Harley Offers Incentives on Oversupply Amid Plans to Shutter Kansas City Plant

Harley-Davidson Inc. is shuttering its Kansas City, Mo., manufacturing plant by summer 2019 and pushing incentives on some of the models that were produced at the plant, the company announced last week.

The company is cutting 800 jobs from the Missouri plant as it ups production and adds an additional 400 jobs to the York, Pa., plant. Sales have not kept up with an oversupply of bikes and it could push more finance incentives, as evidenced by the company’s new offerings this week.

Harley Davidson Financial Services is offering zero down and as low as 0.99% APR on a 60-month term on new Softail, Sportster, and Street motorcycles — including the 2018 Breakout and Fatboy models, according to a several Harley-Davidson dealership websites. Those two models are part of the OEM’s Softail line that was produced at the Kansas City plant.

Both Harley-Davidson and its financial services arm did not respond to a request for comment.

“Our actions to address the current environment, through disciplined supply and cost management, position us well as we drive to achieve our long-term objectives to build the next generation of Harley-Davidson riders globally,” Matt Levatich, president and CEO, said in a statement.

Harley-Davidson’s worldwide retail motorcycle sales fell 6.7% in 2017, compared with the year prior. The sales drop was more acute in the U.S., where sales fell 8.5%.

The company could be facing pressure due to competitive pricing from Japanese manufacturers, which have benefitted from a strong performing dollar that makes it more profitable to sell bikes in the U.S.

“Ultimately, this initiative is about reducing excess (plant) capacity,” a spokesman told the Milwaukee Journal Sentinel in a statement. “Our Kansas City workforce has done a tremendous job producing quality motorcycles and serving our customers. And we have always appreciated the support of our Kansas City community.”

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