Harley-Davidson Financial Services saw an 8.9% jump — to $683.6 million — in its year-over-year origination volume in the first quarter of 2016, the company announced today. This is also a 41.5% increase from 4Q15’s $483.2 million.
The captive’s 1Q originations were comprised of 80% prime loans and 20% subprime loans, which remains the same as the previous quarter’s origination mix. “As a predominant industry lender to subprime customers, these originations represent a significant number of retail sales to the company at very attractive returns,” John Olin, chief financial officer at HDFS, said during an earnings call.
Wholesale and retail finance receivables outstanding were $7.53 billion in 1Q, up 7.9% from the same time a year prior. Harley-Davidson also reported that U.S. retail motorcycle unit sales were down 0.5% to 35,326 units sold, year over year. “Although retail motorcycle sales in the U.S. were down slightly compared to the year-ago quarter, retail sales trends have significantly improved over previous quarters,” according to a company press release.
“I am pleased with how our first quarter results demonstrate the progress we’re making in both driving demand and delivering business performance in a highly competitive environment,” Matt Levatich, president and chief executive of Harley-Davidson Inc., said in the release. “The increased marketing and new product investments are beginning to take hold and we anticipate continued progress across our focus areas as we dial in and ramp-up our approach.”
Financial services operating income was also down 12.8% to $56,371 in 1Q, from $64,664 the same quarter a year prior, as a result of a “higher provision for retail credit loan losses,” according to the release.