Harley-Davidson used to sell about 1/3 rd of its production during the 3 months of spring. But this year it will not happen. UBS analysts state that in April & May retail sales were down about 35%. So, it’s quite impossible that June will let Harley catch up with the spring average. Worse, low volume of new motorcycle sales seems to feed itself due to the fact that the used market is extremely good.
Why to buy a brand new bike when you can get a slightly used one from a “subprime loan borrower” in big trouble and ready to accept a very low offer (here we receive a dozen of calls every week from individuals begging us to sell their bikes. And always after having exhausted the local newspaper ads and the bike nights…). Americans continue to love their bikes, but can’t keep them or don’t have enough money to buy new ones. Add to this the fact that most baby boomers (the youngest are 45 and the oldest 65) have reached (at an average of 46 years old) or passed their peak income and spending years, and you understand why Harley is having a horrible year. One year ago the share price was nearly $40. It is now trading around $16.