Harley-Davidson's retail motorcycle sales declined 9.6 percent previous year, the company disclosed in a fourth-quarter earnings report released Tuesday. The move is expected to lead to ongoing annual savings of $65 million to $75 million after 2020. "Our Kansas City manufacturing assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership", Harley-Davidson President and Chief Executive Officer Matt Levatich says in the company report.
Now, with the baby-boomer generation that has always been the backbone of Harley's customer base starting to age and die off, the firm needs radical ideas to attract a younger generation of riders who don't share their parents' affinity with traditional V-twin cruisers.
Motorcycle maker Harley-Davidson said on Tuesday that it would slash jobs and close a plant because of declining motorcycle shipments. Where the 32,000 new Harley-Davidson buyers in the US a year ago probably bought their first hog in large part for its patented loud sound, the electric Harley will undoubtedly be quiet (er). Net income fell a whopping 82 percent in the fourth quarter to $8.3 million. The investment will go towards technology, products and infrastructure needed to be a market leader in electric vehicles. Worldwide retail sales declined by almost 7% compared to the previous year - with an 8.5% decline in the US and a almost 4% decline in global markets. It also states that Harley intends to be "the world leader in the electrification of motorcycles".
"The more we grow our experience and capability with EV, the more excited we become about the role it will play in growing business, about the additional and region impact electric Harley-Davidson motorcycles will bring as an element of our product portfolio".
The company is also closing a plant in Adelaide, Australia, but it is opening one in Thailand.
The company plans to shutter a factory in Kansas City in 2019 and send some of that production to another plant in York, Penn.
The question for Harley investors is whether the new timeline for a real LiveWire bike is believable, or just a way to change a story that's losing traction.
The company has set out a turnaround strategy to attract 2 million new riders in the next decade by introducing new models. Harley-Davidson sales has been less than enthusiastic, with sales in the fourth quarter slipping by 11.1 per cent in the U.S., and 9.6 per cent worldwide. It forecast 231,000 to 236,000 motorcycle shipments in 2018. Shares of the company have declined about 12 percent in the past year.