Harley-Davidson is expected to pull out of some Asian and Latin American markets as part off a “Rewire” strategy to streamline operations to meet a global drop in demand.
Reporting on its second-quarter results, CEO John Zeitz announced a five-part Rewire strategy, of which pulling out some markets was a key point.
Harley sales in the past quarter were down 26.6% in the USA, -30.3% in Canada, -29.8% in Europe, -51% and Asia-Pacific -10.2%. The latter includes Australia where sales were down 10.7% while road bike sales were only down 12.7%.
Obviously some Latin American markets will be top priority for the axe, but there are also some underperforming markets in Asia as well.
Jochen says his global market strategy would be “more focused”.
“Major changes include concentrating efforts on the highest priority markets, primarily North America, with the U.S. and Canada, Europe and parts of Asia Pacific, and structuring in a way that shifts resources and marketing into the regions for maximum impact in line with our future strategy,” he says.
“Our new global business structure better aligns our investments with their potential.
“Going forward, we plan to concentrate our efforts on approximately 50 markets, representing the vast majority of our volume and growth potential.
“We’re evaluating plans to exit international markets, where volumes and profitability do not support continued investment.”
I doubt Australia and New Zealand will be cut from their strategy.
Australia has been a particularly healthy market for the company for several years, although it has slumped in the past year.
However, there has been a shift in executive management duties to the Singapore head office.
“We’ve streamlined our regional offices and created the freedom within a clearly defined framework for countries to make decisions to drive their business,” Jochen says.
“These in-market teams will be more agile and better equipped to understand consumer needs, provide focused attention to dealers and respond more quickly to local market conditions. We also plan to optimise our dealer network to provide an improved and integrated customer experience.”