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Harley-Davidson to close Kansas City plant as sales slump

01 February 2018

Harley-Davidson is close a plant in Kansas City, Missouri, after its motorcycle shipments fell to their lowest level in six years. This stands in stark contrast to the deepening slump in US motorcycle demand, with industry retail sales down 6.5 percent in the fourth quarter of 2017; Harley sales fell 11 percent in the fourth quarter and 8.5 percent for the year, according to numbers released on the call.

John Olin, Harley chief financial officer, said the company would be increasing its investment in electric motorcycles by $25 million to $50 million annually for the next several years. The move is expected to lead to ongoing annual savings of $65 million to $75 million after 2020.

'The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment, ' President and CEO Matt Levatich said.

The Kansas City plant is home to Harley's vehicle and powertrain operations, assembling all Dyna, Sportster and VRSC motorcycles, and manufacturing powertrains for V-Rod bikes.

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An ageing customer isn't a bad thing: he or she can afford Harley's expensive, profitable bikes. Harley-Davidson is one of the brands feeling the pinch as older riders leave the sport and new riders aren't replacing them. It had only a 50-mile range and could reach 60 miles per hour in 4 seconds.

The new motorcycle has not yet been publicly named.

The announcement accompanied news of additional job cuts and a plant closure at the Milwaukee-based company.

Research shows sales of Harley-Davidson motorcycles are falling due to a generational gap. Having ridden the prototype bike, called Project Livewire, Hoyer said he expects Harley-Davidson will deliver a quality product.

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Sales of Harley bikes have fallen on every continent, and Harley-Davidson sees more pain ahead, projecting that global sales will fall up to 4.9 percent more in 2018 after dropping 6.7 percent in 2017.

Harley-Davidson, that supremely American bastion of two-wheeled culture, is building a production electric motorcycle based on its excellent LiveWire concept from 2014 and we're stoked because it's supposed to hit dealers this year.

The California company Zero Motorcycles already offers electric motorcycles. The industry is struggling to attract new riders.

The company is also closing a plant in Adelaide, Australia, but it is opening one in Thailand.

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"We actually feel more strongly about our objectives", Levatich said when asked if the company's performance had caused executives to question their plans.

Harley-Davidson to close Kansas City plant as sales slump