Harley-Davidson Financial Services‘ first quarter was marked by the launch of its certified pre-owned (CPO) program and increased originations.
The retailer’s CPO program, announced last quarter, went live this week, Chief Executive Jochen Zeitz said on Monday’s earnings call. More than 350 U.S. Harley-Davidson dealers signed on to the program at launch, representing 63% of the U.S. dealer network, he noted.
Certified pre-owned motorcycles will include a 12-month limited warranty on the engine and transmission along with a 12-month membership to the company’s owners group, Zeitz said. Special financing rates through Harley-Davidson Financial Services (HDFS) will also be available on the bikes.
New and used motorcycle originations clocked in at $769 million in the first quarter, a 25.9% increase year over year, according to the earnings presentation. The growth follows YoY declines in originations of 4.2% in the third quarter, and 1.4% in the fourth quarter of 2020.
Meanwhile, retail sales performed well in the first quarter, jumping 30% YoY in North America to 32,782 units and 9% YoY globally to 44,235 units.
HDFS’ penetration rate remains strong, with 63.5% of new Harley-Davidson motorcycles purchased in the U.S. financed through the motorcycle manufacturer’s captive, a decrease of 4.3% from last quarter and 1% YoY.
The rate of loans 30-plus days past due sat at 2.14% in the first quarter, down from 3.18% in Q4 2020 and 3.37% during the same period a year ago. The retailer also decreased its provision for credit losses by $102 million. Harley-Davidson did not specify the percentage that its provision fell sequentially.
“The Financial Services segment delivered $119 million of operating income, $96 million better than last year, due to lower actual losses and a lower loss provision,” Gina Goetter, chief financial officer, said on the call.
Shares of Harley-Davidson Inc. [NYSE: HOG] were trading at $47.52 as of 1 p.m. ET today, down 1.16% from market open. Harley-Davidson has a market capitalization of $7.28 billion.
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