Tag Archive | "Harley-Davidson"

Harley-Davidson Profit Slips, but Shipments In Line With Expectations

Harley-Davidson Inc. posted lower earnings and revenue during the third quarter as motorcycle shipments declined as expected, reported The Wall Street Journal.

The company’s earnings topped analysts’ expectations, however, while the top line fell short.

The motorcycle maker has sought to reach beyond its traditional, middle-aged target audience with smaller bikes geared toward younger customers. While demand has been somewhat stable—dealers sold 3.4% more new motorcycles in the most recent period—shipments have slipped as of late.

In the most recent quarter, Harley said it shipped 50,670 motorcycles to dealers and distributors, an decrease of 6.2% from a year earlier, in line with the company’s expectation as it had planned to scale back.

Harley in July had cut its shipment forecast for the year to 270,000 to 275,000 bikes from its previous call of 279,000 to 284,000. Earlier this year, the company also recalled several thousand motorcycles due to an ignition switch problem that could cause the vehicles to stall during operation.

For the period ended Sept. 28, Harley posted earnings of $150.1 million, or 69 cents a share, down from $162.7 million, or 73 cents a share, a year earlier.

Revenue decreased 4.2% to $1.13 billion.

Analysts had projected 59 cents a share in earnings and $1.14 billion in revenue, according to Thomson Reuters.

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Harley-Davidson Recalls Bikes for Ignition Switch Problem

Ignition switch problems that have plagued General Motors and Chrysler have now turned up in the motorcycle business, reported Michigan Live.

Harley-Davidson is recalling more than 4,500 FXDL Dyna Low Rider bikes worldwide because engine vibration can turn the switches from “on” to “accessory.”

The recall covers motorcycles from the 2014 ½ model year, including more than 3,300 in the U.S. If the motorcycles have been modified to rev higher than 5,600 RPMs, an engine mount bracket can vibrate excessively, causing the problem.

If the switch goes to “accessory,” the engine can shut off while being driven and potentially cause a crash. The company said there have been no crashes or injuries reported from the problem.

Dealers will replace the bracket assembly and ignition switch knob for free. Harley began notifying owners in late July.

Harley said in documents posted Friday by the U.S. National Highway Traffic Safety Administration that the motorcycles are limited at the factory to 5,600 RPMs, but Harley offers performance calibrations that let the engine rev higher than the limit. If the bikes hit 5,800 RPMs, the top engine mount bracket can vibrate too much and cause the ignition switches to malfunction.

The company said it began looking into the problem after its service department discovered that an ignition switch slipped out of the “on” position in testing. Harley found four warranty claims and complaints about the problem, all in bikes with non-Harley exhaust systems.

The Milwaukee company’s recall comes after General Motors recalled 17.3 million vehicles to fix problems with ignition switches that can cause engine stalling. Chrysler has recalled another 1.7 million for the same problem. So far this year the auto industry has recalled more than 40 million vehicles, passing the old full-year record of 30.8 million set in 2004.

Federal safety regulators in June began a broad investigation of ignition-switch and air-bag problems across the auto industry. That investigation is still open, although the agency wouldn’t say if more automakers could be affected.

Harley said it issued the recall independently, and it has nothing to do with ignition switch problems in the auto industry or the NHTSA investigation.

The investigation and recalls come after GM bungled an ignition-switch recall of older small cars. GM acknowledged that it knew of the ignition problem for more than a decade but failed to recall the cars until earlier this year, when it recalled 2.6 million small cars such as the Chevrolet Cobalt. Subsequent safety reviews caused GM to recall millions more vehicles for faulty switches.

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Harley-Davidson Upstaged by Polaris in Motorcycle Sales

Harley-Davidson Inc. reported disappointing retail sales of its motorcycles in the second quarter even as smaller rival Polaris Industries Inc. posted a strong showing, reported The Wall Street Journal.

Milwaukee-based Harley, the dominant supplier of heavyweight motorcycles in the U.S., reported a 30% rise in profit, reflecting higher profit margins and a rise in shipments to dealers for sales in the months ahead. In the second quarter, Harley dealers world-wide sold 90,218 new Harley motorcycles in the quarter, barely changed from a year earlier.

The company blamed bad weather in parts of the U.S. and said some customers apparently held off purchases because they were waiting for new models. Harley now expects its shipments to grow between 3.5% and 5.5% this year, down from an earlier forecast of 7% to 9%.

Harley said its share of the market for new heavyweight motorcycles with engines of 601 cubic centimeters or greater slipped to about 50% in the quarter from 53% a year earlier.

