Reuters is reporting that “Harley-Davidson has taken the rare step of offering rebates on its 2016 motorcycles to U.S. dealers as an incentive for them to shift a backlog that has restricted sales of its latest models.” The report is based on statements from three anonymous Harley dealers and two unnamed analysts.
The rebate is stated to be up to $1,000 on 2016 models and will run through the end of April according to the Reuters’ report. Though the practice is something Harley’s competitors frequently incorporate, The Motor Company generally takes a staunch stance against the practice. But a strong dollar has actually been working against Harley as it lowers the price of motorcycles from competitors abroad and reduces profits on motorcycles Harley ships oversees. There’s also been strong competition internally from Polaris Industries whose Indian Motorcycle brand has been cutting into Harley-Davidson sales.
Harley-Davidson’s First Quarter 2017 report corroborates the Reuters’ report as 2017 motorcycle shipments have been reduced to 70,831 in the first quarter, a 14.7% reduction compared to the 83,036 it shipped in the first quarter of 2016. “This decision helped dealers focus on selling down their model year 2016 retail inventory,” states the financial report. The First Quarter 2017 statement also shows that retail motorcycle sales in the U.S. were down 5.7% compared to the year-ago quarter.
The Reuters’ report claims that two of the three dealers who confirmed the story said they had never been offered a rebate before.
One Harley dealer in a western state reportedly told Reuters’ “It’s not normal. Usually, any incentives are customer-facing.”