Harley-Davidson profits slump 45% as coronavirus bites hard

Harley-Davidson announces its profits plunged by 45% during the 2020 Q1 period but is bracing for worse as the coronavirus shutdown prepares to bite in Q2

Harley-Davidson LiveWire

Harley-Davidson has reported another large drop in sales and profits during the first quarter of the year as it is forced to rearrange its business to contend with the coronavirus amid already difficult times.

The storied American marque has been beset by numerous woes over the past couple of years, as typified by the firm revealing in February it had shifted 125,995 motorcycles during 2019, compared with 160,400 as recently as 2012 to represent a seven-year decline totalling 22%.

However, it is now bracing for an even tougher 2020 as the loss of business as a direct result of the shutdown initiated by the COVID-19 coronavirus piles more pressure on the beleaguered brand.

This week Harley-Davidson revealed sales had fallen a further 18% during the first quarter of 2020 compared with the same period in 2019, a figure represented by profits sliding from $128m to $70m (45%).

However, given the American slowdowns caused by coronavirus only kicked in during the final stages of Q1, it’s likely the figures for Q2 will be even worse.

The latest blow – which now represents a sales fall in 21 of the last 22 quarters - comes at a precarious time for Harley-Davidson as it looks to revive its fortunes on the global stage. In March the Mike Levatich officially stepped down as President and CEO, with Jochen Zeitz taking the interim position.

He says it will be important for Harley-Davidson to be ‘agile’ and warned of widespread cost-cuts to weather the coronavirus storm.

“Covid-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality,” read a statement.

“We have determined that we need to make significant changes to the company; to our priorities, to our operating model and to our strategy to drive more consistent performance as we emerge from this crisis.”