Most companies understand that continuing to do what they have been doing unsuccessfully will not lead to a different outcome. Unfortunately at Harley Davidson, even the concept of that idea has fallen on deaf ears.
One need only look at Harley Davidson’s lineup of motorcycles for 2024 to see the myopia that prevails at Harley. The release of its models for 2024, except the Pan American, looks almost the same as every release for the last ten years. The lineup exemplifies exactly what young riders do not want in a motorcycle.
And according to motoadventurer.com of October 19th, 2023,
“In 2021 the two-tone Pan America Special carried a suggested retail price of $20,249 US. Today, low-mileage Pan Am Specials can be found for 14 grand or less on Facebook marketplace. In the time that I’ve been watching used motorcycle values, I’ve never seen the value of a new motorcycle take a nosedive this steep. Motorcycle dogma clearly states: “Harley’s hold their resale value”, so why is the Pan Am tanking”
“When the bike was launched those most excited to have one ran to their dealer and pre-ordered one. When the dust settled, the most anxious customers had already made a purchase, and it evolved into a bike chasing a rare customer.”
On top of this reality, is another fact. That being that there are enough cheap, used Pan Americans on the market, that almost no one is willing to pay full price on the purchase of a Pan American. On top of that, in August Harley had to recall 65,000 motorcycles due a faulty part that could increase the risk of a crash.
To be blunt, Harley seems bent on proving that despite all the information it has that illustrates that there is a significant problem, Harley will remain, tone-deaf. The lineup is, heavy, underpowered, expensive, and slow. The new generation is not interested in buying motorcycles that with cosmetic changes due to technological advancements, resemble their grandfather’s motorcycle.
I asked a group of younger motorcyclists at a dealership this last week what they thought of Harley Davidson, and whether they would buy one. Their answers, were universally negative, with two in particular sticking in my mind.
“Sir, you can put lipstick on a pig, but it’s still a pig.” All of the eight or so younger men nodded. Another comment was similar, “Who does Harley think is going to buy these land yachts? They are all overpriced, heavy, slow, and underpowered. They handle like a barge, so why would I ever buy one?”
I just nodded, neither affirming nor denying their opinions. On February 8th, Harley Davidson will announce its fourth quarter financial results. To date in 2023, these are the financial indicators up to September 2023.
Revenue: Down 6.04%
Net Income: Down 23.94%
Net profit margin: Down 19.07%
Operating Income: Down 34.73%
For a company that is losing market share every year, one would think that producing motorcycles that don’t sell is a lose-lose proposition. But at Harley Davidson, reinvention seems to be a symbolic exercise.
Harley has a problem that it does not seem to be able to surmount, and that is that the older generation of buyers are the only ones buying Harley products, so they continue to market to an ever-decreasing market segment. At the same time, they are supposedly trying to attract young riders and change the culture at Harley Davidson. This only further alienates their existing buyers. Add to that the fact that today’s motorcycle culture of young buyers eschew Harley Davidson for all the reasons previously mentioned and it’s hard to see how Harley will turn this around.
Time is not on Harley’s side. This year there will be at least four new motorcycle entrant brands that have significant resources and are doing exceedingly well marketing their products across the globe. For the first time, these companies will arrive on America’s shores. Based on the sales of these products in the Asian and European markets, their sales in the US will significantly affect the sales of Harley Davidson in the coming years.
Younger riders want bikes that fall into a different motorcycle segment. Most are looking for bikes under 800cc with higher horsepower, less weight, less expensive, and that are highly reliable. Companies like CFMoto, Kawasaki, Honda, Yamaha, and Suzuki clearly understand the market, as the vast percentage of motorcycles they produce globally fall into this category.
Meanwhile, Harley Davidson continues to plod on into the gale, resolutely immune to change. It may be a self-fulfilling prophecy at this point, but only time will tell.
In the next article on Harley Davidson, we’ll look at Harley Davidson’s strategy to enliven the company’s fortunes, as well as Harleys final financial report for 2023.
Ciao…
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