Polaris

Polaris Reports Q2 Adjusted Sales +18% at $1,779 million; Indian Gains Market Share on Down Sales

North American Side-by-Side retail sales increased low-single digits percent for the quarter compared to last year; Indian retail sales were down high-single digits percent, outperforming the industry and gaining share in an extremely challenging market.
Motorcycles segment sales, including PG&A, totaled $197 million, up +15% compared to the second quarter of 2018, driven by strength in Indian sales, particularly the new FTR1200 motorcycle, which began shipping globally in the second quarter, offset by declines in Slingshot sales. Gross profit for the second quarter of 2019 was $27m compared to $25m in the second quarter of 2018. The increase in gross profit was primarily the result of higher volume mostly offset by increased tariff costs.
North American consumer retail sales for the Polaris Indian motorcycles decreased high-single digits percent during the second quarter of 2019 in a weak mid to heavyweight two-wheel motorcycle industry that was down low double digits percent. Indian outperformed the market with modest market share gains in North America during the quarter, driven by retail sales of its new mid-size bike, the race-inspired FTR1200, which has experienced strong initial demand both in North America and internationally.
North American consumer retail sales for Polaris' motorcycles segment, including both Indian Motorcycles and Slingshot, decreased mid-teens percent during the second quarter of 2019, while the North American motorcycle industry retail sales for mid to heavyweight motorcycles, including three-wheel vehicles, was down mid-single digits percent in the second quarter of 2019.

"Our second quarter results reflect the deft leadership and disciplined execution of our Polaris team. We worked diligently to overcome the impacts of tariffs, a very wet spring and an aggressive promotional environment, delivering financial results slightly favorable to expectations, but trailing our long-term performance goals," said Scott Wine, Chairman and Chief Executive Officer of Polaris Industries Inc.
"The strength of our industry-leading brands and vehicles enabled us to gain share in Indian Motorcycles and drive growth in Side-by-Sides with RANGER and RZR, although our decision to assume price leadership did impact volume, specifically in our lower margin youth and value segments.
"We are encouraged by our market share gains and year-to-date growth in Boats, as well as the continued improvement at TAP, where retail store sales growth was up nicely. Our operational and dealer fundamentals are in good shape as we head into the critically important model year 2020 product introductions, and we anticipate improved retail performance during the second half of the year."
Polaris has reported second quarter 2019 net income of $88m, or $1.42 per diluted share, compared with net income of $93m, or $1.43 per diluted share, for the 2018 second quarter. Adjusted net income for the quarter ended June 30, 2019 was $107m, or $1.73 per diluted share compared to $115m, or $1.77 per diluted share, in the 2018 second quarter.
Gross profit increased +13% to $436m for the second quarter of 2019 from $385m in the second quarter of 2018. Reported gross profit margin was 24.5% of sales for the second quarter of 2019 compared to 25.6% of sales for the second quarter of 2018. Gross profit for the second quarter of 2019 includes the negative impact of $7m of restructuring and realignment costs. Excluding these costs, second quarter 2019 adjusted gross profit was $443m, or 24.9% of adjusted sales. 

Scott Wine, Chairman and Chief Executive Officer of Polaris Industries Inc.

For the second quarter of 2018 adjusted gross profit of $390m, or 25.9% of adjusted sales, excludes the negative impact of $6m of restructuring and realignment costs. Gross profit margins on an adjusted basis were down 104 basis points, reflecting tariff costs and the addition of Boats, which has a lower gross profit margin, partially offset by increased productivity and higher average selling prices.
Operating expenses increased +13% for the second quarter of 2019 to $321m, or 18.0% of sales, from $284m, or 18.9% of sales, in the same period in 2018. Operating expenses in dollars increased primarily due to the Boat Holdings acquisition completed during the third quarter of 2018 and investments in strategic projects. Operating expenses as a percentage of sales improved as the Boat segment has a lower operating expense to sales ratio compared to the legacy Polaris business.
Dealer inventory was up +1% year-over-year for the second quarter 2019, slightly below targeted inventory levels. Polaris narrowed its full year 2019 earnings guidance by maintaining the upper end of the net income range and increasing the lower end of the range and now expects earnings to be in the $6.10 to $6.30 per diluted share range, which takes into account the China 301 list 3 tariff increasing from 10% to 25%. Full year 2019 adjusted sales growth guidance was also narrowed to +12% to +13% over the prior year.
Income from financial services was $20m for the second quarter of 2019, down -7% compared with $21m for the second quarter of 2018. The decrease is primarily attributable to lower retail sales and lower penetration rates during the quarter.
Off-Road Vehicles ("ORV") and Snowmobiles segment sales, including PG&A, totaled $1,049m for the second quarter of 2019, up six percent over $991m for the second quarter of 2018 driven by increased average selling prices, particularly in Side-by-Sides, and growth in PG&A. PG&A sales for ORV and Snowmobiles combined increased nine percent in the second quarter of 2019 compared to the second quarter last year. Gross profit increased five percent to $313m in the second quarter of 2019, compared to $297m in the second quarter of 2018. Gross profit percentage declined 20 basis points during the quarter as higher average selling prices and increased productivity were more than offset by higher promotions and tariff costs.
ORV wholegood sales for the second quarter of 2019 increased 4 percent primarily driven by increased average selling prices. Polaris North American ORV retail sales decreased low-single digits percent for the quarter with Side-by-Side vehicles up low-single digits percent and ATV vehicles down high-single digits percent. Shipment unit volume was down during the quarter, in-line with retail sales declines as the Company's retail flow management process (RFM) performed as designed. The North American ORV industry was up high-single digits percent compared to the second quarter last year, partly driven by new competitive product not in the market a year ago.
Snowmobile wholegood sales in the second quarter of 2019 were $16m compared to $4m in the second quarter last year. Snowmobile sales in the Company's second quarter are routinely low as it is the off-season for snowmobile retail sales and shipments.
Global Adjacent Markets segment sales, including PG&A, increased seven percent to $122m in the 2019 second quarter compared to $113m in the 2018 second quarter. Gross profit increased 21% to $34m or 27.8% of sales in the second quarter of 2019, compared to $28m or 24.8% of sales in the second quarter of 2018, due to increased volume and favorable product mix.
Aftermarket segment sales of $229m in the 2019 second quarter increased one percent compared to $227m in the 2018 second quarter. TAP sales in the second quarter of 2019 were $210m, which was flat compared to the second quarter of 2018. The Company's other aftermarket brands increased sales by 12%. Gross profit decreased to $55m in the second quarter of 2019, compared to $58m in the second quarter of 2018 due to higher tariff costs.
Boats segment sales, which consist of the Boat Holdings acquisition which closed July 2, 2018, were $182m in the 2019 second quarter. Gross profit was $40m or 22.2% of sales in the second quarter of 2019.
Parts, Garments and Accessories ("PG&A") sales increased +10% for the 2019 second quarter, primarily driven by growth across the Company's segments.
International sales to customers outside of North America, including PG&A, totaled $231m for the second quarter of 2019, up +13% from the same period in 2018. The increase in sales is primarily attributable to growth in Indian Motorcycles and Global Adjacent Markets.
For the full year 2019, the Company is narrowing its earnings guidance range by increasing the lower end to $6.10 per diluted share and maintaining the upper end at $6.30 per diluted share, including the impact of the China 301 list 3 tariff rate increasing from 10% to 25% effective May 2019, and the benefit of the Company's tariff mitigation actions. The Company is also narrowing its full year 2019 sales guidance range and now expects sales to grow in the range of 12% to 13% compared to the prior year given only six months remain to year-end.

