Harley-Davidson embarks on a dramatic shift away from its traditional motorcycles

[SnoBrdr]

http://www.latimes.com/business/la-fi-h ... story.html

[Whiskerfish]

They have some tremendous engineering teams. Should be interesting to see how they move forward in a wider market. Could fizzle or could be a real game changer.

[UK_Andy]

'Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism.'

Bugger!!

[SnoBrdr]

'Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism.'

Bugger!!

Harley-Davidson Inc. on Monday unveiled a plan to expand motorcycle ridership and increase global sales with bikes that will be hardly recognizable as Harleys – among them electric scooters and small bikes destined for foreign markets.

The plan, perhaps the most aggressive in the company’s 115-year history, is part of a broad effort to reverse eroding market share, attract new riders to replace older ones aging out of the sport, and correct a stock slide that has seen Harley’s per-share value drop nearly in half over the last four years.

President and CEO Matt Levatich said in an interview the initiative will require a reversal of corporate mentality.

“We are shifting our mindset from ‘we build bikes’ to ‘we build riders,’” Levatich, 53, said.

He also defended his company’s decision, much criticized by President Trump, to meet increased European Union tariffs by expanding production operations overseas.

“Our preference is to make motorcycles in the U.S. for the world market,” Levatich said. “But at the same time, we have to protect our business and preserve our market strength and serve our customers” in the EU.

A line of "Streetfighter" bikes, such as this 975cc model, will arrive in dealerships by 2020.
A line of "Streetfighter" bikes, such as this 975cc model, will arrive in dealerships by 2020. (Harley-Davidson Inc.)

The strategy will come at a steep price. Levatich said the company’s multiple-year expansion could require a total investment of up to $825 million through 2022. But he added that the company expects to increase annual revenues by $1 billion to $1.5 billion by then. The investment goal can be met by “self-funding,” he said, without raising new equity or debt.

“We aim to do this with the same investment, return and cash-flow profile that we have today — without dipping into shareholder returns,” Levatich said.

The motorcycle company’s stock closed down slightly on Friday at $44.38 per share.

The product shift will be dramatic for the company, which specializes in heavy highway motorcycles powered by some of the industry’s largest engines.

Harley will for the first time enter the Adventure Touring segment, with two proposed Pan America bikes, and will add at least five new machines to its promised LiveWire electric motorcycle family, the company’s first foray into battery-powered two-wheelers.

Inspired by the design language of LiveWire, Harley's upcoming electric superbike, the company will also create a line of midweight electric motorcycles.
Inspired by the design language of LiveWire, Harley's upcoming electric superbike, the company will also create a line of midweight electric motorcycles. (Harley-Davidson Inc.)

Harley will also build at least five new “Custom” models and nine new “Streetfighter” bikes, many as small as 500cc, in an effort to push further into those categories, especially in overseas markets that demand smaller motorcycles.

At the same time, the Milwaukee company will attempt to retain market dominance with the full-size touring and cruiser motorcycles that are the backbone of its international sales.

Skeptics are likely to suggest Harley risks alienating core consumers, or diluting its legacy position, by trying to attract new riders.

Veteran industry consultant Robert Pandya said Harley’s identity is both its strength and its liability. Appealing to a non-Harley consumer will require a top-to-bottom company re-education.

“If you’re trying to draw a new young customer or a female customer, you might win them with the marketing campaign but lose them when they walk into the shop, unless there is a real overhaul,” Pandya said. “Everyone in the entire organization has to buy in on the marketing message. That’s asking a lot.”

With an eye to affordable mobility in dense urban environments, Harley will produce a line of lightweight electric bikes.
With an eye to affordable mobility in dense urban environments, Harley will produce a line of lightweight electric bikes. (Harley-Davidson Inc.)

Levatich stressed that dealer participation was elemental to the company’s success, and would be reinforced by a massive education and engagement campaign at the dealership level.

The company will also create new urban retail outlets that will differ dramatically from Harley’s traditional suburban dealerships, and would reinforce its online sales efforts and partner with third-party e-commerce companies to help push Harley apparel and merchandise into new markets.

But Levatich said Harley-Davidson will continue to serve its traditional audience — which skews older, male and Caucasian — with continually improved versions of its traditional product.

“We are not running away from our core,” Levatich said.

The electric motorcycle effort will include several of what Levatich called “lightweight, urban” transportation products that are designed specifically to appeal to “young adults, globally, living in dense urban spaces.”

Calling this an “unmet need,” Levatich said sales of these small electric motorbikes, designed to compete with beginner-level mopeds and the electric scooters, bring first-time consumers into the Harley brand in markets where the company has not enjoyed strong sales — or any sales at all.

