12 • August 2026 • Powersports Business

S & P

• CONTINUED FROM PAGE 11

succeeds, S & P estimates the company’ s market share could rebound to roughly 45 %.

However, the ratings agency questioned whether the lower- price approach will generate sufficient profitability for investors.

In its analysis, S & P said Harley- Davidson appears to be prioritizing market share over per- unit margins, projecting adjusted EBITDA margins of just 5 % to 6 % in 2026. The agency said it could take several years for margins to approach 10 %, well below the more than 16 % EBITDA margins the company reported in 2022 and 2023.

S & P also pointed to additional financial headwinds, including restructuring costs tied to workforce reductions and tariff- related expenses. Harley- Davidson has targeted $ 150 million in annual cost reductions and recorded approximately $ 15 million in restructuring charges during the first quarter. The agency also noted management expects steel and aluminum tariffs to increase costs by an estimated $ 75 million to $ 90 million in 2026, although Harley believes those costs will moderate over time as trade policies evolve.

The strategy is being led by president and CEO Artie Starrs, who took over the company in late 2025. The plan aims to increase motorcycle sales through more accessible pricing while expanding the installed customer base that can generate higher- margin revenue from

H arley- Davidson’ s new strategy to regain market share with more affordable motorcycles has drawn skepticism from one of Wall Street’ s major credit rating agencies.

parts, accessories, apparel and customization.

Despite the downgrade, S & P said Harley- Davidson maintains a strong liquidity position. As of March 31, the company held approximately $ 1.8 billion in cash and cash equivalents and had access to more than $ 2 billion through its commercial paper program. The stable outlook reflects the company’ s liquidity and relatively conservative leverage profile, according to the ratings agency.

S & P’ s assessment differs from other major credit agencies. According to the agency’ s report, both Moody’ s and Fitch continue to rate Harley- Davidson’ s debt within investment- grade territory, although at different levels.

The downgrade highlights investor concerns about the profitability of Harley- Davidson’ s turnaround plan rather than its financial stability. While expanding the lineup with lower- priced motorcycles could help attract younger and first- time riders, investors and analysts will be watching closely to see whether higher unit sales can offset thinner margins and restore the company’ s longterm earnings growth.

Fresh reports out of Europe have revived speculation that the Volkswagen Group could consider selling Ducati as the automaker works through a sweeping restructuring program. However, no formal sale process has been announced.

According to the Financial Times, cited by several motorcycle industry outlets, including Visordown, investment bankers have urged Volkswagen to explore selling Ducati after the company recently raised € 7.4 billion($ 8.4 billion) through the sale of a majority stake in its marine engine business, Everllence.

The reports come as Volkswagen continues one of the largest restructuring efforts in its history. The automaker is reportedly looking to cut as many as 100,000 jobs and close multiple factories while investing heavily to remain competitive against rapidly growing Chinese electric vehicle manufacturers.

Analysts quoted by the Financial Times reportedly believe the proceeds from the Everllence transaction could be quickly consumed by restructuring costs, prompting advisers to recommend additional asset sales. Among the options reportedly discussed are Ducati and a potential spinoff of Lamborghini.

This is not the first time Ducati has been linked to a possible sale. In 2017, Volkswagen conducted a strategic review that included exploring a sale of the Bologna- based

The proceeds from VW Group’ s Everllence transaction could be quickly consumed by restructuring costs. Advisers quoted in European media outlets have recommended additional asset sales, which may include Ducati and a potential spin- off of Lamborghini.( Photo: Ducati / Lamborghini)

motorcycle manufacturer in the wake of the Dieselgate emissions scandal. While several buyers were rumored at the time, Volkswagen ultimately retained the brand.

Despite the latest speculation, reports indicate there is no evidence that Volkswagen has officially put Ducati