News Briefs

 

The Q1 ACEM registration statistics for the 28 member states of the EU show that, especially given the hype and the level of investment going into electric mobility, the levels of market take-up are still, actually, "shockingly" low. In Q1 only 13,553 electric motorcycles and mopeds were registered, only 2,295 of which were motorcycles. The largest market was France (4,307 units), followed by the Netherlands (2,598), Belgium (2,533), Spain (1,589) and Italy (766); France was also the largest market for electric motorcycles (581 units), followed by Germany (504), Spain (502), Italy (245), the Netherlands (150) and Austria (116).

Led by shops in Austria, Switzerland and Germany, calls are growing in Europe for the formation of an independent motorcycle dealer association. At present the only opportunities for dealers to organize are through their OE dealer groups. The mood music among over 100 dealers who attended the February meeting of the Austrian trade association's meeting was that up to a third of dealers could be facing threats to their existence.

 

In May Polaris CEO Scott Wine said that the Administration's proposed 25% tariff on imported Chinese componentry would be "downright catastrophic in terms of its impact on the company and employees" claiming that they could cost the company a third of its net income. Meanwhile, at time of press, it was still unclear whether or not the EU plan for a massive retaliatory tariff attack on U.S. made motorcycle component exports to Europe was still on the cards or not.

The Motorcycle Industry Council (MIC) in the United States has re-elected well known motorcycle advocate Paul Vitrano of Indian Motorcycle/Polaris Industries as its chairperson, Chuck Boderman of Honda as vice chair and Jim Woodruff of National Powersport Auctions as secretary/treasurer. The 12 directors also retained/elected Tim Buche as MIC President and CEO. Buche has served as the leader of the MIC’s staff since 1996. Jeff Brown of EagleRider motorcycle rentals and Tim Calhoun of Helmet House were recently elected new members of the board. Established in 1914, the MIC HQ is in Irvine, CA., with a government relations office in Washington, D.C.

 

BMW has announced that it produced its 3 millionth motorcycle at the Spandau, Berlin factory in April this year - a S 1000R. The facility, which has 2,100 employees, started producing motorcycle components in 1939. BMW switched complete production of all bikes there in 1969. One million motorcycles have been produced there since 2011. BMW also has motorcycle production facilities in Brazil, Thailand, China and India.

While recent research suggests that 47% of consumers in the Netherlands would consider switching to some form of Electric Mobility for commuting in the future ('Pedelecs' mostly), such survey findings are still decades away from getting the showroom doors swinging. Market acceptance is especially soft in the major markets - some 39% would do so in Spain, 33% in Italy, but only 21% in Germany, 15% in France and as few as 11% in the UK.

According to International Dealer News (IDN), motorcycle registrations for the 'Big Five' largest motorcycle markets in the 28 nation EU accounted for 84.2% (206,386 units) of the total number for Q1 (244,991 units). The next largest markets with over 1,000 units registered were, in descending order, Belgium (6,519), Portugal, Greece, Austria, the Netherlands, Czech Republic, Sweden and Poland (1,356).

Harley-Davidson EVO, Hop-Up & Rebuild Manual

Keeping Those Evos Running

Written by Chris Maida, who put in nearly 20 years as editor for American Iron Magazine, with help from the crew at Manchester, New Hampshire based performance specialists R&R Cycles, this book shows the reader not what to build, but how to build a "rockin’ Evo-style engine."
Publisher Tim Remus says: "The Harley-Davidson EVO, Hop-Up & Rebuild Manual is a must-have for anyone who wants to put a wrench to an Evo - each section covers a specific sub-assembly of an Evo motor. The reader can pick and choose what chapters they need at the time, be it installing a new camshaft or installing a top-end kit.
"For anyone planning to build an Evo that combines power with durability, this book provides detailed photo sequences that show every part of the building or rebuilding process. The crew at R&R Cycles shows how to assemble the bottom end, gearcase, cylinders and pistons and cylinder heads.
"If you're a rider or shop owner looking to do more work on the Evo V-Twin, this is the book you need. From a simple rebuild to a complete scratch-build, the how-to information and photo sequences you need are right here."
At 144 pages with 300+ photos and published by Wolfgang Publications (WolfPub), the "Harley-Davidson EVO Hop-Up & Rebuild Manual" (ISBN, 9781941064337) retails in the United States for $29.95.
www.wolfpub.com

Le Pera

'Cherokee' for Softails

The 'Cherokee' from noted Californian seat manufacturer Le Pera has "a pure bobbed and chopped throw-back style with King/Queen lines and awesome back support." According to design guru Bob Le Pera Jr, "this seat offers your Softail customer timeless style and comfort for the hard miles on full day trips."

It features 11.5" of rider seating area and 7" for the passenger. Standard options include smooth, diamond and pleated stitch patterns, and it fits '84-'17 Softails.
Still handcrafting all its seats at their North Hollywood, California headquarters after 47 years as the market's design leader, all Le Pera seats feature a powder-coated steel base plate, a specially poured high density "Marathon" molded foam foundation and double-stitched, handcrafted cover with bonded polyester thread for durability.
Stitching choices and additional options such as Biker Gel, leather seating and full leather are all detailed in the 2019 Le Pera catalog which is available online - printed copies are available to dealers by request.

