Jochen Zeitz: Thank you, Noah. But I guess when we look at LiveWire right now, our focus is really about product innovation and cost improvement. We want to reach profitability as fast as we can. So we’re in a strong position to capture the opportunity as the market develops. So right now we remain focused on our long-term vision of being the leader in a two-wheel EV industry driven again by innovation and performance in the short term, a strong internal plan to reach profitability as soon as possible.
Operator: Our next question is from the line of David MacGregor with Longbow Research. Your line is live.
David MacGregor: Yes, good morning. Thanks for taking my call, my questions. I guess I just wanted to follow up on the LiveWire discussion. Karim, could you dig a little bit deeper into kind of the experience this quarter, the consumer reaction to the ST Del Mar? You shipped 660 bikes in ’23. Could you talk about kind of retail sales and how that may have grown through the year and you’re talking about 126 dealers this year. What are you expecting to grow that to in 2024? Thank you.
Karim Donnez: Yeah, thanks for the question, follow-up question. Well, look at this stage, we feel pretty good about the Q4 shipments because we have more orders in hand that shipments done so far. So we feel pretty good about retail and the conversion in a short term. Now we absolutely working really hard on creating a retail engine and supporting our dealers, which is why you saw that we reached 126 retailers globally. Obviously, when you look at the number of bikes, it makes it for very attainable target for retailers to achieve at retail. So our goal is to essentially in 2024 match retail with wholesale. So the team is hard at work to deliver on making retail momentum sustained and to support wholesale.
David MacGregor: Thanks. Good luck with that.
Operator: Our next question comes from a line of Jaime Katz with Morningstar. Your line is live.
Jaime Katz: Hi, good morning. I want to focus in on market share, which actually improved quarter over quarter, but I’m wondering where you guys are trying to structurally drive that to over time? Or is it something that that may be, this 40% level is the new normal given the shift in consumer demand to other types of bikes? Would you help us think about that longer term? Thanks.
Jochen Zeitz: Thanks, Jamie. Well, our focus of this part of this strategy has been very clear, shifting the mix towards our core focus, our core categories, right? That’s the tri cruiser touring and that that shift has proven extremely successful. We’ve mentioned earlier, our average unit profitability is up from 1300 to $3,700. So, not being obsessed by unit sales over the last few years served us well in terms of overall profitability, which is improved from 6.3% to 13.6%. So extraordinary improvement. That said, obviously, we want to grow our business to we believe that with our new model year ’24, we have that opportunity, we have the right foundation, but we also need a more accommodating economic environment and when I say economic environment, then I’m talking about our industry and high interest rates that are a tough challenge for many of our core customers.
So I don’t want to evade you the answer to your question, but, our focus is on growth and profitable growth and that’s how we will complete our hardwired stage two strategy at the end of ’25. What comes after that, we will address at the appropriate time. We do look at market shares, but we’re not obsessed by market shares. I’ve never been never will, but of course, it’s pleasing to see that in this tough environment, especially in the fourth quarter, we were able to grow our touring share back to 75%, large cruiser 80%. That’s commanding. Give or take 5%. That’s always the swing that you’re going to see throughout the year, also on a rolling 12 months forward, or backward and I think that’s likely where we’re going to be, but we believe there’s an opportunity to take market share, especially in touring, and through our trike offering, because we have competitive and great product and that should see a positive development, certainly next year, if all our plans come to fruition and hopefully that will carry through in future years as well, at least until the end of our hardware stage two, which is at the end of ’25.
The touring platform, as I mentioned, has been in development since 2020 and it’s the first refresh and in fact, it’s not a refresh, it’s a complete rebuild from the bottom up in every respect and I think the positive reactions give us that opportunity, but it’s a little early to comment how lasting that is going to be, but we feel very good about it.
Operator: And we have a final question for today from the line of Brandon Rollé with D.A. Davidson. Your line is live.
Brandon Rollé: Thank you for squeezing into my question here. Just a question on your margin guidance, I think you had called out additional manufacturing costs as being a headwind to guidance this year, could you size up, the amount of headwind from those additional manufacturing costs and then provide any additional color on feedback you’re receiving for the model year ’24 line-up? Thank you.
