Amid Corporate Power Struggle, Harley-Davidson Sales Slump

Harley Riders at Labor Day Parade 2018. Photo by Jack Fennimore.

Harley-Davidson started the year with a double digit sales decline from the start of 2024, as the company navigates a shaky economy and an internal corporate power struggle.

The Milwaukee-based motorcycle company held its first earnings call of the 2025 fiscal year on Thursday, providing more insight into the potential impact of President Donald Trump’s tariffs on the business.

In the first quarter, Harley’s global motorcycle sales were down 21 percent compared to the same period in 2024, with sales in North America down 24 percent and sales to the Asian pacific down 28 percent.

The company says a “volatile macroeconomic environment” and consumer uncertainty drove the sales slump.

“What we are getting back as feedback is that 60 percent of non-owners and roughly half of our existing owners, they feel that the current economic environment is causing them to delay a purchase,” Harley-Davidson Chief Executive Jochen Zeitz said on the call.

But Harley isn’t the only powersports company to face “headwinds” in recent years, said Greg Drevenstedt, editor-in-chief of Rider Magazine. He said the industry took a big hit from the Great Recession of 2008 and never fully recovered.

Powersports sales did see a surge from pent up demand after the pandemic, but inflation has caused a slowdown in more recent years, Drevenstedt said.

“What Harley’s facing in the general powersports industry is no different than what Polaris and Indian are facing, or any of the other non-American brands,” he said. “They’re all still trying to sell recreational products to people when their wallets and budgets are tighter.”

But Drevenstedt also said Harley’s product line is more limited than many of its competitors, who offer dirt bikes or other recreational vehicles in addition to motorcycles.

Despite weak sales to start 2025, Harley still posted a net income of $133 million through the first quarter. That’s down 43 percent, however, from the first quarter of 2024.

While the company says the impact of tariffs was minimal at $9 million in the first quarter of the year, it expects that to balloon starting in the second quarter, according to the earnings presentation.

The company says the net impact of new tariffs in 2025 could be between $130 million to $175 million. That estimate includes the direct exposure of tariffs on Harley-Davidson from importing and exporting products, as well as indirect exposure from suppliers, the company said.

“It’s difficult to predict what policies may impact customers over the course of a year and how consumer confidence will affect discretionary product purchases,” Zeitz said. “We therefore are withdrawing our previous 2025 [financial outlook] until there’s more clarity on the global economy and tariff landscape.”

He also said the company is “cautiously optimistic” that there will be trade deals that will “limit the overall tariff impact on the company and its operations” based on conversations with the federal government and officials in Europe.

As Harley, and other motorcycle companies, work to navigate the uncertain trade environment, it’s also facing an internal power struggle.

Investor group wants to oust three Harley board members

An investor group is trying to gain support from shareholders to remove Zeitz and two others from Harley-Davidson’s Board of Directors at the company’s annual shareholder meeting on May 14.

H Partners Management, which owns around 9 percent of outstanding shares of the company, launched the campaign last month. They argue the company has underperformed under its current leadership.

In addition to calling for the ousting of three board members, the investor group is calling for the board to immediately remove Zietz, who plans to retire this year, from his role as CEO.

“While we hoped to work constructively and in a private manner to resolve these issues with the Board, these long-tenured directors made that impossible,” H Partners said in an April 16 statement.

One of H Partners principals, Jared Dourdeville, joined Harley’s board in 2022. He resigned from the board in early April, citing a lack of transparency, declining dealer profitability and “the cultural depletion of Harley-Davidson.”

“I never thought there would be a point when I felt that I had no choice but to resign from a board due to a fundamental disagreement with that board’s policies or practices,” he wrote.

H Partners did not respond to requests for comment.

Harley: Investor group running a ‘misleading campaign’

In a statement Tuesday, Harley-Davidson said H Partners was running a “misleading campaign” that “jeopardizes” the company’s response to a challenging economic environment.

According to Harley-Davidson, H Partners has had a voice on its board for the last three years through Dourdeville.

The company says Dourdeville supported Zietz as CEO, endorsed management’s execution of the company’s strategic plan, voted for all current board members facing reelection and “actively participated” in the search for Zietz’s replacement as chief executive.

“Just after H Partners’ didn’t get their way when their preferred CEO candidate failed to earn majority Board support — Mr. Dourdeville demanded that one-third of the Board resign, and he himself abruptly resigned from the Board right before a Board meeting to discuss his perspectives,” Harley-Davidson stated.

Harley leadership has faced pushback from dealers, customer base

In some ways, Drevenstedt said the power struggle is the culmination of Harley-Davidson never really finding its stride after the 2008 recession and the COVID-19 pandemic.

Zeitz became Harley’s chief executive in 2020, after previously serving on Harley’s board since 2007.

“But one of the challenges that Jochen Zeitz faces is that he’s German, and he runs one of the most iconic companies in America,” said Drevenstedt. “He doesn’t really have a background in motorcycling, and authenticity is really important to Harley Davidson owners and the dealers that sell those products.”

“There’s been a bit of a mismatch, or a disconnect between leadership at the top and the core customer base,” he added.

Zeitz helped spearhead strategic initiative that emphasized large touring and cruiser bikes. Another program launched under his leadership that received pushback was an online marketplace for used Harley-Davidson motorcycles. It received pushback from dealers who felt cut out of the process, Drevenstedt said.

Zeitz was also criticized for diversity, equity and inclusion initiatives last year, Drevenstedt said. Those initiatives were ultimately rolled back.

“All of 2024 was sort of dealing with that and the backlash and repercussions, and now they entered 2025 and they’ve got this big kind of high profile corporate struggle,” Drevenstedt said.

Regardless of the outcome, Drevenstedt said the next chief executive of Harley-Davidson will have their work cut out for them.

“Harley Davidson will certainly bounce back,” he said. “I think that they’re going to have to figure out how to reprioritize, in terms of being good to their customers and their dealers, what’s always been the lifeblood of the company.”

Harley-Davidson starts the year with sales slump amid corporate power struggle was originally published by Wisconsin Public Radio.