Harley Davidson is shifting its focus from its primary market of US to the oversees market in a bid to revive the hope of rising sales. Although the overall sales decline by 7 percent, the stock soared by 3.6 percent. This means that investors are looking past the short-term performance and are optimistic about the future prospects of the company.
Harley Davidson is in troubled waters
Despite the dip in the sales, Harley command half of the share of big bike market. However, this bike is now facing tough competition from the heavily discounted bikes of rivals.
“A lot of investors were expecting a guidance (2018 shipments) to be lowered, that didn’t happen,” Northcoast Research analyst Seth Woolf said.
Further, in order to revive the demand of its product, Harley is adopting innovative marketing techniques and also focusing on product development. Through product development, Harley is trying to introduce a product that could adequately respond to the new trends and practices in the market.
“There is more marketing and sales support queued up to deliver our spring sales goals,” Chief Executive Officer Matt Levatich said, adding that its two new bikes launched this year were well received by dealers and customers.
Harley’s international sales rose by 0.2 percent but the shipment from United States are declining. The input prices for automobile or bike manufacturer has risen sharply ever since the current administration has slaped tariffs on the aluminum and steel products. The problems for Harvey does not end here, the European Commission has also threatened the Harley to impose duties on Harley’s motorcycle.
“We enter this year with full awareness of the headwinds we face, and we are making progress against our plans to address challenges,” Levatich said.
“1Q18 appears to be when HOG finally got expectations low enough to not miss,” Morgan Stanley Carmen Hundley said.