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Harley-Davidson Rejected By New Generation

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Are the youngsters in U.S. think that Harley bikes are for old guys? The statistics show that the millennials are finding it difficult to identify Harley-Davidson bikes with their speed-loving lifestyle. At the same time those generations looked for comfort in long rides are fast diminishing.

When the legendary bike celebrates its 115 years of flat-track racing, hill climbs and drag racing, the new-gen riders in U.S. are looking for speed and foreign brands.

The company has announced a manufacturing optimization and consolidation of its motorcycle assembly plant in Kansas City, Mo. into its plant in York, Pa. The restructuring and consolidation is expected to cost $170 to $200 million and capital investment of approximately $75 million over the next two years. Harley-Davidson projects ongoing annual cash savings of $65 to $75 million by 2020.

For the fourth quarter, the U.S. sales for Harley motorcycles declined 11.1 percent to 23,195 from 26,077 in the prior year. The U.S. market share was 50.8 percent in the 601+CC segment.

Latin America sales recorded a decline of 7.1 percent to 2,449, EMEA reported 5.5 percent drop in sales to 7460 bikes, while Asia Pacific sales were down 11.8 percent to 7,720 from 8748 in the same period last year. The company said its fourth quarter International sales were 18,947, down 7.7 percent from 20,533. Worldwide sales totaled 42,142, compared to 46,610 in the previous year.

Adding a positive note, the motorcycle shipments for the fourth quarter climbed 11.3 percent 47,198 from 42,414 last year. Operating margin percent were on the higher side up 2.6 points to 3.6 percent, compared to 1.0 percent a year ago.

The company reported a sharp fall in fourth quarter profit to 8.3 million or $0.05 per share from $$47.179 million or $0.27 per share.

Revenue increase for the fourth quarter was 2.4 percent to $181,883 million from $177.577 million in the same period last year.

Looking ahead the Harley-Davidson is projecting full year motorcycle shipments in a range of 231,000 to 236,000 and first quarter 2018 shipment of around 60,000 to 65,000 motorcycles. Operating margin as a percent of revenue for the full year 2018 is projected to improve by 9.5 to 10.5 percent.

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