A flash of warm weather should be heating up motorcycle sales now, but the effect of coronavirus on the economy has kept buyers out of dealerships.
In the U.S., some Harley-Davidson dealers reported very slow business in the second half of March, according to a survey released Wednesday by analyst Robin Farley with UBS Investment Research.
The world’s largest manufacturer of heavyweight motorcycles continued to ban its dealers from selling bikes online, she said, although “they have now looked the other way to let dealers sell parts and accessories online.”
Harley isn’t offering many sales promotions now, Farley said, which isn’t surprising given that scores of dealerships are temporarily closed anyway.
With a few exceptions, dealers won’t be getting additional model-year 2020 bikes, according to Farley, as the company has suspended manufacturing and placed most of its factory employees on temporary layoff.
Many riding events have been canceled, including the Myrtle Beach Bike Rally, in South Carolina, that usually kicks off the riding season in May for thousands of motorcyclists.
In the Milwaukee area, some spring, and even summer, events are still up in the air.
“I am a positive thinker, so I want to believe that our rally in July will happen … but we’ve got to be realistic about it. There’s a chance it could be postponed,” said Todd Berlin, general manager of Suburban Harley-Davidson in Thiensville.
“We are not going to hold a rally that would put our customers at risk,” Berlin said.
At this point it’s impossible to say whether dealerships will be able to fully recover from the effect of coronavirus on motorcycle sales.
“We are just trying to get through to the other side,” Berlin said.
Suburban is the largest Harley dealer in Wisconsin, by sales volume, and its doors are still open with limited hours. Mostly, Berlin said, the dealership is focused on service work now and helping customers get their bikes ready for spring.
“We always have a sales person here, but honestly they are now doing other jobs as well. Pretty much all of our employees are cross-trained to work in other departments,” Berlin said.
“My older sales people who are more susceptible (to COVID-19) are at home for their own protection. Our owner is most concerned about the health of our customers and employees,” he added.
At least half of Harley-Davidson’s U.S. dealerships are probably temporarily closed now, according to Farley. It’s even worse in Europe where motorcycle sales have plummeted from coronavirus.
Dealerships without a mortgage or heavy debt are probably best positioned to survive what’s likely to be one of the worst years for motorcycle sales since the Great Recession of 2008-’09.
“There is no playbook for this. That’s the crazy thing,” Berlin said. “I know the economy is going to recover, but I don’t know what it’s going to look like on the other side.”
None of this comes at a good time for Harley-Davidson, which saw its bike sales in the U.S. drop for a fifth straight year in 2019 and its global motorcycle shipments at the lowest level in a decade.
“The new model year usually begins in July or August, so Harley still probably expects to be back to manufacturing ahead of that,” Farley said. “But dealers will focus on selling what they already have.”
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