“We believe the flat retail sales are a temporary situation,” Harley-Davidson Chief Executive Officer Keith Wandell said in a call with analysts. He said riders were enthusiastic about new Rushmore and Street models.

Quality problems with imported parts for the new lighter-weight Street models reduced availability of that product, Harley executives said. Harley generally relies on U.S. suppliers but is using imported engine parts to hold down costs on the Street bikes, which retail for between $6,800 and $7,500 and are aimed at young urban adults. Larger and more luxurious Harley bikes can retail for as much as $39,000.

Supplies of the Street models should be much higher later this year, said John Olin, chief financial officer. Also hurting sales in the second quarter was the absence of new models of the Road Glide series, which is being retooled. Road Glide accounted for 10% of sales in the year-earlier quarter, Mr. Olin said.

Polaris, which posted a 21% increase in second-quarter profit, touted a big increase in sales of its recently relaunched Indian heavyweight motorcycle brand. Polaris said sales at its motorcycles division more than doubled to $103.1 million.

Harley’s profit came to $354.2 million, or 1.62 per share, up from $271.7 million, or $1.21 a share, a year earlier. Wall Street expected earnings of about $1.47 per share in the latest quarter, according to FactSet.

Harley’s revenue, including motorcycles and financial services, grew 12% to $2 billion. The company books revenue when it ships to dealers.

Minneapolis-based Polaris, which also makes snowmobiles and all-terrain vehicles, reported net income of $96.9 million, or $1.42 per share, up from $80.0 million, or $1.13 per share. Sales increased 20% to $1.01 billion.

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Harley-Davidson Wheels Out an Electric Bike

Harley-Davidson Inc., known for gasoline-powered motorcycles thundering with machismo, is testing a battery-powered model that it hopes will appeal to younger people concerned about the environment, reported The Wall Street Journal.

“We’d like to get customer feedback,” Matt Levatich, Harley’s president and chief operating officer, said in an interview, adding that the product is at least two years away from being offered for sale. For now, he said, the lithium-ion batteries in prototype models have a range of roughly 100 miles between recharges under typical riding conditions. They can go from zero to 60 miles an hour in “just under four seconds,” he said.

The Milwaukee-based company said on Thursday that “select consumers” around the country next week will start getting a chance to ride prototype cycles with rechargeable batteries.

Harley wouldn’t be the first to offer such a motorcycle. Companies including Zero Motorcycles Inc., Brammo Inc. and Mission Motorcycles Inc. now sell battery-powered motorcycles, and bigger manufacturers are experimenting. BMW AG sells a battery-powered scooter, dubbed the C evolution, in Europe. So far, said Harley’s Mr. Levatich, sales of electric motorcycles are “insignificant.”

“We anticipate it’s going to appeal to a younger, more urban demographic,” a Harley spokesman said. The company said the test was part of a goal of “preserving the riding environment.”

The company still hasn’t decided whether or when to put such motorcycles on the market and is looking for feedback from bike owners before proceeding further, he said. The project, dubbed LiveWire, has been in the works for four years, he said.

Chris Narayanan, 39, said he is curious about the battery-powered bike. “I’d give it a try if I had the opportunity,” said the New York resident. For now, though, he is having fun with his 1998 Harley Sportster 1200 and plans to upgrade to a bigger Harley in a few years. “It’s an interesting gamble for Harley. I know they want to appeal to younger riders and get them into Harley.”

Justin Massey, general sales manager for a Harley-Davidson dealership in Hammond, Ind., thinks the sporty, racing-bike styling and first-of-its-kind status for Harley will attract an audience on its tour of dealerships. “I’m sure it will create quite a buzz,” said Mr. Massey, who doesn’t know if his dealership will be on the tour. “It’s a good-looking bike and people will want to be around it.”

Rather than the rumbling sound of traditional Harleys, the new machines sound more like a jet engine, only much quieter, Mr. Levatich said.

The project wasn’t launched in response to environmental regulations, he said. Rather, current technology allows the company to produce a battery-powered cycle and “we feel we should,” Mr. Levatich added.

James Hardiman, an analyst for Longbow Research, called the project a surprise. “It’s a pretty big departure from anything they’ve ever done,” he said, and should help Harley appeal more to a younger and more environmentally conscious crowd.

Initially, “you’re not going to get very far from one charge,” he said, but battery technology is going to get “a whole lot more efficient in the years to come.”

For people who don’t already ride motorcycles, Harley promised to offer a “simulated riding experience” rather than a road test. Experienced riders will be invited for highway rides.

