Harley-Davidson hit the news once again for all the wrong reasons over the weekend, with the announcement that CEO Matt Levatich was stepping down from his role amid the brand posting steep losses in sales.
It's been a long time coming in the eyes of some, with Harley-Davidson shares reportedly falling 46% in the years since Levatich took charge and Harley bike sales in the US (arguably the brand's most important market) for 2019 were the lowest in at least 16 years.
However, despite the gloomy outlook on the sales front, we're not giving up on the iconic American brand for a number of reasons.
For starters, Harley-Davidson is a premium brand struggling in a market where premium motorcycles, in general, aren't putting the rubber to the road. Take a look at the top sellers in New Zealand for the past three years and you'll see the Top 3 sellers all falling into the LAMS class, with Harley's top seller, in general, being the diminutive Street 500 learner bike.
Sure, price is a major driving factor for many motorcyclists and despite Harley-Davidson offering a wide range of motorcycles the premium associated with the brand is often hard to overcome. Just look at the new Softail Standard. Lauded as the cheapest model in the huge Big Twin powered Softail range at $22,750 but that is still well out of the realm of affordability for many. This is compounded by an ageing Sportster range that is becoming very long in the tooth and losing desirability by the minute.
Another problem for Harley-Davidson has been its narrow focus. After decades of (for lack of a better phrase) sucking up to Harley purists, the brand has fallen behind in market trends and has suffered for it. Add to this the fact that many of those old Harley stalwarts have been ageing out of motorcycling and you have a big problem on your hands.
Harley-Davidson has known all of this, though. In fact, under outgoing CEO Matt Levatich the brand began to take steps to shed its rich old man image and move into markets so far unexplored by the company.
Take a look at the soon to arrive LiveWire electric we rode last year, which not only takes Harley into unexplored territory but is a bold step for any major motorcycle manufacturer. Sure, sales of the nearly US$30,000 LiveWire have been few and far between, but this is a halo product of a whole portfolio of electrics Harley is working on and the company knew before they even launched the LiveWire that it wasn't going to be a volume seller. They even told us so prior to our ride in Portland!
The other shining hope for Harley-Davidson comes in the form of the brand's soon to be launched water-cooled Revolution Max engine platform – headlined by the 1250cc PanAmerica Adventure Bike and the 975cc Bronx Streetfighter.
These water-cooled motorcycles are about as far from the traditional Harley-Davidson as you can get while still retaining the signature V-twin engine layout. Both are meant to be launched later this year with yet to be disclosed price points, but considering the competition in the segment sits between $20-$35,000 NZ we're not expecting them to break new grounds on price point.
But when it comes to smashing that price barrier, Harley-Davidson is at work in this area as well. In June 2019, the brand announced a joint venture to produce small capacity bikes for China and other Asian markets where the brand's giant V-twins have made little sense for prospective owners.
The joint venture with Qianjiang Motorcycle will produce 338cc motorcycles from some time this year, although we are yet to see any final product.
If Harley saw sense in being the truly global brand that it is, it wouldn't just sell these small capacity bikes in Asia and would use them, much like BMW and H-D's own Street 500, to bring younger more cash strapped riders into the fold early and build that all-important brand loyalty from the beginning of their careers.
Harley-Davidson still has a lot of potential and is far from dead. Unlike carmaker Holden, which recently was announced the be going the way of the dodo, Harley is a genuine global brand with a legion of fans worldwide.
The challenge for Harley-Davidson will be to make it through this tough transition period in the brand's lineup and successfully target the new riders they want through their "More Roads to Harley-Davidson" program.
Sure, they could trim the fat quite a bit by culling many of their more niche products (seriously, don't we have enough Softail models by now?) but the real proof in the pudding will be whether the transition away from being an American cruiser manufacturer is pulled off.
And I think Harley might just be able to manage it.
