Why Harley Davidson is terrified by the strong dollar

April 22, 2015, 3:03 PM UTC
Harley-Davidson Jumps Most Since 2011 as Profit Tops Estimates
Harley-Davidson motorcycles sit on display at the Starved Rock Harley-Davidson dealership in Ottawa, Illinois, U.S., on Tuesday, April 22, 2014. Harley-Davidson Inc. rose the most in almost 18 months after reporting first-quarter profit that topped analysts' estimates as retail sales of motorcycles increased. Photographer: Daniel Acker/Bloomberg via Getty Images
Photograph by Daniel Acker — Bloomberg/Getty Images

The strong performance of the U.S. dollar is allowing foreign motorcycle manufacturers to offer steep discounts, hurting iconic American brand Harley Davidson (HOG).

Harley’s market share in the first quarter fell five percentage points to 51.3% in the first quarter, reported Reuters.

From Reuters:

Honda Motor Co Ltd and Suzuki Motor Corp both currently offer $1,000 cash back on selected models. Suzuki has cut the suggested retail price on 13 models and Honda is offering low-interest financing.

Harley says it will not compete on price to protect its brand, a declaration welcomed by industry analysts.

“They (Harley) are taking a reasonable long-term view of the market,” said Michael Millman, founder of Millman Research Associates in New Jersey. “They want to maintain their pricing and their image and will have to take some of the competitive knocks that go with that.”

Harley also reported earnings per diluted share of $1.27 yesterday, along with net income of $269.9 million.