So that is one very important component. Even the actual reach or applicability of the promotion. We have found that the low APR has been well received by our dealers and by our consumers also at this time of year, you usually see consumers that are looking for, that may be a little bit higher credit worthiness and are looking for really a good offer. And that’s where we’re targeting our promotions. But first and foremost, our efforts are really around the balance of driving traffic, driving awareness, making sure that we’re back in the consideration that just as much as it is about closing deals for the consumer at the level of the dealership.
Tristan Thomas Martin : Okay, thank you.
Operator: Your next question comes from the line of Noah Zatzkin from KeyBanc Capital Markets. Please go ahead.
Noah Zatzkin: Hi, thanks for taking my question. I’m just wondering if you could provide some color or help quantify the impact of the production suspension on 3Q shipments and how you think about the retail impact during the quarter there. Do you expect resumption of shipments to be a retail tailwind in the fourth quarter?
Jochen Zeitz: Well, if you look, as we mentioned in our speech that, you know, shipments, have resumed, but they actually came in later than we had hoped for in the third quarter. So, some of our most desirable products, came in later in the third quarter. And that certainly has had some impact. To quantify the impact on retail is quite difficult. So, I’ll refrain from that, but the interruption has certainly messed up our mix a little bit and the shipment of our most desirable units and that impact we’ve certainly seen play out. Now, how much you can, how much of that you can pick up in the fourth quarter remains to be seen, but that’s obviously what we’re trying, trying to achieve.
Noah Zatzkin: Very helpful. Maybe just one more, and I know you’re not guiding to 2024, but as it relates to HDFS, I guess, how are you thinking about kind of a baseline for expected credit losses next year given higher rates? Thanks.
Jonathan Root: Yep, you’re welcome. So, good question. We’re actually not talking about 2024 or 2024 guidance at this point. We want to make sure that we close out the year and have confidence in what we are communicating further out. So, we’ll probably hold on that. I think the important point for us is as we look at what you’ve, what we’ve displayed, again within the presentation today on what we’re seeing in terms of, realized retail credit losses, certainly those have accelerated. We think that we’re starting to comp a period that’s a little bit easier from a comp perspective than where we were in the first half of the year. So, the kind of the trend that we’re on, is in the right direction, but probably not the right severity.
So that will start to slow down a little bit as we move into the back quarter or the final quarter of the year. But again, as we look forward to 2024, we’re going to save that for a future call with you that’s a little bit more informed and a little bit more accurate.
Noah Zatzkin: Thank you.
Operator: Your next question comes from the line of David MacGregor from Longbow Research. Please go ahead.
David MacGregor: Yes. Good morning, everyone. I wanted to ask about LiveWire. And it seems as though you are still targeting that 600 bikes at the low end of the range, which would imply a pretty substantial inflection in shipments here in fourth quarter. I guess, how confident are you in that 600 unit, sort of target. Can you talk about what percentage of these bikes may be pre-sold at this point? Have you adjusted your plan price point on the Del Mar to account for maybe some of the affordability issues that were discussed earlier in the call? And I think importantly, at what rate does the operating loss respond to the ramp and unit shipments?
Jochen Zeitz: Good morning, David. Thanks for the question. Our level of confidence is where it should be to reaffirm guidance. We have enough demand to fulfill the guidance in terms of number of units. We are back in production ramping up right now as we speak. So, we feel pretty confident that between demand that we have with pre-orders along with the capacity available at York, that we can fulfill that number. So that’s the first part of the question. The second, we stick to the pricing that was communicated earlier.
David MacGregor: Okay. And are you able to speak to, at what rate the operating loss responds to the ramp in unit shipments?
Jonathan Root: The operating loss is inline with the investments that were planned for the year. So, at this stage, it is exactly the rate that we are supposed to have.
David MacGregor: I guess I am just trying to get a sense of going forward with that operating leverage, that volume leverage might look like in ’24 and ’25 as we ramp?
Jonathan Root: I think it would give you the same response that I gave, which is we don’t comment on ’24 ’25 on this call.
Operator: Your next question comes from the line of Brandon Rollé from D.A. Davidson Please go ahead.
Brandon Rollé: Good morning. Thank you for taking my question. Earlier in the call, you touched on the dealer form you hosted in early October. Would you be able to touch on a few of the topics you discussed there? Feedback we received from dealers was overwhelmingly positive, especially around new products, but also some of the initiatives you are taking for 2024.
Edel O’Sullivan: Thank you, Brandon. That’s good to hear. We thought it was an excellent session as well. The main objective really was around the business planning opportunity with our dealers. Certainly, there was value to all of us being together again, as a broader sort of HDMC and dealer body. Our main objective is to make sure that we are aligned going into 2024 on what we need to do to make sure that, we have a very strong year. We believe our network as Jochen referenced in his commentary is really a differentiated asset for us in terms of its reach, its strengths, its exclusivity. So, the more that we can align and ensure that we are going to market together on some critical initiatives, the better. Our main agenda topics, we certainly had a section of this around product, which we don’t comment on our future product initiatives, but obviously a very important part of the session was making sure that, our dealers were aware of some of what is planned for 2024, as they think about their own operations.
And then we did a more of a broad set of — we covered a broad set of topics around business alignment and some of our key initiatives, membership, and loyalty or apparel business, our broader omnichannel initiative, how we are thinking about profitability and growth. And again, very, very heavy discussion or a big component of the agenda around ensuring that we are aligned in our go-to-market and in our marketing investments in particular, again, leveraging the strength of that network and the investments that they bring to bear in the engagement with consumers. So, we felt it was an incredibly valuable session. It was a wonderful opportunity also to just energize around what has been in many ways a challenging year. So, it was — I think we’ll bear fruit as we go into 2024 in a much more aligned and energized network.
Operator: Our next question comes from the line of James Hardiman from Citi. Please go ahead.
James Hardiman: Thanks for taking my follow-up. So back to sort of the inventory conversation. I think I get why inventories would be up versus ‘21 and ‘22. Those were pretty depleted levels, but I guess what I still struggle with here inventories are versus ‘19, they’re down less than retail is, right? And so, days on hand, weeks on hand at least by my math, are up fairly meaningfully versus 2019. And you can, when you first came in it seemed like the message was pretty loud and clear that you guys thought that inventories were way too high coming out of 2019. So, help me sort of square those two things. I mean, it just — it feels like so much of the effort in the first couple years went towards leaning out the channel and as we sit here today, we’re sort of worse than we were back then — at least on a week-on-hand basis.
Jochen Zeitz: Yes, I let the Edel comment here as well versus 2019, but I don’t think you can compare ‘21 and ‘22 to what we are seeing now and for the reasons that I’ve mentioned in earlier on — it’s a very different environment. Demand is more selective. We’ve had a production interruption that and in order to get the right mix to the dealers, we need to structurally have a higher inventory if demand is more selective on product as well. And we still end up and I’ll hand it over to Edel here, significantly below 2019 levels. And I know that you’re — the way you’re doing the math is a little bit different to ours in terms of reach of the inventory, but from everything we’ve seen and everything we are hearing, we feel that we’re in a good sport here.
