Harley-Davidson, Inc.’s shares took a nosedive to add to a low point after over a year, after the famed motorcycle maker reportedly shortened off its forecast of annual shipments for the coming full year. The shipments have been cut down due to the weakening demand for Harley Davidson choppers. The demand for motorcycles overall has been declining as the baby-boomer era comes to an end and the millennial population is showing a very low affinity for motorcycling.
Demand for New Motorcycles Falls Even Further
The globally known motorcycle maker from Milwaukee stated recently that it would have to reduce its production rates by the second half of 2017. This will eventually trickle down to the worker strength of the company, which will be reduced over time, especially in most of the company’s U.S. facilities. The company’s shares fell 9 percent on Tuesday morning trades, landing at US$47.17. The demand for newer motorcycles has declined even further, according to the company, due to the growing number of baby-boomer motorcycle owners trying to sell them off at low prices. With the aging consumer base trying to sell the newer consumers older versions for cheaper, the motorcycle maker has its work cut out for itself.
Downgrades in Market Evaluation to Continue
According to David Beckel, an analyst at Bernstein, Harley-Davidson is likely to be downgraded to “market-performance” based, due to beliefs that the overall demand for newer motorcycles is on a sure path of decline amid a scenario of secular erosion. The Generation Y – or those born in the 80s and early 90s – are showing an extremely low interest in buying motorcycles.