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Automakers Should learn from Harley-Davidson’s Marketing Failures and many missteps

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By Matt Posky

While not the core focus of this website, we’ve often chronicled Harley-Davidson’s missteps as a way of predicting issues that might crop up for manufacturers specializing in four-wheeled transportation.

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You see, the ironically American motorcycle brand has painted itself into a corner. By leveraging its established fan base, sales swelled through the 1990s. Unfortunately, the United States’ interest in motorcycles plummeted once the Great Recession hit. H-D was not exempt, enduring the worst of it as its stock price declined 42 percent over the last five years.

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As the recessional dust cleared, rival manufactures panicked and shifted away from larger bikes aimed at experienced riders with more money to spend. Japanese companies began furnishing smaller, inexpensive models they hoped would encourage new riders. Harley Davidson waited longer to do this, launching two competitively priced, entry-level models that were still larger than seemed prudent.

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Despite the industry seeing slightly improved volumes in the years following 2010, the last two have seen negative growth and annual sales totalling less than half of their pre-recession peak. Hoping to find new riders somewhere, H-D again shifted tactics by building child-sized scooters and the all-electric LiveWire.

Sadly for H-D, a report from Reuters indicates the model has failed to drum up much interest, even among dealers:

The sleek sport bike has been available for preorder in the United States since January. However, the bulk of the orders are coming in from existing and old riders, according to interviews with 40 of the 150 dealerships nationwide that are carrying the bike this year.

The dealers Reuters spoke with account for little over a quarter of LiveWire dealerships and are spread across Wisconsin, Illinois, Indiana, Ohio, Michigan, California, Nevada, New Jersey and New York.

Harley has for years failed to increase sales in the United States, its top market accounting for more than half of its motorcycles sold. As its tattooed, baby-boomer base ages, the Milwaukee-based company is finding it challenging to woo new customers.

In 2018, Harley posted the steepest sales decline in four years in the United States. U.S. sales are tipped to fall again this year.

James Hardiman, an analyst at Wedbush Securities, estimated Harley would sell between 400 and 1,600 LiveWires in its first year of sale. That’s less than 1 percent of the company’s global volume from 2018. The bike has also been subject to delays, with August’s planned deliveries being pushed back to October. “This is going to be largely a rounding error certainly this year and even next,” Hardiman said.

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It’s not hard to see why.

Starting at $29,799, the bike is ludicrously priced. It’s also handicapped by a 146-mile range, though that can drop to 95 miles if they’re all highway. Despite this author enjoying the LiveWire’s Buell-like styling and hearing a lot of positive mumblings about the bike’s stellar on-road behavior and interesting tech, we’re still left with an extremely expensive vehicle offering little to newcomers.

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While Harley-Davidson contends that the LiveWire’s single-speed is a boon to fresh riders unfamiliar with hand clutching and toe shifting, those are two skills they can’t learn until they switch bikes. New riders need something lightweight, versatile, and cheap enough to ding without feeling guilty. The LiveWire is none of these things and further handicaps riders with a diminished range that requires extended charge times — anywhere between 1 and 12 hours.

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There’s no real target demographic here. The vast majority of motorcycle riders are hobbyist adventure seekers or people thinking they might save money on their commute. While there’s bound to be a few hardcore environmentalists thrown in there, I’ve never met one and imagine they’d select something less expensive and more energy efficient — likely pushing them to another brand.

“It is appealing to a demographic that is already riding,” Gennaro Sepe, a sales manager at a Harley dealership in Chicago, told Reuters. His reported that his store has received four preorders for the LiveWire — all from from existing riders.

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Like electric cars, battery-driven bikes are worth pursuing. A case could even be made for the LiveWire, if it’s viewed as a starting point for something more reasonable. But this is not the way to attract new customers. People don’t start riding bikes when they can afford one that costs $30,000; they start when they’ve managed to set aside a little money from their pizza delivery job.

Automakers would do well to keep Harley-Davidson in mind as a cautionary tale. Many are having a similarly rough go of courting new buyers and are bent on lining their pockets with higher-margin trucks and utility vehicles. Yet this strategy could come back to bite them, too. With younger folks having less disposable income than their parents’ generation, a partial shift toward less expensive models seems inevitable.

However, the auto industry is more interested in moving toward electrification. Numerous auto brands have massive EV offensives planned over the next few years, and most of these products will carry prices substantially higher than those of similarly-sized internal combustion vehicles.

In that respect, their general strategy isn’t terribly different from what H-D is promising. Harley-Davidson wants to produce four more electrified models by 2022, half of them being smaller e-bicycles and child-focused scooters. It’s also launching subscription-based cellular connectivity services (H-D Connect) that allows phones to interface with new bikes — all while remaining committed to larger models and old-school charms its veteran customers tend to prefer.

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The motorcycle industry has historically gone through boom and bust periods, but it’s done a very poor job of capturing new riders; as such, it hasn’t succeeded in making a full recovery. You can blame everything from a dealership experience that doesn’t know how to cater to new riders to products that are ill-suited for modern times, but the core issue remains the industry’s inability to predict what the public wants — or market it in a way that’ll change their mind.

Automakers should probably take note.

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2 comments

  1. This is ass backwards!
    H-D Inc. Levitich should have learned from the auto makers. H-D management caused their woes themselves.

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