Harley-Davidson’s model year 2016 “innovation focused on Custom and/or Sportster should reverse market share losses,” Wells Fargo Securities analyst Tim Conder reports in a research note provided to Powersports Business.
The “need to refresh Sportster and Custom product lines … is resulting in Harley’s exposure to competitive discounting and losing net share. As seen since 2008, companies that (1) control channel inventory and (2) innovate, gain share versus those competing primarily via price (e.g., HOG and PII vs. Japanese competitors). However, when innovation is lacking, price discounting wins. Harley appears to be taking the necessary steps to control channel inventories (Q215 production cuts) ahead of likely meaningful model year 2016 (impacting retail September 2015) Sportster and Custom product family innovation.
“Until then, HOG will likely see ongoing net U.S. share losses from Sportster and Custom offsetting Touring and Street gains.”