In recent years, Harley has striven to reduce its reliance on aging white male baby boomers and appeal more to young people, women and minorities. As part of the company’s strategy, two new bikes, known as the 750 and 500, are being rolled out. These smaller bikes are aimed at younger riders, who might find a traditional Harley touring bike too large or heavy to handle, particularly on crowded city streets.

The company didn’t release a possible price for the LiveWire. High costs and limited range have kept demand low for battery-powered cars so far.

Harley-Davidson is the dominant U.S. supplier of heavyweight motorcycles. For this year’s first quarter, the company reported that its share of sales in the U.S. market for new motorcycles with engines of 601 cubic-centimeters displacement or greater was 56%.

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Harley-Davidson Hires Ex-GM Engineer Who Helped Find Faulty Switch

Via Reuters

Motorcycle maker Harley-Davidson Inc said on Tuesday it has hired a former General Motors Co engineer who oversaw an internal investigation of the defective ignition switch linked to at least 13 deaths.

Harley-Davidson said Jim Federico, 56, who GM said retired on Monday, will start as vice president of engineering on June 2, working at the company’s Milwaukee headquarters.

“We’ve been talking to Jim about this position for some time,” Harley-Davidson spokeswoman Maripat Blankenheim said.

Federico had been director of global vehicle integration at GM since September 2013.

According to GM documents made public last month by Congress, Federico had received reports from an engineer in the company’s product investigations department trying to learn the root cause of airbag failures in GM vehicles. The effort to answer that question led to engineers finding the defective ignition switch. In 2012, Federico had been a “champion” of that probe, a term used to identify a senior executive who marshals internal resources.

GM said Monday that Federico’s retirement was his choice and had nothing to do with the switch recall.

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Harley-Davidson, Jaguar and Mazda Issue Recalls

Via NYTimes

Harley-Davidson is recalling about 9,100 motorcycles because they can unexpectedly run out of fuel and stall, while Jaguar is recalling almost 300 vehicles because “prolonged, aggressive driving” could cause rear suspension failure, according to reports posted on the National Highway Traffic Safety Administration website.

The Harley-Davidson recall covers the 2013-14 FXSB Breakout and FXSBSE CVO Breakout models built from March 20, 2012, to March 10, 2014, according to the company’s report.

Harley-Davidson said it learned of the problem in January when an engineer ran out of fuel. It investigated and concluded that a suspension difference on the recalled models changed the angle of the fuel tank by “approximately three degrees,” causing an incorrect fuel-level reading. The company said it would update the software for the fuel-level sensor. There was no mention in the report of any accidents or injuries.

The Jaguar recall covers 2013-14 XJR, XFR-S and XKR-S GT models, according to the report the automaker filed with the safety agency.

The automaker told N.H.T.S.A. that during “road load data” testing it discovered that “in the event of prolonged, aggressive driving with frequent lateral and braking force inputs it is possible that the rear toe link will separate from the rear subframe.” The defect could cause the wheel to suddenly lean inward or outward. Jaguar says that because “vehicle stability will be compromised and the degree of directional control minimized, this significantly increases the risk of an accident.”

The automaker said it was not aware of any accidents, injuries or failures on customer vehicles related to what it called a “long-term durability concern.”

In other actions:

Mazda is recalling about 5,700 of its 2014 Mazda 3 and 2014-15 Mazda 6 cars because of a problem with the regenerative engine braking system. The company says that in heavy rain or deep puddles, the generator belt may get wet and slip, which can cause the power control module to conclude that there is a failure of the energy storage capacitor. In such a case, the charging system would be stopped. If the driver were to ignore the associated warning light, the battery would be drained, which “will likely result in loss of steering assist, windshield wiper operation and the engine will finally stop operating.”

The agency asked Mazda why it didn’t recall the vehicles sooner because it knew about the problem last summer. Mazda said in its response that no recall was needed because the defect was not “an unreasonable risk to safety” because a warning light was illuminated. But, the automaker said, it decided to issue a recall in the United States after government safety officials in Japan insisted on a recall in that country.

Jaguar is recalling about 1,600 XFs from the 2013-14 model years because of a stalling problem, according to a report the automaker filed with the agency. Jaguar said the charge air-cooler hose on models with the 2-liter GTDi engine could detach, causing the engine “to cut out without warning,” resulting in a loss of power assist for the steering and brakes.

Jaguar and Mazda each described their recalls as voluntary, but once a manufacturer is aware of a safety problem it must – within five business days – inform the agency of its plan for a recall or face a civil fine.

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