After Harley-Davidson’s retail sales increased “in roughly the mid-teens range in January/February,” March saw similar gains, according to a research note provided to Powersports Business Monday by RBC Capital Markets analyst Ed Aaron.
“We believe accelerating growth trends continued in the month of March, which accounts for about half of Q1 sales and is the first big selling month of the year,” Aaron said in the report. “We now estimate upper-teens U.S. retail growth for Q1 as a whole.”
And while the early spring weather has factored into Harley-Davidson’s retail sales growth, “dealer checks suggest more than just a weather benefit. Growth rates were strongest in the more weather-sensitive northern markets, but we also observed notable strength in less seasonal markets like Florida, Texas and California. The clear majority of dealers indicate that both traffic and conversion rates are much better than they’ve seen in the recent past.”
Aaron also notes that after “rising for at least four years, we believe the [ratio of used-to-new bikes] crested in late 2011 and is now moving in the opposite direction. Dealers consistently indicated to us that limited supply and firm pricing of used bikes is driving a better value proposition for new bike sales. … We believe the gap between new and used pricing has, for the first time this cycle, narrowed to a level that supports a richer mix of new bike sales.”