LE PERA ENTERPRISES
www.lepera.com

Avon Tyres

Dominic Clifford is New Global Motorcycle Sales Manager for Avon Tyres

Avon Tyres, the Melksham, UK based custom tire subsidiary of Cooper Tire & Rubber Company Europe Ltd., has announced Dominic Clifford as new Global Avon Motorcycle Sales Manager, responsible for worldwide sales, reporting to Jaap van Wessum, GM EMEA, Cooper Tire Europe. 

Clifford joins Cooper after eight years with Goodyear Dunlop Tyres Ltd., where he was responsible for motorcycle and motorsports tire sales for the U.K. and Ireland.  Earlier in his career, Clifford was employed for nine years by Triumph Motorcycles with responsibility for their global motorcycle accessory business unit.
Clifford is an avid motorcyclist who in recent years participated in the Tuareg Rally, a seven-day race in Africa, and the seven-day Hellas Rally in Greece. He is a regular competitor in two of the largest events in UK motorcycle racing - the Weston Beach race and Welsh two-day Enduro.
www.avonmotorcycle.com

Drag Specialties

Drag Specialties Additions

Predator III

 
The seat area of the Drag Seats Predator III driver's seat has a 7" tall support and is designed narrower at the front for better leg clearance. A molded polyurethane foam interior provides maximum comfort, a thermoformed ABS seat base gives the perfect fit, while the carpeted bottom and rubber bumpers protect paint. Seat covers are automotive-grade vinyl and available in smooth or double-diamond stitch with black, silver or red thread. Available for '18-'19 FLHC/FLHCS/FLSL and FLDE models.

Fork Boots

Drag Specialties now offers fork boots in a variety of sizes to help minimize damage, with durable, high quality rubber protecting the forks. They fit 39 mm, 41 mm and 49 mm diameter tubes and come in sizes ranging from 5" to 9" long.  Easily installed, they are sold in pairs with a set of zip ties included.

Saddlebag Guards/Support Kits

For '09-'13 FLHX/FLTR model saddlebags, these Drag Specialties saddlebag guards and support kits feature 7/8" guards and under-saddlebag supports.  With all hardware is included, kits are available in chrome or gloss black finishes.

5" Programmable Electric Speedometers

These 5" speedometers are plug-n-play ready with programmable speed display. Warning lights and low-fuel light functions can also be displayed if previously programmed on the OEM speedometer. The odometer can also display the mileage from the previous speedometer. Faces are available in black or white with readouts in either mp/h or km/h. They fit '04-'13 FLHR, FLXST/FLST and FXDWG models.

Battery Cable Kits

 
Drag Specialties battery cable kits are now available for '65-'92 Dresser, '84-'88 Softail and '82-'88 FXR models. These kits contain all the cables necessary for OEM cable replacement. Manufactured with pure electrolytic-grade, 36-gauge tinned copper strands for flexibility without sacrificing current transfer; engineered for maximum current boost to the starter motor.

DRAG SPECIALTIES
www.dragspecialties.com

Deltran

Battery Tender Li-ion with BMS and Activation Switch

Available exclusively in the United States through Parts Unlimited and Drag Specialties, Florida based Deltran's new Battery Tender brand next generation Lithium batteries are said to be "safer, smarter, lighter weight and deliver longer battery life," according to Clinton Green, VP Sales for North America.

"The advantages of Lithium-ion batteries are immense," says Clinton. "Increased fuel economy, a constant current compared to the variable current you can get from AGM batteries, up to four times longer battery life and a 99% more efficient charge and up to two times lighter than the equivalent conventional battery are just some of the most obvious advantages."
Features of the Battery Tender Lithium include quad terminals providing for accessory hook-up options; Smart Battery Management System (BMS) that monitors, optimizes and protects the battery; a battery activation wire that connects the battery activation switch to the BMS; a fireproof coating for thermal protection - an engineered mechanism that supports high current flow during voltage discharge - and an IP67 water and dust resistant bottom case with high melting point.

The BMS detects possible overcharge or discharge and will shut off the battery to prevent permanent battery damage; the user can reactivate the Lithium battery by pressing the battery activation switch on the quick disconnect cable to allow the battery to be charged again - with a Battery Tender Lithium-specific charger. The quick disconnect cable has three terminals - one to positive, one to negative and the third to the battery activation switch.

DELTRAN USA, LLC
www.batterytender.com

Slamtail

'Slamtail' Mono Shock Lowering Kit for M-8 Softails

Back in 2015 AMD Magazine featured an all new rear suspension lowering system for all Twin Cam Softail Harley-Davidson motorcycles from 1999. 

 
Called 'Slamtail', it is designed and manufactured in Australia. The brainchild of ex-Formula 1 senior suspension design engineer Ken Rutherford (who numbers the Benetton F1 team among his  impressive credentials), Rutherford says that on returning to Australia after his F1 career "an old friend and mentor asked me what I was going to do and mentioned that the Harley-Davidson Softail suspension design offered an opportunity for me and my skill set, and suggested I have a good look at it and see if I could enhance it."
Well, the results were an internationally respected alternative to the conventional "airbag" type kits in which 'Hydraulic Rams' were used. Slamtail reused Harley's OEM spring and shock units, rather than scrapping them, therefore offering better value than some other systems, with the original ride quality retained and no change to damping and spring rates. 

Vice-mounted spring compressor assembly for 'Slamtail' fitment, or any work required on the M-8 Softail mono shock assembly

'Slamtail' mono shock ram shown at lowest height

Softail shown at maximum lowered height - the mechanical limit on the replacement polyurethane bump-stop

With the eventual demise and replacement of the Twin Cam chassis/engine combo in MY 2017, Harley has engineered a new mono shock rear suspension platform with the M-8 Softail. In response, Slamtail has developed a new rear suspension lowering system for the M-8 mono shock Softail range for wide and standard frames.
With the system fully raised, the ride quality and suspension travel is the same as the OEM original, and the system re-uses the OEM Showa shock unit, replacing the OEM coil spring with a bespoke high-stress steel tapered wire coil spring with a progressive rate. The Slamtail-equipped bike can be ridden at any height whilst still retaining the stock ride comfort.
The new system lowers the ride from stock height to an absolute minimum, with supplied polyurethane bump-stop installed. An additional 10 mm of preload adjustment is available for specific rider/pillion demands.

