KTM rosy while Harley tells it warts and all
KTM, in its mid-year update, has painted a financial picture that’s almost too good to be true. Pierer Mobility, with KTM, Husqvarna, and GasGas brands under its umbrella, claimed that in the first six months of 2020 it experienced a sales decline of just eight per cent compared with last year.
That would be a fair amount better than any of the other manufacturers, two-or four-wheeled, can claim. And indeed, sales of Indian partner, Bajaj, were down almost 40 per cent to date this year.
But Bajaj is only a minor part of KTM’s business. The group reports that in the first six months of the year, it sold 124,692 units. However, the breakdown shows that almost 35,000 of those were e-bike sales.
Removing them from the sum total, and actual motorcycle sales were just over 90,000 units globally for the half year. Compared with the same period last year, that’s a 33 per cent drop, in line with other bike makers.
A case of accounting that’s really rather too creative? E-bikes are not motorbikes. Perhaps motobikes, but not motorcycles. What the company was trying to do, in vain, was avoid posting their first sales decline in nine years. In light of what’s going on in the world, a decline in sales is the norm. Posting a rosy picture in the face of a global pandemic simply alerts the business world to an irregularity.
The more realistic 33 per cent decline in sales makes the second quarter report from Harley Davidson appear not so grim. Sales are down across the globe for the Bar and Shield brand, slumping by 27 per cent, both at home and abroad. Half year sales were off by 22 per cent in the US, and 23 per cent for the rest of the world. Revenue was down by 28 per cent for the year. Because it is undergoing a restructuring, this led to a $US92m loss in Q2 net income, and a $23m loss for the first six months of the year.
Jochen Zeitz, Chairman, President, and CEO of Harley-Davidson commented “We have made significant progress toward the goals of The Rewire. “We are now working on our new five-year strategic plan, The Hardwire, which will be grounded in enhancing the desirability of our brand and protecting the value of our iconic products.”