Despite a rough week of trading for Harley-Davidson stock last week, area dealers say they’re feeling good heading into the heart of the selling season for motorcycles.
Harley’s stock dropped just over 13 percent for the week after analysts at ITG Research and Longbow Research said the motorcycle maker would have a 7 percent drop in sales for the first quarter and that the Indian motorcycle brand is gaining market share.
Minnesota-based Polaris Industries bought the Indian brand in 2011 and relaunched it in 2013. The brand has made gains in its first few years, nearly doubling revenues from 2014 to 2015, but Harley still occupies most of the market.
Both companies will be reporting first quarter earnings next week with Harley going first on April 19 and Polaris reporting April 21. Harley spokesman Tony Macrito said the company would not be commenting on analyst predictions until its earnings call.
Scott Houpt, general manager of Suburban Motors in Thiensville, said he hasn’t seen the drop predicted by analysts.
“It’s the best three months (to start the year) we’ve ever had,” he said, adding that both new and used products have been doing well.
Robert Moakley, owner of Wisconsin Harley-Davidson in Oconomowoc, said his first quarter sales were off less than a few units from 2015 and he added that he’s learned to not get nervous based on the first quarter, which traditionally has lower sales.
Statewide, registrations of new motorcycles in the first quarter are off 21 percent from 2015 with 1,319 registrations according to the Department of Transportation.
Indian of Metro Milwaukee owner Rob Schopf opened his Muskego dealership in July. He said he was able to end the year with some momentum and the first quarter was good, although not quite where he wanted it.
Schopf acknowledged that being the Indian dealership closest to Milwaukee is a more challenging task.
“I thought in the beginning we had a little more heavy lifting to do,” he said.
He said he has been able to convert some riders from Harleys to Indians. He said the motorcycles have been particularly well received by those who “know motorcycles.”
“They look nostalgic but you can tell they’re modern,” he said, crediting Polaris’ engineering for the success. “Harley hasn’t changed a thing in a long time. I hate to say it, but I’m proud to be selling Indians instead of Harley-Davidsons in this day and age, it’s a better motorcycle”
Schopf noted that just as Harley production and sourcing has a lot of ties to the area, Polaris is drawing on manufacturers in the area and from throughout the Midwest.
He said Polaris has done a good job of creating promotions to help get new people into riding. Schopf held an event on Saturday and has another planned for this weekend, both giving people the opportunity to ride Indian motorcycles.
Getting new people into riding is a central part of Harley’s strategy to increase sales as well. Moakley said the company’s riding academies and free offers for military and first responders to learn to ride are helping.
“We’ve definitely seen some impact on those promotions that they’re driving,” Moakley said. “It’s a good piece of the puzzle moving forward.”
Both Moakley and Houpt agreed that discounting Harley’s, which the company discourages dealers from doing but acknowledged does happen during its last earnings call, is not worthwhile.
“That’s a race to the bottom and nobody wins on that,” Moakley said, noting that Harley doesn’t have the same volume as large car dealers.
Houpt added: “I’ve seen less discounting in the last two years than I’ve seen in the last 15 years.”
