HDFS 30-Day Delinquencies Decline for First Time in 11 Quarters

For the first time in 11 consecutive quarters, 30-plus day delinquencies declined year over year for Harley-Davidson Financial Services, according to the OEM’s fourth-quarter earnings today.

Delinquencies 30 days or more past due dipped to 4.21% in the quarter, as compared to 4.25% the same time a year prior. However, net losses did rise, reaching 1.90%, compared with 1.83% in 4Q16. While losses are up, the rate of increase “has tempered quite significantly” from last year, Harley-Davidson Inc.‘s Chief Financial Officer John Olin said on the call.

It’s unclear why the delinquencies dipped or if HDFS’s previous underwriting changes made in 2016 had any effect. The captive did not respond to a request for comment by press time.

HDFS originated $495.1 million in motorcycle loans — down 0.3% year over year — in the fourth quarter. But the captive’s full-year 2017 originations were up 2.8% to $3 billion, as compared to the prior year, according to the report.

Separately, the OEM is on target to launch its first electric motorcycle within 18 months, according to the earnings release. Harley-Davidson announced today that it “will invest more aggressively” in the application of electric motorcycle technology to help attract new riders.

“The EV motorcycle market is in its infancy today, but we believe premium Harley-Davidson electric motorcycles will help drive excitement and participation in the sport globally,” Matt Levatich, Harley’s president and chief executive, said in the release. “As we expand our EV capabilities and commitment, we get even more excited about the role electric motorcycles will play in growing our business.”

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