ST5 'Slamtail' mono shock assembly

Side stand mounting clevis for lowered suspension

Power unit installed behind transmission

ST5 mono shock system handlebar-mounted key-fob

Among the changes in ownership and riding experience expectations that have matured in the past few years, the trend is for rider 'creature comforts', and the new 'Slamtail' mono shock Softail upgrade is 'right there' with advanced features such as ride height control via key-fob or cylinder head mounted on-board toggle switch.
The standard kit includes the hydraulic power unit, mono shock hydraulic ram, on-board toggle switch, two remote control key-fobs, new polyurethane bump-stop (to replace the OEM bump-stop) and a ‘C’ spanner for manual static coil spring preload adjustment.
A new side stand mounting clevis is also included in the standard 'Slamtail' kit, for use with any aftermarket lowered M-8 Softail (including all air systems). It replaces the OEM side stand clevis, and allows the bike to be safely lowered without falling over.
Optional kit extras include handlebar-mounted key-fob bracket and dummy preload adjuster knob to replace the original preload adjuster knob, filling the hole left in the RHS side cover left by the adjuster knob.

SLAMTAIL SUSPENSION
www.slamtail.com

Baker Drivetrain

Baker ‘Armored Attitude’ Chain Adjuster

Said to be stronger than the original (for more abusive riding!) Baker Drivetrain’s ‘Armored Attitude’ chain adjuster design is said to prevent damage to the motorcycle’s motor case bearings, inner primary bearings, clutch hub bearings and transmission output gear bearings.

“The issue with the stock auto chain tensioner is when the chain has any slack in it, the auto tensioner ratchets the shoe up another notch. One notch is not going to be an issue, but the tightening continues until it causes problems in other places,” says Drivetrain Meister Bert Baker.
“With our manual chain adjuster, you control the tightening of the chain so no unwanted damage occurs.” It fits 2007 and later Softail and Touring models, and 2006 and later Dyna models.
“Our manual chain tensioner allows you to set the chain to the proper 5/8”-7/8” (cold) freeplay, and never have to worry about it being too tight. The upgrade support kit includes a support plate, hardware, shoe and a shoe keeper.”
The chain shoe is machined from Nylon 66; the active plate and back support plate are made from investment cast with 4130 steel, and it has 28% finer teeth spacing (compared to ‘01-‘06 chain adjusters) for more accurate adjustments - the chain adjustment method is the same as the ‘01-06 style stock ‘L’Bracket’ adjusters.
Baker says that the ‘Armored Attitude’ adjuster will increase torque by +3.42 ft/lbs, reduce primary noise, help prevent damage to the primary and improve motor bottom end and inner primary race bearing durability, and advises that you should “check the primary chain tension at the 500-mile interval and then after every 5000 miles.  If the chain cannot be adjusted properly, then replace the chain.” Available in chrome, polished, raw or wrinkle black.

BAKER DRIVETRAIN
www.bakerdrivetrain.com

Custom Dynamics

Turn Signal Eliminator Kit for H-D Touring

Award winning Youngsville, North Carolina based Custom Dynamics has designed this direct bolt-on turn signal eliminator kit to "clean up the rear fender" on H-D Touring models - replacing the stock OEM turn signal bar for a "sleeker, more custom look."
Made from lightweight aluminum, the radius license plate mount eliminates the stock rear turn signals completely and is offered in a chrome or gloss black finish. The illuminated radius license plate frame is included in the kit, which provides license plate illumination with six built-in white LEDs and a simple two wire hook up (backed by the Custom Dynamics lifetime LED warranty).
Matching chrome or gloss black mounting hardware is included for a seamless installation. They are currently available for '97-'13 Electra Glide, Ultra Limited and Road Glide Ultra (including CVO), '97-'19 Road King, Road King Classic and Road King Special, '14-'15 FLHTKSE, '15 FLTRUSE, '06-'19 Street Glide, Street Glide Special and '99-'19 Road Glide and  Road Glide Special. Taillights are sold separately.

CUSTOM DYNAMICS LLC
www.customdynamics.com

Harley-Davidson

Harley Q2 U.S. Sales -8.5%, International sales -8.9%; Thailand EU Softail/XL Production Delayed to October

Harley-Davidson worldwide retail sales decreased -8.4% in the second quarter, while U.S. retail sales were down -8.0% in the quarter driven largely by continued weak industry sales with international retail sales down -8.9%.
The U.S. 601+ cc industry was down -4.9% in the second quarter compared to the same period in 2018. Harley-Davidson's second quarter U.S. market share was 46.6%. Harley-Davidson's year-to-date Europe market share was 8.8% through June.
"In the second quarter we achieved significant advancements under our 'More Roads' plan and we continued to lay a solid foundation for future growth," said Matt Levatich, President and Chief Executive Officer, Harley-Davidson, Inc. "The decisions and investments we're making, within a highly dynamic and competitive global marketplace, demonstrate our intense focus to build the next generation of riders and maximize shareholder value."

Harley-Davidson says it continues to inspire diverse, new riders around the globe. Harley-Davidson ridership in the U.S. has been up each year since 2001 and was at an all-time high of over 3 million riders in 2018. The company increased its reach and impact in the second quarter and delivered more, younger riders - U.S. rider training participation was up, with the greatest increase among 18-34 year-olds.
Of total U.S. new retail sales in Q2, the mix of 18-34 year-olds was up +2.7%. Emerging market year-over-year retail sales growth of +7.6% was aided by more accessible pricing from local manufacturing in Thailand.
In which connection, European Union regulatory approval for Thai production to qualify for tariff relief was delayed, with production of European destined Softails and Sportsters now slated to start in October this year. Tariff relief approval has now been received by Harley, meaning that the units shipped to Europe from Harley's Thailand plant will be at the standard WTO 6% rate rather than the punitive increase to 31% on domestic U.S. produced models imposed by the European Union a year ago.
Non Trike Touring model tariff relief is expected to be approved later in 2019. Without the agreed exemptions and ramp up of production in Thailand, U.S. built Harley inventory could have otherwise been facing even higher tariffs in the future - a ramp-up to around 56% is slated for 2021 under current plans.
As a result of the timing of these approvals and softer than expected European retail sales as key drivers, the company has adjusted its 2019 outlook and now expects motorcycle shipments to be approximately 212,000 to 217,000 for the full year. In the third quarter, the company expects to ship approximately 43,000 to 48,000 motorcycles
Harley-Davidson's strategic objectives through 2027 are to build 2 million new riders in the U.S., grow international business to 50% of annual volume, launch 100 new high impact motorcycles and do so profitably and sustainably.
The 'More Roads to Harley-Davidson' accelerated plan for growth drives the company's strategy to deliver sustainable growth and build the next generation of riders by delivering exciting products in existing and new spaces, broader access to Harley-Davidson and an optimized customer experience through an even stronger dealer network. The company plans to maintain its investment and return profile and capital allocation strategy, while it funds strategic opportunities expected to drive revenue growth and expand operating margin through 2022.

