What Happened?
Shares of american motorcycle manufacturing company Harley-Davidson (NYSE: HOG) jumped 2.1% in the morning session after the company confirmed it would not raise the price of its X440 motorcycle in India, even with a new tax.
Harley-Davidson decided to absorb the cost from a revised GST (Goods and Services Tax) framework, which placed motorcycles with engines over 350cc in a higher tax bracket. This move kept the X440's price steady and boosted its competitive edge, especially after a rival bike that shared its platform was taken off the market. The decision underscored the company's focus on the key Indian market, where the X440 has seen strong sales.
Adding to the positive news, reports also surfaced about the company's plans to bring more entry-level models to other emerging markets, like the Philippines, hinting at a broader growth strategy. The company also rolled out its new 2025 Cruiser lineup and a new 2026 Night Rod model, showing it was also refreshing its classic offerings.
After the initial pop the shares cooled down to $29.11, up 1.2% from previous close.
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What Is The Market Telling Us
Harley-Davidson’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 4.1% on the news that its Japanese unit was fined approximately 211 million yen, or $1.4 million, by the country's antitrust watchdog for imposing excessive sales quotas on dealers.
Japan's Fair Trade Commission also issued a cease-and-desist order, finding that the company pressured 38 major dealers with aggressive sales targets since at least early 2023. The company reportedly suggested it would not renew contracts for dealers who failed to meet the goals. This pressure forced some dealers to purchase and register new motorcycles themselves, only to sell them in the secondhand market just to make their numbers. The news surfaced amid wider signs of trouble in the company's relationship with its network, as a recent dealer satisfaction survey placed Harley-Davidson in last place. This underscored a disconnect within its franchise model, adding to the challenges the company faced in Japan, where its sales had already tumbled 27.6%.
Harley-Davidson is down 1.1% since the beginning of the year, and at $29.11 per share, it is trading 26.1% below its 52-week high of $39.37 from September 2024. Investors who bought $1,000 worth of Harley-Davidson’s shares 5 years ago would now be looking at an investment worth $1,250.
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