Written By Harley-Davidson, the iconic American motorcycle manufacturer, has been struggling to recover from the impact of the COVID-19 pandemic, as well as declining sales in recent years. Now, the company is facing another obstacle: a shortage of motorcycle repossession services that is causing it to lose money on delinquent loans.
The shortage of repossession services is a result of the pandemic-related economic downturn, which has led to increased demand for such services. In addition, there has been a surge in motorcycle sales as people seek socially-distanced transportation options.
Harley-Davidson’s financial woes began long before the pandemic. In recent years, the company has struggled to attract younger riders, who are looking for more affordable and environmentally-friendly alternatives to traditional motorcycles. The company has also been facing stiff competition from other motorcycle manufacturers, including Japanese and European brands.
To stay afloat, Harley-Davidson has been trying to diversify its product offerings and appeal to a wider range of customers. The company has introduced new models, such as the electric-powered LiveWire, and expanded into new markets, such as India and China.
However, the repo shortage has put another dent in the company’s already-struggling finances. When a customer defaults on a loan, the lender typically hires a repossession company to retrieve the vehicle. The lender then sells the vehicle to recoup some of the losses from the defaulted loan.
But with a shortage of repossession services, Harley-Davidson has been unable to repossess a significant number of motorcycles that are in default. This has led to a backlog of delinquent loans and a loss of revenue for the company.
According to a report in the Wall Street Journal, Harley-Davidson Financial Services (HDFS), the company’s lending arm, has been experiencing losses due to the repo shortage. In the first quarter of 2021, HDFS reported a loss of $30 million, compared to a profit of $85 million in the same period last year.
To address the repo shortage, Harley-Davidson has been trying to work with repossession companies to find solutions. The company has also been offering customers more flexible payment plans to help them avoid defaulting on loans.
However, the repo shortage is just one of many challenges facing Harley-Davidson as it tries to turn around its fortunes. The company is also facing increasing pressure to transition to electric motorcycles, as consumers and regulators push for more environmentally-friendly transportation options.
Despite these challenges, there is still hope for Harley-Davidson. The company has a strong brand and a loyal fanbase, and there is potential for growth in emerging markets. But in order to succeed in the long term, the company will need to continue to adapt to changing market conditions and find ways to appeal to new customers while maintaining its core identity.