During the second quarter, Harley announced a collaboration with China's Qianjiang Motorcycle Company Limited [manufacturer of Benelli branded motorcycles and a subsidiary of Volvo owner Geely] to launch a smaller, more accessible Harley-Davidson motorcycle planned for China in 2020, with additional Asian markets to follow. This move is intended to expand access to the Harley-Davidson brand to more riders in Asia. During the second quarter, the company's efforts to increase access in emerging Asian markets, including through its Thailand manufacturing strategy, drove sales increases of +77% in its ASEAN (Association of Southeast Asian Nations) markets.
Harley-Davidson retail sales in China grew +27 percent in 2018 compared to 2017. The new motorcycle will be designed by Harley, but production, including the engine, will be at a Qianjiang facility in China. Despite the trend to larger engines in China, the 125 cc up to 400 cc displacement market sector that Harley's 338 cc model will sell into in China is said to be worth some 2m plus units a year.
Harley-Davidson says it has also strengthened its leadership in the electrification of motorcycling. Company and dealer preparations continued for the targeted September retail delivery of LiveWire, the company's first electric motorcycle. Harley-Davidson's commitment includes helping to enable a strong global charging network. Dealers are installing public DC fast charging stations and the company is working with global partners to support charging infrastructure development.
"There are more riders on Harleys in the U.S. than at any point in our history, and the number of young riders continues to grow.  The strength of the Harley-Davidson brand, and the bare knuckle grit of this company and our global dealers, will continue to be leveraged and sharpened to make riding matter to more people," said Levatich.
Key milestones of the company's multi-year manufacturing optimization initiative, designed to further improve its manufacturing operations and cost structure, were completed during the quarter. Starting in the first quarter of 2018 the company began work to close its wheel manufacturing facility in Australia and consolidate its motorcycle assembly plant in Kansas City, Mo. into its plant in York, Pa.
Full year savings of $25m to $30m for 2019 and ongoing annual cash savings of $65m to $75m after 2020 are still expected. In the second quarter 2019, costs related to the manufacturing optimization were $14.4m. For the full year, the company now expects to incur $40m to $50m of operating expense for this initiative, $10m less than previously expected.
Revenue from the Motorcycles segment was down in the second quarter behind lower shipments. Operating income decreased primarily due to lower revenues and increased tariff costs, partially offset by lower SG&A costs. Financial Services segment second quarter operating income of $75.5m was down -6.2%.
Second quarter 2019 GAAP diluted EPS was $1.23. Year-ago GAAP diluted EPS was $1.45. Excluding restructuring plan costs and the impact of incremental tariffs, second quarter 2019 diluted EPS was $1.46 compared to $1.52 in the second quarter of 2018. Second quarter 2019 net income was $195.6m on consolidated revenue of $1.63 billion versus net income of $242.3m on consolidated revenue of $1.71bn in 2018.
On a discretionary basis, Harley-Davidson repurchased 1.2 million shares of its common stock during the quarter for $42.9m. During the quarter, there were approximately 159.4 million weighted-average diluted common shares outstanding. At the end of the quarter, 13.7 million shares remained on a board-approved share repurchase authorization.

Motorcycle Industry Council (MIC)

Tim Buche To Step Down as MIC CEO - Accepts Consultancy Role

Tim Buche, the near 25-year veteran CEO of the Motorcycle Industry Council (MIC), is to step down from his position to take up an institutional memory-preserving consultancy role effective November 1st.
In a succession plan that has been 18 months in the making, he will be replaced by Erik Pritchard, currently President of two of the resource-share associations that are co-located with the MIC at Irvine, California - the Specialty Vehicle Institute of America (SVIA), the Motorcycle Safety Foundation (MSF), and the Recreational Off-Highway Vehicle Association of America (ROHVA).

Buche is currently CEO for all the associations and President of MSF and the MIC; Pritchard, currently President of SVIA and ROHVA and general counsel for all four associations, has been selected by the respective boards to be Chief Executive Officer and President of all four associations effective Nov. 1, 2019.  A formal announcement about Pritchard's new role is slated for release in the fall.
"Even though I have the same passion for the success of all our respective association members as I did when I assumed this role nearly 25 years ago, this succession has been planned for several years to ensure an orderly transition.  I'm excited to continue serving the associations in a new way as a consultant," Buche said.  "Erik has proven to be an effective leader since he joined us in 2014 and assumed the presidency of SVIA and ROHVA two years ago.  With exciting new initiatives under way at the associations, Erik is the right leader to work with staff to continually improve to achieve strategic plans and priorities."
Since joining the MIC, MSF and SVIA as President in September 1996 and for the newly formed ROHVA in 2008, Buche has worked with the respective boards to set a course of improved services to their respective members to help them grow and manage their businesses, including enhanced market research and government relations and market development initiatives.  

