Harley-Davidson’s lower profits for declining sale, expanding Thai facility to serve Europe

Harley-Davidson’s lower profits for declining sale, expanding Thai facility to serve Europe


Harley-Davidson Inc reported its fourth quarter results on Tuesday that came out with worse-than-expected profits. The company also forecasted decline in global sale of its motorcycles in 2019.

Harley-Davidson has been facing its sales declining for several years, mostly because of reason that its core users grew older and younger generation in the United States is not as much interested in the motorcycles as was the previous ones. But still company reported that it succeeded to secure 52,000 more riders than a year earlier.

Company reported fourth quarter adjusted earnings of 17 cents per share against the estimates of 28 per share.

Revenue of motorcycle maker dropped to $1.15 billion from a year ago consolidated revenue of $1.23 billion but slightly up from forecasted revenue of $1.05 billion.

Net income of the company during fourth quarter remained $500,000 which was $8.3 million in the same period in 2017.

The United States is the largest market of Harley-Davidson, which accounts for nearly 60 percent of total sales, but in fourth quarter its U.S. retail sales declined by 10 percent whereas it saw sales decline of 6.7 percent globally.

For the declining sales, company has been putting its efforts to revive the demand in the country and adopting strategies to grow its worldwide sales.

The tariff war waged by the U.S. president Donald Trump also affected the sales of Milwaukee, Wisconsin-based Company, as European Union has also raised its tariffs on imports from the United States. In order to avoid fallout that trade war, company is intending to boost investments at its Thailand plant to serve the European market from there.

To expand its facility in Thai city of Rayong, which was originally built to serve the Chinese and Southeast Asian markets, company is planning made an investment of $15 million, with an expectations of  European shipment from there expected to be start by the end of this year.


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