Categories Consumer, Earnings, U.S. Markets News

Harley-Davidson set to woo Chinese customers with small bike

Harley-Davidson (NYSE: HOG) is the latest American automaker to expand China operations in a big way to enhance growth. Joining General Motors (GM) and Tesla (TSLA), the popular auto brands currently ramping up their presence in China, Harley-Davidson this week entered into a partnership with a China-based firm to manufacture a small-sized bike for that market.

The company is apparently trying to overcome the slowing demand in the local market and headwinds from the ongoing US-China trade war, which escalated recently. It has also been burdened by the heavy tariffs in Europe. The move complements the management’s strategy to increase the share of units sold in the overseas market to about 50% in the next eight years.

The company is trying to overcome the slowing demand in the local market and headwinds from the ongoing US-China trade war

The Milwaukee, Wisconsin-based superbike maker had a dismal show in the first quarter when earnings and revenues dropped in double-digits, due to a sharp fall in the demand for the popular models. The decline in sales across all geographical regions points to the need for the company to revisit its strategy for the international market.

The company Wednesday said it has teamed up with Qianjiang Motorcycle Company to manufacture a mall motorbike, which is expected to hit the road next year. Qianjiang is owned by China-based Geely, which holds major stakes in global brands like Daimler AG.

Related: Harley-Davidson Q1 2019 Earnings Call Transcript

The displacement of the new bike will be below 350 cubic centimeters, nearly half of the capacity of standard motorcycles sold in the US. The management is encouraged by the sharp rise in sales in the Asian country last year.

The other countries where Harley-Davidson is increasing capacity are Thailand and Australia. Facing criticism from President Donald Trump for moving production outside the country, the company recently assured that all bikes sold in the US will be manufactured locally.

The slowdown in sales is visible in the performance of the company’s stock, which is currently trading a near-ten-year low. Since last year, the shares lost 20%.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

Coca-Cola (KO) Q1 2021 earnings release

The Coca-Cola Company (NYSE: KO) reported first-quarter 2021 financial results before the regular market hours on Monday. The beverage manufacturer reported fourth-quarter revenue of $9 billion, up 5% year-over-year. The

Earnings calendar for the week of April 19

The market rally gathered pace this week amid impressive quarterly results, led by the banking sector, and positive economic data. Leading stock indexes continued their winning streak, with S&P 500

Undeterred by crisis, Bank of America stays in expansion mode

Leading Wall Street banks recorded robust earnings in the early months of fiscal 2021 with the results benefiting from the release of credit loss reserves, in most cases. Taking advantage

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top