Harley-Davidson Profits Hurting With Chip Shortage; Swelling Costs
Harley-Davidson attributes lower profits in 2022 to the global chip shortage and rising costs.
CEO Jochen Zeitz stated that the global supply chain issues plaguing other major manufacturers is affecting Harley-Davidson as well.
According to Reuters, the motor company posted that shares were down 1.2 percent as of April 27. H-D saw an increase in sales figures, given consistent demand with rising prices
Despite posting a decreased share value at the New York Stock Exchange (NYSE) for Q1, H-D’s sales figures improved. It attributes the 6 percent bump (to about $1.3 billion) to consistent demand for the motorcycles as well as a parts and accessories uptick of 11 percent growth.
Shortages
Although getting materials is difficult, H-D continues to sell bikes, but it could potentially be a problem.
In addition to an overall sales figure and parts sales bump, the Motor Company said that new bikes don’t sit in showrooms very long. Chief Financial Officer Gina Goetter told Reuters that dealerships are selling bikes quickly. “On average, a bike is sitting on the showroom floor in the U.S. for less than two weeks,” said Goetter, in a recent press statement.
Also, Goetter went on to say that the decrease in idle time marked a huge improvement over last year. However, given the current backlog of orders for motorcycles, dealers and consumers could soon feel the squeeze of supply issues. So it could become difficult to keep up with demand like the new “Further, Faster” billed motorcycle lineup.
What Is next for Harley-Davidson?
Zeitz told Reuters that the MoCo is ready for Q2. “We are cautiously optimistic on improvements in the supply chain environment in the second half of the year. However, this remains difficult to predict with certainty,” said Zeitz.
Despite Harley-Davidson’s reported optimism, the global supply chain issues are not yet resolved, which makes automotive sales difficult. Furthermore, the semiconductor chip shortage is ongoing, and the Wall Street Journal predicts that it isn’t going to ease anytime soon.
Photos: Harley-Davidson