Harley Profit Surges, But Market Share Slips
Harley-Davidson Inc.'s net income more than tripled in the first quarter, but the Milwaukee-based maker of motorcycles reported a small drop in its U.S. market share.
Keith Wandell, chief executive officer, said in an interview that the company was hurt by "fierce price competition" in the U.S. from rivals discounting older models by as much as $4,000 per bike.
Mr. Wandell also said supplies of used motorcycles were at unusually high levels because many people put their machines up for sale after losing their jobs during the recession, reported The Wall Street Journal.
The availability of used bikes at bargain prices hurts sales of new models, but a Harley spokesman said prices of used motorcycles has started to rise as demand recovers.
Harley said its share of the U.S. market for new heavyweight motorcycles with engines of 651 cubic centimeters or greater slipped to 53.4 percent in the first quarter from 55.5 percent a year earlier. The company's rivals include Japan's Honda Motor Co. and Kawasaki Heavy Industries Inc. and Germany's BMW AG.
World-wide retail sales of Harley motorcycles were up 3.5 percent from a year earlier to 49,595 units, the first increase since the fourth quarter of 2006. Sales outside the U.S. accounted for 36 percent of the total. Sales were up 21 percent in Europe, where Harley gained market share, but fell 3.9 percent in the Asia-Pacific reason, partly because the Japanese earthquake hurt business.
Harley also said it faces possible shortages in the current quarter of electronic parts from Japan used in radios on its motorcycles. That could curb production modestly, the company said. It reduced the low end of its projection for total shipments this year to 215,000 from 221,000.
Harley's net income rose to $119.3 million, or 51 cents a share, from $33.3 million, or 14 cents a share, a year earlier. The improvement largely reflected stronger results from its financing arm, which provides loans to motorcycle buyers, and the elimination of losses produced a year ago by operations that have been sold or closed down.
Sales of motorcycles and related products grew 2.5 percent to $1.06 billion.
More Industry

Achromatic Autos
The shades that dominate the U.S. car market don’t call attention to themselves, though grayscale may have plateaued after a 30-year upswing, research shows.
Read More →
Used-Vehicle Affordability Worsens
Listing prices in August defied seasonal trends, rising above $27,000 for the second time this year.
Read More →
First-Half Dealership Deals Up
Buy-sell activity shows that acquirers are looking for value and scale as many retailers seek to leave an increasingly competitive and complex market, Kerrigan Advisors reports.
Read More →
Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →