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Harley plans to hitch a ride with two-wheeler makers

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from Lijee Philip from https://economictimes.indiatimes.com

Harley plans to hitch a ride with two-wheeler makers, Classic Legends, Hero Motocorp frontrunners

Mahindra’s Classic Legends could be the obvious choice for the iconic leisure bike making company as it aligns very well with M&M’s approach of catering to the premium end of the market with marquee brands , and for Harley, it gets a local company with a large manufacturing facility and an established local supply chain.

After its global restructuring efforts to make Thailand its main hub for Asia Pacific, Harley Davidson is now understood to be exploring potential collaborations with Indian two-wheeler makers. The two possible names doing the rounds are Mahindra NSE -0.82 %’ subsidiary Classic Legends and Hero Motocorp NSE -1.89 %.

The potential Indian alliance partners could do contract manufacturing for Harley Davidson in the mid-size motorcycle space – in line with Bajaj-KTM or TVS-BMW.

Mahindra’s Classic Legends could be the obvious choice for the iconic leisure bike making company as it aligns very well with M&M’s approach of catering to the premium end of the market with marquee brands , and for Harley, it gets a local company with a large manufacturing facility and an established local supply chain.

Classic Legends was established to re-introduce iconic marquee motorcycle brands in the market and currently retails the Jawa motorcycle brand also owns iconic brands like BSA & Yezdi.

While it started of with impressive sales numbers, delays in deliveries and quality issues makes it difficult for the company to meet the growing demand.

Hero Motocorp has stated that it’s open to partnerships to get a stronger foothold in the premium segment. Market leaders in entry level/commuter and the 125cc segments, it lacks premium bike building capability.

After several attempts, Hero has finally managed to break-into 200 cc segment with Xtreme, but bikes beyond 350 cc domain does not exist with the maker of Splendor, with Harley coming on board, the positioning would have been quite complementary in nature.

Harley-Davidson has been scouting for alliance partners in India with a manufacturing and distribution network to make lightweight motorcycles in the sub-500cc category. Under the new CEO, things are being reviewed again, say sources. ..

While the contours of the agreements are still being worked on, sources say it will be a non-equity partnership to make bikes targeting the small displacement category.

To a detailed email query , Harley Davidson, Mahindra ,Hero Motocorp and Royal Enfield said it does not comment on market speculation and rumours.

“On its own and with limited volumes, Harley will struggle to localise. By partnering with a local company, Harley will not only be able to shed fixed cost, but also accelerate sourcing with the help of the local partner. Over the last five years, the company has explored mid-size motorcycles for India and India like emerging markets. Its model developed in China has a potential to cater to the Indian market,” said one of the several people in the know of the company’s plans.

Earlier this year, Harley partnered with Chinese motorcycle maker, Zhejiang Qianjiang, mother company to Benelli, to launch Benelli 350 and the Harley-Davidson 338. Such kind of a smaller capacity motorcycle will be important for the Milwaukee cult brand which has been seeing slower sales in the country.

Harley’s activist investor backs business reboot strategy

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by Rajesh Kumar Singh from https://www.reuters.com

CHICAGO (Reuters) – An activist investor who shook up Harley-Davidson Inc (HOG.N) earlier this year said he is impressed with the changes initiated by new Chief Executive Jochen Zeitz to turn around the 117-year-old motorcycle company.

Impala Asset Management, the $2.4 billion hedge fund, pushed for the ouster of Zeitz’s predecessor Matt Levatich in January. Months later, it tried to install two directors on Harley’s board, asking for operational fixes to recover its market share in the United States, Europe and Japan.

“For the first time in five to six years, the company is on the right track again,” Bob Bishop, founder and chief investment officer at Impala, told Reuters.

Zeitz, who took the reins in February, is rebooting Harley’s business by shifting the focus back to big bikes, traditional markets like the United States and Europe, and older and wealthier customers.

The new strategy echoes some of the changes Impala has been pushing for. Bishop said Harley should not pursue sales growth at any cost. Instead, it needs to market itself like Ferrari and become an “aspirational” brand, he added.

Bishop does not buy the argument that Harley’s sales in the United States – its biggest market – are suffering because of an aging customer base. He dubbed that an “excuse” to cover the company’s shrinking market share, citing evidence from Europe and Japan where industry sales of motorcycles have been growing despite older demographics.

“When you build up the brand, you will sell more bikes,” Bishop said. “Get rid of this idea that the demographics is killing them.”

Impala bought 1.2 million Harley shares in the quarter through June, increasing its stake to 2.52% from 1.73% in the first quarter of the year.

It also expects an agreement with Harley next month on a new independent board member, Bishop said, as part of an agreement reached in March to settle a board fight.

Under Zeitz, Harley has tightened supplies and cut production, driving up prices for pre-owned bikes, which used to be a drag on new motorcycle sales. It plans to reduce product portfolio and exit lower volume markets, though the company has not specified which ones.

Bishop says models selling below 300 units a year and markets like India and Latin America that have been a “cash drain” could face the axe.

Harley declined to comment.

Robin Farley, an analyst at UBS, reckons the new strategy could shore up Harley’s earnings by saving costs, but would not fix its demand problem. Hopes of higher profit, however, have driven up the company’s shares about 50% since late April when Zeitz first shared his strategy.

Impala expects the restructuring to lift Harley’s earnings to $4 a share next year from $3.36 last year and $5 a share in 2022 even if retail sales remain at 2019 levels.

Analysts surveyed by Refinitiv, on average, expect adjusted earnings of $2.48 per share in 2021 and $2.98 in 2022.

“This is a fundamentally strong company that just lost its way,” Bishop said.

Royal Enfield captures UK motorcycle market with Interceptor, Himalayan

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from https://timesofindia.indiatimes.com

LONDON: Royal Enfield has made deep inroads in the UK market two of its popular and purpose-built motorcycles – Interceptor 650 and Himalayan.

The Royal Enfield Interceptor 650 is the best selling motorcycle in the UK for June 2020 (in the more than 125-cc category) while the Interceptor 650 is the highest selling motorcycle in the UK in the middleweight segment for the last one year (250cc – 750cc; June 2019 to June 2020).

Royal Enfield Interceptor 650 is a commuter bike available in three variants in India priced between Rs 2.65 lakh and 2.85 lakh (ex-showroom).

Royal Enfield Interceptor 650 is powered by 648-cc, double cylinder engine that generates 49 PS of power and 52 Nm of torque. The double cylinder engine of Interceptor 650 has a 6-speed manual gearbox. With both rear and front disk brakes.

The Royal Enfield Himalayan has redefined adventure touring and managed to carve a niche within the adventure-touring segment. Inspired by Royal Enfield’s 60 years of enduring history in its spiritual home – The Himalayas – the motorcycle has been an accessible and engaging option for riding enthusiasts.

Royal Enfield Himalayan generates 26.3 PS of power and 32 Nm of torque from its 411cc engine. It costs between Rs 1.90 lakh and Rs 1.94 lakh (ex-showroom).

Vinod K Dasari, CEO Royal Enfield said “Since its launch, the Interceptor 650 has been gaining momentum among consumers, and has won several awards globally. Dominating the mid-segment in the UK for a year is a truly remarkable achievement that we are very proud of. We are equally delighted with the success of our adventure-tourer Himalayan which has been among the top 5 best selling middle-weight motorcycles in the UK consistently over the last 12 months. This response from our customers in the UK has propelled Royal Enfield to become one of the fastest-growing motorcycle brands in the UK.”

The Travelers Bikernet Weekly News for July 23, 2020

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Alerts and News that Will Blow Your Mind!

Hey,

This coming week is going to be a strange one. I know the whole world is trying to grapple with this Covid mess, while I hide out in the Badlands surrounded by peace and nirvana, deer and pine trees.

We are still two weeks from the rally, but tourist and bikers are everywhere. This morning five of our bikes are being delivered to the Bikernet Covid Hide-Out in the Badlands by Haul Bikes. I’ve got the shop set up and ready for minor repairs and already have a brazing project on the bench, maybe two.

Every day is exciting when it involves motorcycles. My grandson is trying to coerce a couple of buddies to ride from LA to Sturgis to escape the madness and mayhem. It’s interesting. When we need fresh air, fresh outlooks, or new adventures, just mount up and ride. Let’s hit the news.

The Bikernet Weekly News is sponsored in part by companies who also dig Freedom including: Cycle Source Magazine, the MRF, Las Vegas Bikefest, Iron Trader News, ChopperTown, BorntoRide.com and the Sturgis Motorcycle Museum. Most recently Quick Throttle Magazine came on board.

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Harley-Davidson Racks Up Buy Ratings on Bets New CEO Can Turn Things Around

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by Christiana Sciaudone from https://www.investing.com/

Harley-Davidson (NYSE:HOG) has swayed yet another analyst that a turnaround will bear fruit.

Shares are up 4.5% on Wednesday after UBS followed BMO Capital in upgrading the motorcycle maker. UBS bumped its rating to buy from neutral and gave Harley-Davidson a price target of $31, Seeking Alpha reported. The average price target of analysts tracked by Investing.com is $26.75. The stock has seven buys, 10 holds and one sell. It was trading around $28.60 during the morning session.

On Tuesday, BMO raised HOG to outperform from market perform and boosted its price target to $33 from $23, MarketWatch reported.

New Chief Executive Officer Jochen Zeitz, named in May, is expected to drive much-needed change at the company.

Shares are trading at a price-to-earnings ratio of 11, versus 16 for the average long-term ratio of the Dow Jones, according to data compiled by Investing.com and Zacks Investment Research.

Last week, Harley-Davidson said it would cut 700 positions across global operations, with about 500 expected to exit in 2020. The chief financial officer also exited the company at the time. Harley-Davidson said it is overhauling its global operating model to become a “leaner, more nimble” organization.

Harley-Davidson’s stock surges toward a 4-month high after Morgan Stanley raises rating, price target

by Tomi Kilgore from https://www.marketwatch.com

Shares of Harley-Davidson Inc. HOG, +5.51% shot up 4.8% toward a four-month high in morning trading Wednesday, after UBS analyst Robin Farley turned bullish on the motorcycle maker, citing an upbeat outlook on margins over the next couple years. Farley raised his rating to buy, after being neutral for at least the past three years, and raised his stock price target to $31 from $24. He said he believes Harley could help boost margins by eliminating growth initiatives, as they were losing money, even if demand problems continue. “We believe [Harley] has room to reduce its shipment base and actually raise earnings, because of bike sales that currently detract from the bottom line,” Farley wrote in a note to clients. “Harley was losing money pursuing those [growth] initiatives because we believe they don’t have clear avenues for growth,” Farley wrote. The stock’s rally comes a day after it surged 5.6%, after BMO Capital’s Gerrick Johnson turned bullish, and lifted his price target to a Street high $33. Harley’s stock, which is headed toward the highest close since March 4, has soared 55.7% over the past three months, while the S&P 500 SPX, +0.90% has advanced 15.7%.

Harley-Davidson Rallies on BMO Upgrade, Expected Turnaround

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by Christiana Sciaudone from https://www.investing.com

Harley-Davidson (NYSE:HOG) shares rose 5% after an upgrade by BMO Capital.

HOG was raised to outperform from market perform by analyst Gerrick Johnson, who also boosted his price target to $33 from $23, MarketWatch reported. The average price target is $26.75, while the highest is $34, according to data compiled by Investing.com. The stock was trading around $27.28 on Tuesday.

Johnson is more positive on the motorcycle maker thanks to management changes and the “high level of credibility” that Chief Executive Officer Jochen Zeitz has brought to the company.

While retail sales may not recover quickly, key metrics like used bike prices and dealer inventory levels should improve, showing proof of a turnaround, MarketWatch quoted Johnson as saying.

Last week, Harley-Davidson said it would cut 700 positions across global operations, with about 500 expected to exit in 2020. The company said it is overhauling its global operating model to become a “leaner, more nimble” organization.

HOG has seven buy ratings, 10 holds and one sell, according to data compiled by Investing.com.

Harley-Davidson’s stock surges after BMO Capital upgrades, raises price target to highest in the Street

by Tomi Kilgore from https://www.marketwatch.com

Shares of Harley-Davidson Inc. HOG, +5.55% hiked up 3.4% in premarket trading Tuesday, after BMO Capital’s Gerrick Johnson became the most bullish analyst covering the motorcycle maker following an upgrade and price target boost. Johnson raised his rating to outperform from market perform and lifted his stock price target to $33, which is 27% above Monday’s closing price of $25.92, from $23. His target is now the highest of the 19 analysts surveyed by FactSet. Johnson said he’s more positive on the company after recent management changes, as new Chief Executive Jochen Zeitz has brought in “a high level of credibility” that investors have embraced. “As strategic changes are implemented over the next several quarters retail sales may struggle, but other key metrics, such as used bike prices and dealer inventory levels, should improve, providing ‘evidence’ the turnaround is taking hold,” Johnson wrote in a note to clients. The stock has run up 34.0% over the past three months through Monday, while the S&P 500 SPX, +1.34% has gained 10.9%.

Motorcycles Sales Bounce Back Post Pandemic Slump

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by Sabrina Giacomini from https://www.rideapart.com

Rising from the ashes.

To say that 2020 has been an eventful year so far is an understatement. “2020, written by Stephen King” is probably the best description of this year’s events we found so far. Of course, with a pandemic forcing most of the global population into lockdown, the health crisis was bound to have an impact on the motorcycle industry.

For several manufacturers, between suspended production and customers shying away from the dealers, the months of April and May 2020 have been challenging to say the least. Thankfully, with life gradually resuming, so are sales, and the numbers are bouncing back.

Things Are Going Better Than Expected:

An increasing number of people and publications suggest that the pandemic will encourage more people to turn to motorcycles and scooters for transportation—the perfect type of commuter for social distancing.

In the U.S., buyers didn’t waste any time running for the hills—literally—as soon as COVID-19 poked its ugly head. Honda, BMW, Suzuki, and Yamaha’s North American branches reported that sales are thriving since the beginning of the year, particularly in the off-road segment. For instance, American Honda Motor Co. confirmed that motorcycle sales for May 2020 have more than doubled over May 2019—both in the road and off-road segments (+103% and +172% respectively). For BMW North America, while official sales numbers were not disclosed, the spokesperson did say that May 2020 sales were far exceeding last year’s.

The European market is showing a similar, positive trend. Italian sales numbers for June 2020 show a 37-percent increase over June 2019—not even over the catastrophic month of May 2020. More bikes and scooters sold in Italy post-pandemic than last year, back when nobody had even heard of a coronavirus. A total of 39,085 motorcycles, scooters, and mopeds have been registered in Italy in June.

The market is also on the mend in India where local branches are finally seeing the light at the end of the tunnel. Though the June sales numbers remain significantly below the 2019 numbers, they are on the rise after the May 2020 slump. For Honda Motorcycle & Scooter India, the 210,879 units moved in June represent a 153 percent increase in sales over May. For Hero, sales increased by a staggering 300 percent between the two months. Royal Enfield is also back in the green with a total of 38,065 motorcycles sold in June versus 18,429 in May.

Despite a rocky start to 2020, it looks like the motorcycle industry is faring far better than we initially anticipated.

NCOM Biker Newsbytes June 2020

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Compiled & Edited by Bill Bish

QUOTABLE QUOTE: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

~ Sun Tzu (544-496 BC), Chinese Military Strategist, authored “The Art of War”

ABOUT AIM / NCOM: The National Coalition of Motorcyclists (NCOM) is a nationwide motorcyclists rights organization serving over 2,000 NCOM Member Groups throughout the United States, with all services fully-funded through Aid to Injured Motorcyclist (AIM) Attorneys available in each state who donate a portion of their legal fees from motorcycle accidents back into the NCOM Network of Biker Services (www.ON-A-BIKE.com / 800-ON-A-BIKE).

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The Escape Bikernet Weekly News for June 18, 2020

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It’s Crazy but We Will Survive

Hey,

Another wonderful day in paradise. I joke about the adage from the India-based movie “The Best Exotic Marigold Hotel.” Great flick: Everything will be all right in the end. If it’s not all right, it’s not the end. Think about that anytime you’re in a jam. Think about it, when strange shit is happening in your hood, in the country or in the industry.

Harley seems to be struggling, but I look at it as a transition. And everything will be cool, when they come out of it. I’ve spoken to shop owners all over the country about the times. Here’s a good one. “We had a slow week when the Covid hit,” said Randy Aron of Cycle Visions in San Diego. “Ever since then we’ve been cooking.”

So, keep smiling, riding free and rockin’ the world. Let’s hit the news.

Get ready to ride and never stop, goddammit!

–Bandit

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Harley-Davidson To Drop From S&P 500 As Coronavirus Batters Struggling Motorcycle Maker

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by Bill Roberson from https://www.forbes.com/

Iconic American motorcycle maker Harley-Davidson [HOG] continues to struggle. The company will move off the S&P 500 in the next week and will land on Standard and Poor’s MidCap 400 list of stocks instead, according to the Milwaukee Journal Sentinel. Clothier Nordstrom Inc. and Alliance Data Systems Corp. will also fall off the S&P 500.

With a two-month work stoppage (since resumed) due to the pandemic coupled with an expected deep dive in sales due to the general halt in economic activity, the near future could be a rough ride. The most recent report on sales from the company show the numbers were down close to 18% year over year as of late April.

The S&P 500 delisting, set for June 22, comes while Harley-Davidson continues to navigate rough waters, including a personnel shuffle that included the CEO and a stock price that has hung in the $25 range during the pandemic but was as high as $73 in 2014 and over $40 per share in the last year. In the depths of virus-fueled market turmoil in April of this year, the share price dipped to nearly $15 but has since rebounded, almost reaching $30 just about a week ago. The drop from the index could hurt the stock price since many investors include companies in the S&P 500 as part of their portfolios.

Before the coronavirus and COVID-19 outbreak, the Milwaukee,Wisconsin-based maker of heavyweight cruisers – and a fully electric model – had been on a sales and stock price slide for several years as the company searched for new buyers. Their core – and highly loyal – customer base has slowly eroded due to age and competition, notably from a resurgent Indian, which was once Harley’s main sales and racing competitor before shuttering post-WWII. The brand was recently revived by outdoor recreation equipment Polaris and has targeted Harley’s market while also attracting new riders with their Scout and FTR models.

Under the tenure of now-departed CEO Mark Levatich, Harley embarked on a risky tangent into the world of electric vehicles and debuted the all-electric LiveWire motorcycle two years ago. While the bike has received favorable reviews, a price tag near $30,000 has been a tough sell while pioneers in the electric motorcycle space like Zero sell models with similar performance for nearly a third less. Before Levatich left the Motor Company, as Harley is also known, the CEO said more electric models, including bicycles, were on the way. New CEO Jochen Zeitz, a longtime board member known as a turnaround specialist, hasn’t yet laid out the specifics for Harley’s future, saying he plans to “rewire” the company with a 5-year plan for growth.

Part of Harley’s current conundrum is a perfect storm of a waning traditional customer base, expensive motorcycles, and young people who have high debt, myriad transportation options and little brand loyalty. Harley-Davidson has been working to build their international markets over the years and growth there has been a strong point along with their finance arm, but slumping overall sales have driven the company’s market cap to under $4 billion, or nearly half of what the S&P 500 regards as a minimum to make the list.

Tyler Technologies Inc., Bio-Rad Laboratories Inc. and Teledyne Technologies Inc. will all join the index, according to the Milwaukee Journal Sentinel.