Strong American Dollar Hurting Harley-Davidson

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Who would’ve thought that a strengthening U.S. economy would hurt an American icon like Harley-Davidson, but it is. Because the company sells internationally, it has to deal with the American dollar costing foreign buyers more money to purchase, fundamentally raising the price of the product overseas.

How bad is the problem? Had the dollar stayed flat last quarter, Harley-Davidson wouldn’t have seen the 3% loss in sales that they actually saw. That’s a significant amount for any corporation, especially for one so heavily invested in the United States and manufacturing here.

Competitors from Europe and Japan are seizing this opportunity to start a price war, dropping the prices of their offerings (and cutting into their profit per bike), to lure even more buyers away from Harley-Davidson. In their home countries, where the currency remains the same, those same companies are seeing sales soar as well, thanks in part to the more expensive dollar.

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Without getting into currency manipulation, the long story short is that Harley-Davidson is hurting due to a more expensive dollar. Their new boss, Matt Levatich, isn’t giving into shareholder pressure to make drastic changes, but is taking a long view and riding out the storm.

Ultimately, being a publicly-traded company means they need to be responsible to shareholders first, and if things keep going the way that they are, HOG might have to start producing bikes in the countries they want to sell in to help control costs.

What do you think? Let us know in the forums!

Chad Kirchner is a longtime automotive journalist who covers Ford news and auto reviews for Ford Truck Enthusiasts and F-150 Online. He is also a regular contributor to Corvette Forum, among other auto sites. Kirchner is the Editor-in-Chief of Future Motoring and the host of its podcast.

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