Harley-Davidson Financial Services ended the quarter with an overall industry marketshare of 63%, up 6% versus the same time a year prior, according to first-quarter earnings released Tuesday.
The growth can be attributed to competitive financing incentives offered on model year 2016 motorcycles, John Olin, Harley-Davidson Inc.’s senior vice president and chief financial officer, said during Tuesday’s earnings call.
HDFS offered 0.99% financing for 60 months to its top tier — prime and super-prime — consumers from Dec. 16, 2016, through the end of February, to help dealers sell 2016 remaining inventory, Olin said.
“Model year 2016 carryover inventory is a much bigger percentage of the total inventory in the system than we would like at this point, and it is higher than what we had on a year-over-year basis,” Olin said. “The dealers are doing a very good job of burning through that carryover, but it is, no doubt, higher than we want.”
HDFS originated $709.8 million in loans — up 3.8% year-over-year — in the first quarter, according to the company’s earnings. Annualized net losses of 2.3% in 1Q were up 33 basis points from the prior-year quarter. Additionally, 30-day delinquencies reached 3.2% in 1Q, up from 2.9% in the prior-year quarter.
Separately, parent company Harley-Davidson Inc. announced yesterday that it will lay off 118 workers at its York, Pa.-based plant and shift employment to Kansas City, Mo. The layoffs — affecting mostly hourly workers — will begin June 23 and continue through the end of July, according to a published report.
In November 2015, the motorcycle maker told employees its plans to shift the production of Harley-Davidson cruisers to Kansas City, starting in the 2018 model year. Harley eliminated more than 100 union positions at the York plant late last year in a move due to lagging sales, the company said at the time.
Harley-Davidson’s U.S. retail motorcycle sales were down 5.7% in the first quarter, to 33,316 units from the same time a year prior.
“As we anticipated, our U.S. retail sales were down behind a soft market, yet our share held strong, despite our decision to limit availability of model year 2017 motorcycles,” Matthew Levatich, Harley-Davidson’s chief executive and president, also said on the call. “This decision helped dealers focus on selling down model year 2016 bikes,” but did have a “negative impact” on the motorcycle maker’s U.S. sales, he added.