Some of these efforts include the acquisition by the MIC of AIMExpo, "the premier and only trade and consumer powersports trade show in the United States"; the annual 'Capitol Fly-In', the premier legislative advocacy event of the year for members; and the annual Communications Symposium, now entering its 21st year and always filled to capacity with members who hear and learn from elite financial, brand and research experts. 
Buche spearheaded the renowned MSF 100 Motorcyclists Naturalistic Research study with Virginia Tech Transportation Institute, and he has been a frequent advocate and speaker on behalf of on- and off-highway enthusiasts.
"Tim has worked tirelessly since his very first day to make each of the associations the pillar of their respective industries, and on behalf of the MIC board we will be forever grateful for his commitment to excellence," said Paul Vitrano, MIC board chair and senior assistant general counsel at Indian Motorcycle and Polaris Industries. 
"He has been sharply focused on advancing the needs of our members and fellow riders to the highest levels of government and with blue ribbon research institutions, and all our members have greatly benefited from his leadership and dedication."
AMD would like to congratulate Tim Buche on his years of dedicated service to the motorcycle industry and acknowledge the excellent contribution he has made to defending and promoting the interests of our industry. We here at AMD have had the pleasure of seeing Tim representing the interests of the United States motorcycle industry domestically and on the wider international stage where he has garnered considerable prestige and effective influence for the MIC and the other associations. He has been a model of professionalism, and always shown an instinctive understanding and grasp of the issues with an integrity that has allowed him to produce results. He has always listened carefully to perspectives and shown great patience and courtesy with many irascible individuals at times of pressure - not least with this author!

News Briefs

Indian conglomerate Mahindra's first new model in their Classic Legends Pvt Ltd BSA relaunch for the Indian market (initially?) is being branded as a BSA Gold Star. It will feature an engine made in Austria by BRP owned Rotax - an updated version of the 652 cc single as supplied to Aprilia for the 650 Pegaso and BMW F650 Funduro. This follows Mahindra's relaunch of the once massively popular in India Jawa brand in 2018.

 

Bonnier Corp. has announced that after more than 100 years it has managed to drive its already reduced to six editions a year Motorcyclist Magazine out of print and into entirely online future. Hey ho!

Eicher Motors Ltd (EML) of India, owner of Royal Enfield and a former Polaris JV partner (the Multix personal utility vehicle, 2015 - 2018), has announced Vinod K. Dasari as the CEO of RE with a seat on the EML board. Dasari takes over from Siddhartha Lal, who was named CEO of Royal Enfield in 2001. Lal will continue as Managing Director of Eicher Motors Ltd. At Royal Enfield, Siddhartha, who has masterminded their entry into the 650 twins market in Europe and USA, will continue to support Vinod and the team on RE product and brand related areas. Dasari has served time at Ashok Leyland, Cummins India, Timken and General Electric. Dasari holds a Master's degree in Engineering Management from McCormick, an MBA from the Kellogg School of Management and a Bachelor’s degree in Engineering from the University of Louisville; he has also served as the President of the Society of Indian Automobile Manufacturers (SIAM).

The latest ACEM statistics put total Q1 2019 motorcycle registrations for the (currently!) 28 EU member states at 244,991 units, which is +19.2% over Q1 2018. Italy was the largest market at 54,826 units (+18.7%), followed by Germany (44,450, +23.3%), France (43,942, +20.0%), Spain (37,255, +20.5%) and the UK (25,913, +10.3%).

 
Lane Splitter H-D in San Jose, California, has been sold by Jeffrey Soffer to become the 6th Harley store owned by Rich Gargano and Cliff Chester; it will be rebranded as San Jose H-D. Soffer also owns Stinger H-D in Medina, Ohio, and Alligator Alley H-D in Sunrise, Florida. Soffer is best known as a major league real estate developer in Miami. Gargano and Chester own multiple Harley dealerships, secondary retail locations and alternative retail outlets in California. The deal was masterminded by George Chaconas' Performance Brokerage Services. Chester also owns Gold Rush H-D, Elko, NV., Oil City H-D, Casper, WY. and Snake H-D in Twin Falls, Idaho.

 

Ducati won first place in the 'Concept Bikes: New Design and Prototypes by Manufacturers and Independents' category at the Concorso d'Eleganza Villa d'Este in Italy in May. They did so with the original and still much admired Hypermotard 950 Concept designed by Ducati's own Central Styling unit. This follows the Red Dot Award recently won by the Diavel 1260. First staged on the shores of Lake Como in 1929, the event is organized by BMW Group jointly with the Villa d'Este hotel.

New motorcycle registrations in Germany for the YTD May were +8.551% at 63,719 units - the best first four months seen there since before 2009. The top selling model there YTD remains the BMW R 1250 GS (6,229 units), way ahead of the Yamaha MT-07 in second place (1,815 units). With now having seven models among the top 30 best sellers, it is no surprise that BMW has stretched its home market dominance still further, having sold 16,280 units in total YTD for a commanding 18.55 percent market share (up by +19.46 percent compared to the first two months of 2018

Record-breaking racer Zef Eisenberg survived a 195 mph scare to establish a new record for the Flying Mile at Pendine Sands in South Wales. Riding a specially made 400 bhp supercharged Suzuki Hayabusa that was built and prepared by Eisenberg’s MADMAX Racing Team, he set a two-way average of 182.40 mph on Saturday 6 April. The Flying Mile record was set by Sir Malcolm Campbell in 1927 at 174 mph in the famous Blue Bird car. Eisenberg raised that to 182.49 mph in a two-way average Flying Mile measurement that could have been higher if the engine had not blown up at a GPS recorded speed of 195 mph-plus.

BMW Motorrad increased deliveries of its motorcycles and maxi-scooters by 7.7% to 38,606 units (2018: 35,858 units) in the United States, setting a new Q1 record for the eighth year in succession. Revenues grew by +11.8% to € 586 million (2018: € 524 million). EBIT also improved significantly, rising to € 89 million for the three-month period under report (2018: € 77 million; +15.6%). The first-quarter EBIT margin came in at 15.2% (2018: 14.7%).

KTM increased its European market share to 12.3% in Q1 2019 with a registration increase of +22%, seeing growth in major markets such as Germany (+29%), France (+34%) and Spain (+20%). They were also up +30% in India. Contrary to initial estimates, the retail motorcycle market in Europe grew by around +20% in the first quarter.

