HARLEY DAVIDSON RESULTS

Harley-Davidson Inc (NYSE:HOG) the American motorcycle manufacturer is facing a dangerous downhill.

The third quarter results certify their stagnation. and while Europe and Asia pull sales, that is not enough to offset the fall in the US. The value on Wall Street is at 2012 levels.

Harley-Davidson continues rolling down the roads around the world, but slows at home in the US. Keith E. Wandell, head of the Milwaukee firm until last May, and I saw it coming. The business has remained strong early in the year, despite the “headwinds”. These winds refer to the benefit of the motorcycle manufacturer, which has begun a dangerous downhill. In the third quarter of 2015 it entered 1,320 million versus $ 1,300 million in the same period last year, but the benefit has been cut by 7.6% to 140.3 million dollars, compared with 150.1 million 2014.

Matt Levatich, is the president and CEO of Harley-Davidson since May.

The disappointment in the company is palpable. “This third quarter has not developed as expected,” said Matt Levatich, new president since May. In two days, Wall Street punished Harley-Davidson (HD) with its biggest drop on the stock market (-16.45%) since the beginning of the crisis, returning to action November 2012 values, $ 47.03.

These bad figures confirm the negative trend in the numbers of HD, that so far this year posted a net profit of 710 million dollars (645 million euros), 7.8% less than in the same period of 2014.

Levatich said: “This strong competitive environment will continue” and that the brand will increase investment in marketing and new product development.

The sales increase this quarter in Europe, the Middle East and Africa-in the environment of 2.4% and 5% in Asia not offset the fall in the US, which has been almost 2.5%, and 1% in the rest of the world, driven by Latin America, where sales fell 11%.

In this situation we add that, in recent times, his rivals in the domestic market have a strong policy of discounts on their models, with very aggressive offers as low interest loans, and even subsidized repurchase of models in exchange for the new. Add to this the increasingly strong position of the dollar against the euro is added, and the yen does not help, the mix is served.

But, according to market sources, Harley-Davidson is not willing to compete on price, something the industry segment thanks. And he is not willing to do even though it has had to revise downwards its sales forecast for the year to 265,000 / 270,000 units compared to 276,000 / 281,000 initials.

The drop in sales in the US and the dollar’s strength against the euro and yen hinder their business.

In addition to increased marketing items and development of models, Harley-Davidson plans to spend this last quarter, about 30 or 35 million dollars to reorganize the company, which would also include a number of layoffs.

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