It's official: This LiveWire electric superbike will be in dealerships in 2019, the CEO said.
It's official: This LiveWire electric superbike will be in dealerships in 2019, the CEO said. (Harley-Davidson Inc.)

Levatich also said the company will partner with an unnamed Indian manufacturer to build “a small displacement motorcycle bridge” to Harley-Davidson, as part of a global effort to “create interest in our brand sooner” among consumers who have found traditional Harley motorcycles unaffordable, unapproachable or unsuited to dense city environments.

The company will also be making a concerted effort to “grow China,” Levatich said, pushing into what has become the world’s fastest-growing motorcycle market.

The new products are not empty promises, the executive declared, but already exist as prototypes or in some other form. The Pan America 1250cc adventure bike, for example, “is on a test track in Arizona as we speak.” The LiveWire will be in dealerships in 2019.

Levatich said internal studies show his company created 32,000 new Harley-Davidson riders in 2017, after first announcing a 10-year plan for growth. He added that Harley may have only begun to tap into a large pool of potential riders who have not seen Harley-Davidson product that appeals to them.

“We know that only 2.9% of U.S. adults ride motorcycles,” he said. “So that makes us special, as riders. We get something that other people don’t get, or haven’t yet gotten. There is tremendous potential in that number.”

Entering a crowded and maturing segment, Harley will produce the Pan America, a 1250cc Adventure Touring motorcycle.
Entering a crowded and maturing segment, Harley will produce the Pan America, a 1250cc Adventure Touring motorcycle. (Harley-Davidson Inc.)

In fact, according to the industry trade group Motorcycle Industry Council, new motorcycle sales in the U.S. dropped from a record high of 716,268 units in 2006 to 371,403 new bikes in 2016.

According to its 2018 second-quarter report, released last week, Harley domestic sales fell 6.4% from the same period in 2017.

Levatich, who has been with the company for 24 years and serves as president and CEO without an employment contract, said that increasing the population of future riders is essential for his company and the industry as a whole.

“This whole plan to create new riders is a bold, ambitious and bordering-on-audacious goal,” Levatich said. “But there is no other option.”

[rcmatt007]

unfortunately the niche that Harley has had is generally the big touring bikes. And those are generally bought by people my age with disposable income (not unlike the GL1800) The v-rod was a great zoom-splat, but it never was their market. The sportsters were their entry level and those are only considered cheap compared to the big bikes. It will be interesting to see how this plays out.

[UK_Andy]

Thanks for that, good read.
Ive always thought that if you took the front cylinder only you could have quite a good single engine, lightweight bike

[JSBail]

I wonder if "project Nova" may become a reality as well or at least reconsidered.

[gregforesi]

Firing Erik Buell was really short-sighted (and in my never humble opinion...dumb). Here we are 5 or 6 years later and they want to attract the people he was going after.

[SnoBrdr]

Firing Erik Buell was really short-sighted (and in my never humble opinion...dumb). Here we are 5 or 6 years later and they want to attract the people he was going after.

Depend on who you talk to as to did he quit or not.

[x01660]

I really like the look of that streetfighter. And the new modular engine is liquid cooled.... hmmm.... if they pull this off, I may actually look into getting one...

2020-Harley-Davidson-Future-Streetfighter-1.jpg (135.3 KiB) Viewed 258 times

[rcmatt007]

looks like an updated V-rod. I test drove one once. WOW!

[pidjones]

500cc is not small enough for most Asian markets. The biggest you normally see in India is 175. Still, I would be interested in a 500-800 cc range for USA use if I was younger. V-Rod, Buels, and the old 900 cc kick-start Sportster were the only HDs that interested me (outside of the unobtainium XR750s). As it is, I'll stick with Honda's couch rocket.
But, what SciFi nightmare put this adventure tank in their minds?

[raiddrten]

Firing Erik Buell was really short-sighted (and in my never humble opinion...dumb). Here we are 5 or 6 years later and they want to attract the people he was going after.

Yep. ^^^^this^^^ I know a former Harley tech who rescued a Buell [that he describes as a very good bike] from the dealership, and he seemed to think that the dealers did not support their Buell customers well and the sales staff turned their nose up at Buell bikes. The dealership built a new showroom too big for its market and went belly up.

He started his own shop and is doing OK, working on mostly older bikes.

Nothing wrong with building a bike where you sell it---That exact thing is what gave us the 'Wing in the first place.

[Old Fogey]

Nothing wrong with building a bike where you sell it---That exact thing is what gave us the 'Wing in the first place.

Well, not strictly true, only from 1980 but yes Honda saw what Harley are now seeing. That it makes sense to make the product in the area of most demand.