Harley dealers still hold an optimistic 3-5 year outlook (70 versus 72 last year). Sentiment readings are calibrated from 0-100 with 50 providing a "neutral" outlook. Baird say that their Harley-Davidson Dealer Sentiment Index indicates a high level of dealer confidence, and that while dealers expect retails sales to be essentially flat in 2014, their outlook improves to low single digit increases in sales for 2015.
In terms of opinion on the new models, Baird say that while the highly successful Project Rushmore launch last year was a "home-run" and the MY2015 Road Glide received overwhelmingly positive dealer feedback this year, their research validates that the absence of the Road Glide was a retail headwind in late 2013 and early 2014, and Baird say that they expect retail to benefit over the next year from the substantial Road Glide upgrade.
Robert W. Baird & Co. Inc. is an employee owned wealth management, capital markets, asset management and private equity firm that was founded in 1919 and is headquartered in Milwaukee, Wisconsin. The company says that it currently has $105 billion in client assets.
Any AMD readers who would like to see this or future AMD/Baird quarterly Harley-Davidson dealer surveys in full, or any authorized Harley-Davidson dealers who would like to participate in future surveys, can contact AMD’s Information Editor Sara Viney by email (sara@dealer-world.com).
S&S rebuilds stock engines
FOLLOWING Harley-Davidson's decision to discontinue its factory engine remanufacturing program, S&S Cycle have issued a timely reminder that their rebuild program is available to authorized Harley-Davidson as well as S&S dealers, and that the program is for remanufacturing of H-D (stock or modified) as well as S&S engines.
The company says that they offer a fast ten working day turn-around from receipt and that you get the same engine back, meaning that you get to keep the original VIN.
Engines are rebuilt with Premium Viola V-Twin service parts and can be rebuilt to stock specifications or have an S&S performance kit installed, with existing performance upgrades retained if they are still serviceable.
S&S say that their rebuild program features a 30 day labor and one year parts warranty, and that their beneficial freight rates mean that they offer no cost shipping to their dealers on engines for rebuilding.
Traditionally only available to S&S dealers, if you do not currently have an S&S Cycle account, no problem, because the company says that an engine rebuild package meets or exceeds their annual account spend criteria.
New parts and seats from Drag Specialties
AMONG the latest product releases from Drag Specialties are these slotted wide blade lever sets. Designed to be used to upgrade worn and weathered stock levers, the sets feature forged aluminum construction with CNC-machined slots.
In a choice of chrome or matt black, the lever sets fit ‘14 FLHT and FLHX models with the OEM hydraulic clutch.
A second part, which can be used to replace or upgrade the stock unit, is the Drag Specialties electronic combined speedometer/tachometer, which measures speeds from 0-220km/h, with the tacho measuring rpm from 0-8000. It has a black face that matches the stock gauge look and also features an LCD odometer, trip meter, and all stock indicators, including a Check Engine light.
Drag Specialties’ electronic speedo/tacho is a direct plug-in installation on ‘99-‘03 FLHR and ‘99-‘03 FXST, FLST and FXDWG models. It will also fit ‘96-‘98 models, which require a sub-wire harness, and all ‘96-‘03 models require the use of a tachometer wiring kit, sold separately.
Among the latest seats being offered by Drag Specialties are the Mini King and Queen seats for Panhead and Shovelhead applications. The seat features molded polyurethane foam and automotive-grade vinyl on the sides and seating areas and a 3/16in ABS thermoformed seat base. The fully carpeted bottom and rubber bumpers help protect the bike’s paint.
All Drag Specialties sissy bars, as well as most Harley-Davidson bars, will fit with the seat, and buyers have the choice of scorpion stitch, flame stitch, diamond stitch, diamond red velvet or diamond blue velvet designs. Matching sissy bar pads are also available to complete the look.
Seats fit ‘58-‘65 Panhead and ‘66-‘84 FX, FL and FLH Shovelhead models.
A 3/16in ABS thermoformed seat base also features on the Drag Specialties Predator seat for FXS and FLS models, as does solar-reflective leather in the seating area and automotive-grade vinyl on the sides.
Predator seats, available in smooth or flame stitch style, fit with all Drag Specialties and most Harley-Davidson sissy bars, and all mounting hardware is included to fit the seat on ‘11-‘13 FXS and ‘12-‘14 FLS models.
Alongside its seats for H-D applications Drag Specialties also has options for Victory Motorcycles such as its Low Profile Touring seats for the Victory Hammer ‘05-‘14. The use of solar-reflective leather in the seating area and automotive-grade vinyl on the sides is claimed to reduce surface temperature by as much as 25 degrees for a cooler seat, higher durability and longer life than conventional leather or vinyl. The seat also has flexible urethane foam for maximum comfort.
The seat can be used with or without driver backrest, while the 3/16in ABS thermoformed seat base with carpeted bottom protects the bike’s paint. All mounting hardware is included with the seat, which is available in a choice of mild or flame stitch pattern.
DRAG SPECIALTIES
Janesville, Wisconsin, USA
Tel: 608 758 1111
drag@dragspecialties.com
www.dragspecialties.com
PARTS EUROPE
Wasserliesch, GERMANY
Tel: +49 (0)6501 9695 0
sales@partseurope.eu
www.partseurope.eu
Bolt-on Sportster trike conversion kits
PAUGHCO’S new trike conversion kit has been designed for the Sportster. The custom swingarm and rear axle pieces used in the conversion kit bolt directly in place of the stock swingarm assembly and utilize the stock belt or chain, depending on model. Once fitted all that is needed is a choice of GM 5 x 4.75 bolt pattern wheels and tires.
The rear axle assembly used in the Paughco kit features a 70T 1-1/2in wide belt pulley or
51T chain sprocket, brake rotors, chrome four-piston calipers and limited slip differential. The stock shocks bolt directly to the new swingarm and OEM shock mounts. Rear axle assemblies are finished in black powdercoat and the swingarms are shipped as raw steel.
Paughco Trike swingarms are offered for XL models ‘86-’10, and the axle assemblies can be ordered for both chain and belt applications.
PAUGHCO
Carson City, Nevada, USA
Tel: 775 246 5738
info@paughco.com
www.paughco.com
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