Sources: AMD, IDN, FT, Reuters, PSB, MPN, B&B, BDN, MCN, AP, Bloomberg, MNW

Brooks

60 years of the Brooks Black Leather Jacket

Plymouth, Massachusetts based Brooks Leather Sportswear is celebrating its 60 years in the powersports industry with the anniversary of the "iconic" Brooks jacket - one the company says has created "an enduring legacy in the world of motorcycling, film, and popular culture."
From the first style PJ27 in 1959 until today, Brooks leather jackets are made in USA with the same quality and traditional 'old school' styling. "Brooks jackets are forever," says CEO Jamie Goodson, "and passed down from father to son, or daughter - riders appreciate the heritage and tradition of a genuine Brooks."
www.brooksleather.com

Tecmate

Four-Bank Chargers - "Keeping batteries fresh and ready "

Co-branded by Drag Specialties, Moose, Honda and Triumph, the OptiMate 3 is described as TecMate's most trusted charger in powersport.
"This charger has saved many thousands, if not millions, of batteries over the years with its unique save mode that brings a sulphated battery back from as low as 2 volts and its unique 24-7 long-term maintenance program that keeps that saved battery ready to fire up the engine of the powersport vehicle it is in." 

OptiMate Lithium 4s 0.8A four-bank

This same charger is available as a dual bank (OptiMate 3 x 2) and four-bank (OptiMate 3 x 4), ideal for dealers and workshops, and a fact that American Honda has recognized by approving the OptiMate 3 x 4 for new battery preparation.
Ideal for 12V AGM, GEL and STD lead-acid batteries, the seven-step program on the 3 x 4 can save dead flat 12V batteries from as low as 2 volts or automatically bring a new battery to full charge "within hours."
For high performance 12.8V/13.2V 4-series Lithium Ferrous Phosphate (LFP/LiFe) batteries, the OptiMate Lithium 4s 0.8A x 4, derived from the highly regarded OptiMate Lithium 4s 0.8A, is globally recommended by Yamaha and Kawasaki. "Each station's nine-step program can save a flat battery from as low as 0.5 volts or automatically bring a new battery to full charge - including batteries with a built-in sleep mode that needs waking before receiving charge.   

OptiMate 3 four-bank

"Preparing or servicing batteries could not be easier with any of the OptiMate four-bank fully automatic battery chargers," says TecMate CEO Martin Human. "The integrated wall mounts allow for perfect positioning above the battery service area. The rest is easy.
"Simply connect the batteries and each charge bank's smart program does the rest automatically, from activating a new battery for service or saving a flat battery a customer may have returned.
"Keeping new batteries fresh and ready for sale is a snap. The OptiMate 24-7 maintenance program guarantees that each new battery leaves the dealership fully charged and healthy. With OptiMate four-station chargers, it is truly as simple as connect and forget, no more battery problems.
"OptiMate also keeps cost in check for the dealer. A lesser known fact is that all OptiMate battery chargers, including the four-bank models, can accept universal/global power rated between 100Vac to 240Vac. This universal input power conversion system is more efficient and reduces power usage, i.e. OptiMate uses less power than most to charge batteries right. 
"Lower cost to charge batteries, almost no batteries coming back, and those dead flat batteries that do are usually due to customer error, and even those can be fixed by OptiMate - now that's a win-win-win formula for any dealer if there ever was one," says Martin.

TECMATE
www.tecmate.com
www.optimate1.com

Barnett

Barnett TBW Extensions for Baggers

For taller Bagger handlebar installations where the throttle-by-wire (TBW) needs to be extended, Barnett's plug-&-play TBW extensions "make installation easy," according to the Ventura, California based manufacturer.

There are no individual wires to mess with and no soldering or modifications are required. They are available in lengths of 8", 12", 15" and a 20" extension with a bare end for routing through sharp handlebar bends ('08-'15 only).
Available for '08-'15 FLs (except CVO/SE) and all '16-'17 models using throttle by wire.

BARNETT CLUTCHES & CABLES
www.barnettcables.com 

Wild 1

Chubby 1.25" Bagger Low 'Bar

"Combining maximum comfort with attitude, these Chubbys not only make your bagger look badass, but you sit up straight and feel way better when riding," says Nate Schultz. "The bagger low Chubby has a 7" height when mounted on the bike and gives about 13" of pullback while being 34" wide (grip to grip).

"Like all Chubbys they are drilled for internal wiring - they are made with the same double wall construction as all our other Chubbys with 1.25" diameter tubing. We take special care in the manufacturing process to make sure the inside corners are smooth so the electrics doesn't get hung up during installation. They are designed to give a much more comfortable wrist angle than the stock handlebar."
Designed to fit all H-D bagger models, they work with stock cable lengths on 2014 and up baggers and are available in show chrome, Satin black powder coat, gloss black or a raw finish. All Wild 1 products are 100% made in the USA.

WILD 1 INC.
www.wild1inc.com
www.chubbyhandlebars.com

Cometic Gasket

Piston Jet Oil Cooler Gasket

Cometic Gasket has addressed widely reported problems on M-8 Touring and Softail models of the factory oil jet cooler gasket disintegrating, causing oil pressure loss and possibly adding to the piston overheating issues.

Cometic's new aluminum foamette material gasket (C10174) for this application has an aluminum core and nitrile foamette material bonded on both sides, so it will not disintegrate, leak or weep, like a fiber type gasket.
Cometic advises that "when installing these new upgraded gaskets, be sure the self-tapping screws are fully bottomed out to ensure the oil cooler jet is firmly seated against the engine case. This will ensure a leak free installation."
Sold in pairs, Cometic says that installing this gasket can prevent many issues related to oil pressure loss, piston overheating, oil starvation in the piston wrist pin and oil sumping.

COMETIC GASKET INC.
www.cometic.com

Lowbrow Customs

Weld-On Hardtails for 1982-2003 XL

Brunswick, Ohio based Lowbrow Customs' Hardtail frame for 1982-2003 Sportsters is said to offer "an absolutely perfect fit for those builders looking for the classic styling of a rigid frame with an ease of install and at an affordable price."

Celebrating the 15th anniversary of the business he started with brother Kyle, Tyler Malinky says "these hardtail frame sections are a 3 inch stretch and 1 inch drop compared to a stock Sportster. This means axle-to-axle the hard-tailed bike will be 3" longer and have 1" less ground clearance. 

"This is the perfect blend of style and performance. Every aspect of these frames has been engineered for the ultimate in strength and style. They accept the stock rear wheel and axle, and include slick, custom axle adjusters." The frames are 100% professionally TIG welded and made in Cleveland, Ohio, USA.

