The last few years haven’t been a smooth ride for the American motorcycle company, Harley-Davidson due to the dwindling sales and relatively lower demand for cruiser bikes. The company reported a 23% drop in first-quarter profit on Thursday. Consequently, its shares plummeted 18% in afternoon trade.
The company restated its motorcycle business’s full-year revenue growth forecast, anticipating it to remain flat to down 9%, with an operating income margin between 12.6% and 13.6%, in line with the previous year’s performance.
“We’re just entering the riding season, and a lot hinges on the second quarter, which is why we haven’t altered our guidance at this point,” said Harley-Davidson CEO Jochen Zeitz during a call with analysts.
Despite attempting to broaden its product range with electric and low-cost options such as the X440 launched in the Indian domestic market, the century-old motorcycle manufacturer has faced challenges in appealing to younger buyers.
Why Harley-Davidson Sales Are Falling?
Harley-Davidson’s sales have been declining due to several factors. One major challenge is the company’s struggle to attract younger buyers, who often perceive Harley motorcycles as expensive and less appealing compared to other options.
Additionally, Harley faces stiff competition from other motorcycle manufacturers offering more diverse and affordable models, particularly in the cruiser and touring segments. Economic uncertainties and high borrowing costs have also deterred potential buyers from making big-ticket purchases like motorcycles.
Sales in key international markets, such as Europe and Asia, have declined due to economic slowdowns and weakening demand. Despite efforts to diversify its lineup with electric and low-cost options, Harley-Davidson’s traditional brand image may not resonate as strongly with younger consumers.
To reverse the sales decline, Harley-Davidson will need to address these challenges and adapt its strategy to meet the changing preferences of today’s motorcycle buyers.
(With Reuters Inputs)
