Please ensure Javascript is enabled for purposes of website accessibility

Why Harley-Davidson Stock Is Falling Again Today

By Rich Duprey – Updated May 29, 2020 at 11:37AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Exclusivity is fine, until someone offers a great deal on a slightly used motorcycle.

What happened

Shares of Harley-Davidson (HOG -0.87%) opened lower on Friday, a day after analysts expressed concern over lower used-motorcycle prices weighing on sales. At 11:30 a.m. EDT today, the stock was down 7.2%.

So what

The conflict between new bike sales and used bikes has been a pernicious problem for Harley for some time now, though prior to the COVID-19 pandemic it had been easing. Because its motorcycles carry a premium price tag, being able to get a good deal on a motorcycle just a couple of years old will suppress sales further.

Motorcycles in a line

Image source: Getty Images.

Now what

Used motorcycle prices undoubtedly play a role in new CEO Jochen Zeitz's plan to make new Harley-Davidson bikes more difficult to come by. 

Although details are scarce at the moment, the idea is for the bike maker to reduce production to create an air of exclusivity by tightening availability. There was a time a number of years ago when bike buyers had to wait months to get their new Harley-Davidson, but the company decided to lean into the outsize demand and ramped up production. 

That worked well until the financial markets collapsed in 2007 and its core customers subsequently began aging out of the market. Now it's trying to manufacture demand, though it could just end up hurting sales and profits. 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Harley-Davidson Stock Quote
$35.78 (-0.87%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.