Rain in May increased over an inch on average nationally, climbing to 4.4 inches last year. The average temperature was six degrees cooler, as well, dropping to 59.5°. Though BMO hasn’t finished collecting June data, it expects similar results.
Dealers complained that an 8% drop in inventory hurt sales. Some felt that the lack of bikes in their dealership gave the perception that they were going out of business, according to the report.
Meanwhile, used Harley prices dropped 6% from January. Harley views stabilizing used prices as “critical to improving new-unit sales,” because it believes that a large price gap between new and used bikes encourages consumers to purchase used bikes. Dealers contend that high prices for new bikes are the issue, rather than low prices for used bikes. “Should used prices increase and move out of a buyer’s affordability zone, that buyer may opt for a metric bike instead of a Harley,” Analyst Gerrick Johnson wrote in the report.
However, Harley’s “Own the Dream” campaign, which advertises the monthly cost to finance a Harley-Davidson motorcycle instead of the sticker price or financing rate, is “spot on,” Johnson added. Powersports consumers often operate on monthly budgets, and the focus on monthly costs helps buyers evaluate whether a bike would fit in that budget. “Harley-Davidson motorcycles don’t seem so out of reach at $124 per month,” he noted.
This new marketing tactic “will resonate more than any other call-to-action marketing the company has executed in recent years,” BMO adds.
Additionally, Harley is introducing its first electric motorcycle model, called Livewire, in August. About 100 U.S. dealers will be carrying the LiveWire, but initial interest has fallen short of BMO’s expectations. BMO had forecast that the entire 2020 lineup would sell out in preorders, but “about half of the initial allocations have customer deposits on them,” Johnson said.
Rather, surveyed dealers have said that the bike has been generating interest out of curiosity, but not sales leads. That said, BMO expects preorders to increase as the August launch approaches.