Reuters released a new report this morning concerning the current state of affairs at Milwaukee's Harley-Davidson Inc. detailing not only another down quarter, but also The Motor Company's decrease in production as a response.

Harley-Davidson’s sales fell 9.3% in the U.S. and 6.7% globally in Q2, which ended June 25. Harley also stated it had lost ground in the big-bike market (601cc and above), dropping from 49.5% market share to 48.5%.

"We are pleased with our ability to deliver strong margins in the quarter despite challenging market conditions, particularly in the U.S.," said Matt Levatich, president and CEO, Harley-Davidson. "Given U.S. industry challenges in the second quarter and the importance of the supply and demand balance for our premium brand, we are lowering our full-year shipment and margin guidance."

What that looks like is cutting back shipments for Q3 to somewhere in the neighborhood of 39,000-44,000 units, representing a decline somewhere just shy of 20%.

Harley-Davidson sold 262,221 motorcycles last year and its projections for this year reflected its expectation to maintain that number, but have now downgraded those numbers to a forecast of 241,000 to 246,000 units sold.

Between this new forecasting and reporting a 7.7% net-income drop to $258.9 million, Harley’s shares were down 9% at $47.17/share as of yesterday morning.

Harley-Davidson is not alone in sales decline as motorcycle sales are down marketwide, but it is the most visible because of its very large sales volume and that it reports earnings and shipments. The new-bike market remains challenged, with pundits citing reduced interest in riding from millennials to a robust used market to basic safety concerns.

"By 2027, our objectives are to build 2 million new Harley-Davidson riders in the U.S., grow our International business to 50 percent of our annual volume, launch 100 new high-impact Harley-Davidson motorcycles, deliver superior return on invested capital for Harley-Davidson Motor Company and grow our business without growing our environmental impact," Matt Levatich of Harley-Davidson said on an earnings conference call earlier this year.

There was some skepticism regarding these plans, especially with such a lofty target number. At least until the company outlined more about the strategy regarding rider education to help address training and safety concerns as an obstacle to riding.

We met with several of Harley-Davidson’s representatives earlier this year, who further hammered home both the company’s plans and rational. Forever the skeptic, I have to admit being won over by the logic of “half of the new motorcycles purchased are ours so we sort of think we should just help people fall in love with riding and not worry about what they love, because about half of them will choose us anyway,” said a representative.

That’s a plan we can all get behind.

Another big question long term is how Polaris shuttering Victory to focus solely on Indian will affect The Motor Company. Certainly, concentrating efforts on one brand instead of two will ramp up the aggressive path Indian has already taken, and removing potential brand conflicts by closing Victory frees up Indian to broaden its offerings far outside traditional American-style cruisers.

The Indian Scout Bobber, released last weekend, demonstrates that the model-variation playbook is open and there is no doubt the company will push further into Harley's territory. And even though Indian's production numbers are comparatively small vs. the cultural and manufacturing giant that is Harley-Davidson, there is no doubt The Motor Company is paying attention.

While declining sales numbers are worrisome for all, the idea that the cruiser segment will finally become truly competitive gives more hope for the future than a bad quarter or two would suggest. Indian hinted recently that forthcoming models would push Indian into new territory, and it’s hard to think Harley-Davidson will go down without a fight. A competitive market is always best for us, the customer.

The numbers may not currently show it, but the future outlook for the cruiser market, long term, is the most positive it’s been for some time. Even if we’re off to a rocky start this year.