LOWBROW CUSTOMS
www.lowbrowcustoms.com

Rekluse

Rekluse Introduces Oil Product Line

A division of Wiseco parent company Race Winning Brands (RWB), Boise, Idaho based Rekluse is now offering factory formulated oils to the off-road and V-twin markets. 
"Drawing upon 16 years of innovation and experience with clutches, these new oils have been engineered and tested to ensure they meet Rekluse’s high standards of performance. Rekluse Factory Formulated Oil is the perfect complement to any OEM or aftermarket clutch.
"All three oils are full synthetic and Rekluse Factory Certified for use with Rekluse auto and manual clutch systems. Rekluse National Sales Manager Patrick Koether said that "Our engineering team continuously researched, reviewed, and tested oil products in tandem with Rekluse clutch development.
"By introducing Rekluse Oils, we are delivering proprietary formulas to meet the demands of a broad range of customers, both on- and off-road. We are proud to offer these new oils and we trust enthusiasts will have a great experience when choosing Rekluse Factory Formulated Oil."
These Rekluse oils are said to "deliver improved power transfer through the clutch, smoother shifting and reduced clutch heat for longer clutch life; all are said to meet API SL and JASO-MA2 standards and are Rekluse Factory Certified for optimal clutch performance."
Available as 10W-40 for 4-stroke engines, 20W-50 for 2-stroke transmissions/4-stroke engines and 20W-50 for V-twin primary.

REKLUSE MOTOR SPORTS
www.rekluse.com

Comment by Editor-in-Chief, Robin Bradley

Aftermarket Moto Design

Did you notice? Well, did you? On the front cover of the latest AMD edition? Look closer. Yes, well done - what's with all this Aftermarket Moto Design stuff you may ask? A future with more sales opportunities for you, that's all!
The evolution of the custom market, and of AMD along with it, has been an interesting one. The short version…
We first started to see a broadening away from chopper monoculture in Europe in the 1990s, when customizing evolved from its historic dual foundations of West Coast lowrider imitation and restoration to original and concourse condition. Later in the 1990s, the emergence of the 'Euro Style', as it was known, was born from increasing influence from the so-called 'Metric market' in Europe, and, in particular, of Streetfighter styling migrating from Japanese motorcycle platforms to air-cooled V-twins.
Single-sided swingarms and the 'Fat Rear End Boom' followed. With 'Euro Style' informing the agenda in the domestic U.S. market for the years either side of the Millennium, we saw a morphing of orthodoxy accompanied by a gradual reduction in the influence of 'traditional' custom tribal loyalties as the Boomers started to age out.
Back in the day I wrote long and often about how the chopper and catalog bike market of the noughties was sowing the seeds of its own destruction, just as assuredly as prog rock was killed off by punk. The rush to volume, that at its peak was soaking up in the region of 60,000 aftermarket V-twins, was the 'Hair Metal' of the evolution of the custom market – popular, but ultimately unsatisfying.
 
 OEMs are now the Pilot Fish

The 'Ying' to that 'Yang' was the rush to price-point as the early effects of the mortgage crisis started to make Bobbers hot, and from that point, the rest is history. Long before the concept of 'Alt Moto' was coined, I was referring to the 'New Wave' as a desire, increasingly for "motorcycles of character", for simplicity and for affordability, without compromising individuality, authenticity and, you know, handling and performance.
Emerging 'New Gen' riders didn't want, and do not want, to accept that affordability means a loss of authenticity - and we have now, gloriously, seen the motorcycle industry beginning to respond to "what the customer wants" for some five years now. With the new Royal Enfield 650s representing the thin end of what, within a decade, may well be a very thick wedge of convincing, affordable platforms that perform and handle well, and offer a price-point that can be a start-point, will now capitalize on the fertile ground prepared by R nineTs and Scramblers.
The first AMD World Championship in California in 2004 showcased the emergence, indeed the explosion onto the market, of the 'retro vibe'. By 2009, just as the mortgage crises morphed into the global financial crisis, we were seeing the hegemony of an air-cooled V-twin defined market - choppers and otherwise - give way to diversification and demand for a return to a simpler form of craftsmanship and innovation. In 2009 a 91" Shovel/Evo hybrid by Satya Kraus was a massive pointer to what was to come.
Thereafter, the number of what one would term 'conventional' or 'mainstream' layout Harley V-twin platforms appearing at the 'AMD' has dimished. Ditto aftermarket V-twins.
Since Thunderbike's Ironhard Sportster won the AMD in 2012, the AMD World Championship-winning bike platforms have been a 1971 Moto Guzzi (Ireland), a 1650 cc BMW engine (Belgium), a heavily modified and remachined 1973 Ironhead Sportster (Japan) and last year's Yamaha SR 400 from Russia.
In the meantime, the demand for 'motorcycles of character' that the 'AMD' has showcased has birthed the so-called 'Alt Moto Scene' of cafe racers, bobbers and trackers - just one of the now many niche styles that live happily side-by-side to constitute a concept of motorcycle customizing that now genuinely has no boundaries, one that is now a genuinely 'Freestyle' world in which 'all is good'.
The influence of the entry into the custom market of several of the major OEM manufacturers has done much to spin that evolution, though they would not be channelling resources if that wasn't where a large proportion of their historic customer base had migrated.
There was a time when the aftermarket was viewed as the Pilot Fish of the motorcycle industry, feasting on the morsels the voracious OEMs left in their wake - now that has been completely reversed.
As I have said many, many times, the child has eaten the parent, and what was once niche is now mainstream, and it is aftermarket custom motorcycle design and engineering that is setting the pace and shaping the future of the mainstream market.
I have always believed that good publishers allow their audience to write their agenda and follow taste and demand. In the case of a 'B2B' trade journal such as AMD, we make money by helping our readers to make money. Our job is to serve you up customers - customers who are themselves making their living out of selling custom parts and accessories, improving the performance and handling of their customers' bikes and customizing and building bikes for them.
In the past five years our in-house 'skunk works' has been hard at work preparing the ground for being able to add new dimensions to the business opportunities we represent for the custom market.
Having arrived at a point where the potency of the AMD brand and its viability in additional sectors of the custom world is proven, the arrival of Royal Enfield's new 650 twins in dealerships in Europe and North America, along with the arrival of the press release about S&S Cycle's new range of 'Proven Performance' parts for it, has been the catalyst for pulling the trigger on a modest but forward facing change that has been decades in the making.