Harley Davidson

WHY ARE SO MANY HARLEY DAVIDSON DEALERS CLOSING?

Harley-Davidson dealerships are closing due to declining sales stemming from an aging customer base, high operating costs, and market saturation. Efforts to attract younger riders have failed, while competition from alternative brands and a thriving used motorcycle market further strain profitability. Overall, financial pressures and post-pandemic corrections are driving closures.

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Harley-Davidson dealerships are closing primarily due to declining sales and profitability, driven by an aging customer base that younger riders don’t replace, high operating costs, and the financial fallout after a boom in sales during the COVID-19 pandemic. High prices for new bikes, the affordability of the used bike market, and competition from other brands also contribute to the financial strain on dealerships. 

Key Factors Contributing to Dealership Closures

  • Aging Customer Base: The core Harley-Davidson customer base is aging out, and the brand is struggling to attract new, younger riders who prefer lighter, faster, and more affordable motorcycles. 
  • Post-COVID Sales Decline: After a period of high profitability during the pandemic when there was limited product, sales have significantly dropped as interest rates increased, leading to a market correction. 
  • High Costs and Reduced Margins: Dealerships face high costs for large facilities and maintenance, coupled with reduced sales volume and lower profit margins on new motorcycles, making it difficult to stay afloat. 
  • Price and Affordability: New Harley-Davidson bikes are expensive, and many potential buyers find better deals on the large used motorcycle market or opt for more affordable alternatives. 
  • Failed Modernization Efforts: While Harley-Davidson has introduced new models and even an electric bike to attract younger riders, these efforts have largely failed to resonate with the broader market. 
  • Market Oversaturation: In the past, many large, expensive dealerships were built, creating an unsustainable model that has become a financial burden. 
  • Competition: The rise of alternative brands and the ability for independent shops to service older Harley-Davidson models outside the authorized dealer network put pressure on dealerships. 
  • Company Strategy: Some believe the company’s focus on strengthening the network by weeding out financially struggling dealerships contributes to the closures

00:00 Time to Debate why Harley Davidson is in trouble

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