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Harley riders exchanged more and more "pigs" as the company struggled with a public relations nightmare created when it announced the transfer of part of its production to the US. stranger, said Johnson. The Milwaukee-based manufacturer said it was doing so in response to retaliatory tariffs applied abroad because of Trump's duties on steel and aluminum imports from from other countries.
"While President Trump's assessment of HOG's actions in his tweets was often factually inaccurate, the damage was done," says the BMO report. "Dealers are feeling an impact and we are seeing that the impact has increased over time."
While both companies have been trying to downplay the president's influence on motorcycle sales, Johnson said the impact would probably not be a coincidence. Last August, Trump used his Twitter account to congratulate the company on his transfer of production and appeared to support a boycott that he said was already under way. It is not clear if a boycott has ever started.
"While President Trump's assessment of HOG's actions in his tweets was often factually inaccurate, the damage was caused," Johnson said in a research note. "Dealers are feeling an impact and we are seeing that the impact has increased over time."
Johnson said he was cutting Harley's outperformance shares to perform in the market and raised the target from $ 45 to $ 45, which still implies an 11.5% gain at closing. Thursday. Shares of Harley fell 2% Friday morning, after a decline of 3.1% in Thursday's massive sales. The stock has fallen by just over 20% since the beginning of the year.
CNBC contacted Harley-Davidson for comments. The company publishes its results Tuesday (an earlier version of this story was published Monday).
This is not really a problem with Harley products, said Johnson. He added that the company had continued to put good bikes on the market, but to no avail.
"For the first time in 10 years of motor sports coverage, we have seen a manufacturer develop new innovative products, significantly better than what they replace, without seeing an increase in demand," he said. -he writes.
However, according to the analysis, the company failed to attract the young bikers, partly because of the overestimation of prices, and it mismanaged the public relations around the production movement and the subsequent reaction of Trump. Indian has been successful in attracting young runners, BMO said.
"The overlap between Donald Trump supporters and Harley riders is significant," said Johnson. "So it is disconcerting that the president is calling on these consumers to boycott the brand." In response to the new European tariffs for US motorcycles, HOG may have had good financial intentions, but the way it communicated its strategy was a debacle in public relations. "
Johnson suggested that the company should not have been as public as it had been to announce the move and that it should not have decided to "cram" the company. president by doing it.
The problems this year continue a trend in which Polaris and Indian have managed to gain market share. The company still holds only 7% of the heavyweight brand market, compared to 50% for Harley-Davidson, but claims to hold about 20% of the mid-market market, which is aimed at young bikers.
In addition, Indian sales increased 42 years out of 46 in 42 months, while Harley had only 12 sales during this period.
Since the battle with Trump, Johnson said he found "that a majority of dealerships have the feeling of having lost at least some sales".
"It should be disconcerting for HOG investors that most of the Indian dealerships we are talking to are seeing a slight rise in Harley trading, no matter what the reason," the analyst wrote.
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