Product Warranty and Recall Campaigns

9 Months Ended

Sep. 27, 2020

Product Warranties Disclosures [Abstract]

Product Warranty and Recall Campaigns

Product Warranty and Recall Campaigns

The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except in Japan, where the Company currently provides a standard three-year limited warranty. The Company also provides a five-year unlimited warranty on the battery for new electric motorcycles. In addition, the Company provides a one-year warranty for parts and accessories. The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company accrues for future warranty claims at the time of sale using an estimated cost based primarily on historical Company claim information.

Additionally, the Company has from time to time initiated certain voluntary recall campaigns. The Company records estimated recall costs when the liability is both probable and estimable. This generally occurs when the Company's management approves and commits to a recall. Changes in the Company’s warranty and recall liabilities were as follows (in thousands):

	Three months ended				Nine months ended
	September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019
Balance, beginning of period	$	83,513	$	108,804	$	89,793	$	131,740
Warranties issued during the period	8,564		12,988		25,821		41,955
Settlements made during the period	(12,886)		(26,906)		(37,780)		(73,291)
Recalls and changes to pre-existing warranty liabilities	239		1,990		1,596		(3,528)
Balance, end of period	$	79,430	$	96,876	$	79,430	$	96,876

The liability for recall campaigns was $29.8 million, $36.4 million and $40.5 million at September 27, 2020, December 31, 2019 and September 29, 2019, respectively. Additionally, during the nine months ended September 29, 2019 the Company recorded supplier recoveries within operating expenses separate from the amounts disclosed above of $28.0 million.