Customers have deposits on 50 percent of LiveWire dealer allocations: analyst

About 100 Harley-Davidson dealerships in the U.S. will be carrying LiveWire, Harley-Davidson's new electric motorcycle, upon launch at the end of August, according to a research note provided to Powersports Business by BMO Capital Markets analyst Gerrick Johnson.

Johnson reports that initial “allocations appear to be under five per dealer, with more to follow in later waves. In our research, we are finding that about 50 percent of the initial allocations currently have customer deposits on them.”

Johnson adds that “owning mostly to poor weather conditions in the spring, we are lowering our 2Q19 US retail estimate to -2% from +0.9% (-3% from flat ex Street recall shift). We are not making any changes to our EPS estimates at this time.”

The recent Powersports Business/BMO Capital Markets Q2 Dealer Survey found that 70 percent of Harley-Davidson dealers mentioned that weather had adversely affected sales in the second quarter.

Here are some other interesting nuggets from Johnson’s research note:

“The inventory position at Harley-Davidson dealerships is very low. We estimate field inventory is down -8% yoy (-14% on new). This jibes with the company’s 2Q guidance for shipments to be down -9% to -17%.

“Our check of NADA Guides shows used Harley prices have steadily dropped through the spring. After some initial firming in January (+2.5% compared with December), prices have dropped -6% since then.

“We think HOG's ‘Own the Dream’ marketing campaign, which highlights the monthly cost to purchase a Harley-Davidson motorcycle rather than its sticker price or financing rate, is spot on. Harley-Davidson motorcycles don't seem so out of reach at $124 per month.”

LiveWire 2018


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