Motorcycle Sales On The Rise

It may not be everyone’s choice in motorcycles, but Harley-Davidson has reported some pretty encouraging financial results for 2013 this week and the company says it’s optimistic for even better figures in 2014.

In 2013, Harley-Davidson dealers sold 260,839 motorcycles worldwide compared to 249,849 the previous year. The U.S market, where two thirds of all its bikes are sold, was up 4.4%, while Latin America 13.1% and Asia Pacific at 9.8% reported the biggest area of growth for the company year on year. H-D is also forecasting selling up to 81,000 motorcycles in the first quarter of 2014, another increase over the 75,222 it actually sold in the same period last year.

These results from Harley come close on the heels of other motorcycle manufacturers reporting they too are starting to see some confidence returning among consumers and motorcycles starting to sell well again here in the U.S.

Harley-Davidson

Photo by Bob Mical

But remember back in the mid 2000s when the housing bubble burst? H-D was making around 350,000 bikes a year in 2006. Then the economy along with almost everything else went to hell in a hand basket.  Sales of all motorcycles, which are seen by many as a discretionary spend rather than a necessity, tumbled along with the broader economy.

It finally bottomed out in 2010 when H-D shipped 210,494 bikes to its dealers, which was some 40 percent fewer than four years previously. Clearly something needed to be done and quickly.

So what happened was that H-D’s management seized the initiative and went to work. On the face of it, it looked highly likely that they might not actually be able to turn the ship around. First thing to go was the Buell brand followed by MV Agusta. Then the implementation of an ambitious restructuring program that saw it finally come to an agreement with wage concessions with its union workers at its facilities in Milwaukee, Kansa City and York. This and a flexible working program that allowed the company to ramp up production saved the company $310 million alone in 2013.

Harley-Davidson also made money last year. Their net income was $734 million on consolidated revenue of $5.90 billion, compared to $623.9 million on consolidated revenue of $5.58 billion in 2012. Included in the 2013 revenue figure is the $873.1 million it generated by distributing parts and accessories.

2014 Harley-Davidson Street 2014 Harley-Davidson Street

Why should you care if Harley-Davidson is doing well? Well aside from creating manufacturing and retail jobs and supporting the U.S. economy, if Harley-Davidson is doing well it’s a reflection that people are spending money again on non-essential items like motorcycles.

That confidence has a knock on effect for the rest of the industry here in the U.S. where H-D ultimately is the biggest player.

But it’s not just good news coming out of Milwaukee. BMW and Honda are significant industry stalwarts around the world and in the U.S each reported big sales improvements in 2013.

Honda sold 16.8 million motorcycles globally last year up 8.7% from the 15.5 million in 2012. However, its performance in Japan and Europe was still down year on year, with biggest increases in China and Asia providing 1.35 million sales. North America was also up to 278,000 in 2013 compared to 264,000 in 2012.

BMW Motorrad USA reported a 17 percent increase in sales for 2013 – its second highest retail performance on record – with 14,100 bikes sold in 2013 compared to 12,100 units sold in 2012. Worldwide, BMW Motorrad sales reached a record high for the third year in a row with 115,191 sales up 8.3% over the previous record of 106,358 sales in 2012.

Ultimately this is all good news for every single one of us that rides and likes motorcycles. While the motorcycle industry as a whole has not quite turned the corner just yet, there are some encouraging signs that the global economic slump we’ve all just been through may finally be coming to an end.

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