By: James ‘Hollywood”Macecari
What’s going on with Harley Davidson? Over the past 25 years, I’ve owned many, everything from an old Iron Head Sportster, 2003 soft tail, many other sportsters to my current 01 Fatboy. My current bike is my favorite out of all of them. I enjoy the horsepower and overall ride of the Fatboy. I guess you can say that I’ve never embraced the fuel injection fad, not to say there is anything wrong with fuel injection, I’m just one guy stuck in time I guess.
That Brings me to the Company. What the hell is going on over there? Yes, we all know that age is starting to creep up on Harley Davidsons main demographic, younger riders are not into the bigger model bikes. Harley is pushing their 750cc model pretty hard to the younger urban generation as we all know, but Harley Davidson is starting to set its sights on the Electric Bike market now, it’s the first prototype that should be coming out in the next few years. I get that anything that wants to advance has to change, after all, if you look out your windows, I doubt you will see any dinosaurs walking around. But does Harley Davidson really want to go the way of Electric Bikes?
Now I get as we older bikers grow old and start getting out of the marketplace, Harley will need to bring in a whole different generation to buy their bike, but will an electric bike be a true Harley Davidson? Personally, I think Harley is an identity crisis, sales are down the tube, everything that they are trying just isn’t working for them. So what is some of the reasons for that?
1. Harley Davidson has always had great brand marketing, but in recent years that brand has been suffering. Harley Davidson has always pushed the fact that it’s “Made in America”. Well as consumers are more informed nowadays, the company only produces 60% of its bikes here in the United States. Most all parts are no longer manufactured here in the states, they come from overseas. This practice has hurt the brand, more and more are saying “If Harley isn’t all American like it claims to be, whats the difference in getting a Honda, or Suzuki, which has fewer breakdown problems?” Really can’t argue with that, can you?
2. The younger generation only knows the Vietnam War through history books. It was that generation that really pushed the idea of “Harley and American only, Foreign is crap” type of mentality. That generation of a rider is now coming to an end. Those men were the best the biker world had, they taught all of us about Honor, Loyalty, and Respect. Now that they are transitioning out of the lifestyle, we get left with a younger generation who don’t believe in those ideas of what a biker should ride.
3. Harley Davidson has lost its technological edge while overcharging for a product that is a far less superior product. Personally, I think it’s decision to use overseas parts and suppliers instead of all American Made parts supplier from the past has led to these problems in reliability. The recent recalls in recent years are proof enough that Harley needs to get back to its American Manufacturing roots.
Let’s look at Harley Davidsons Model Lineup and you can see where the emphasis and profit margins are for Harley Davidson and why sales and popularity have been failing in the last couple of years.
Harley-Davidson Cruiser motorcycles
Cruiser motorcycles are built with an emphasis on styling and comfort. Harley-Davidson’s cruiser motorcycles also come with low-end torque. However, engine capacity may vary depending on the bike model. Harley’s motorcycles series such as Dyna, Softail, V-Rod, and CVO models falls under this category. Cruiser motorcycles are the second-largest selling category for the company. Harley also allows customization of its cruiser motorcycles.
Sportster and Street motorcycles
Sportster – These motorcycles incorporate racing technology and aerodynamic styling from low handlebars. This can be understood as the sports category motorcycles of the company. On the other hand, street motorcycles are standard motorcycles that usually come with upright seating for one or two passengers.
It’s important to note that street motorcycles such as Street 500 and Street 750 are more popular in emerging markets like Brazil and India. Typically, the profitability of such lightweight motorcycles remains lower as compared to heavyweight (touring and cruiser) motorcycles.
It is important to know that Harley-Davidson is a niche market product manufacturer unlike other motorcycle manufacturers such as Honda and Yamaha. To protect its margins, the company also needs to revisit its pricing strategy from time to time. In recent years, the company has increased the pricing of its motorcycles to maintain margins. However, this also negatively impacts Harley-Davidson’s competitiveness in the market, especially in the street bike segment.
So is Harley going to go the way of Electric Motorcycles to bring in the newer generation? Today’s electric two-wheeler segment is almost non-existent as compared to the traditional two-wheeler segment. However, with increasing environmental awareness, consumers all over the world are becoming more cautious with vehicle purchases, which is likely to drive the demand for electric vehicles.
Also, stringent governmental regulation related to emissions and noise standards are pushing automakers to improve their environmentally friendly technology. According to a report by Navigant Research, the electric two-wheeler segment is likely to witness decent growth in coming years. The interest of large automakers including Harley-Davidson in the electric vehicle segment could ensure the supply in the market going forward. The report also suggests that in the last few years, the battery cost used in such vehicles has also dropped drastically and is expected to come down further in the coming years.
So with supply costs and especially battery costs going down in the next few years, as much as I hate to say it. Harley Davidson will be going electric soon. What our generation of bikers knew will be all but gone in the next 10-20 years as motorcycle companies, including Harley Davidson, will have to evolve with the technology to stay competitive. If Harley doesn’t get its marketing strategy together, as well as product superiority back, Harley Davidson too, will go the way of the dinosaurs.
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