This article in Barron’s on Harley’s sales popped up recently. The bottom line is that Harley’s sales are dropping more than predicted, and things are not looking good in Milwaukee. It’s simultaneously interesting and disappointing. I don’t like it when any motorcycle company has bad news, and I’m hoping that Harley gets it turned around. Harley is introducing new, smaller motorcycles, and I think that’s the ticket back. The question is: Can they do it quickly enough?
Harley has a tough row to hoe, having built their business selling overweight, underperforming, uber-expensive bikes to a clientele that is aging out. The smart move would be to acquire a small motorcycle manufacturer or importer with a proven track record and to then build on that success, but hey, what do I know? I know there aren’t too many people left willing to shell out $20K to $40K for chrome, conchos, and leather fringe. I also know that you can’t get inventory fast enough when you’re selling new motorcycles for $2K, or maybe $4K.
We’ll see.
Your thoughts on all of this? Leave us a comment and let us know where you think the market is going, why a great old company like Harley is having such a tough time in a booming ec0nomy, or any other topic.
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As a staunch Harley rider, I’m sad to see this wonderful brand having problems, but I fear it’s inevitable. I’m not so out of touch with the younger crowd not to recognize that many of them are “risk averse” and the idea of leaving their parents’ basement to go out into the world and explore let alone on two wheels is a real challenge. It’s much easier – and cheaper – to stay home and press buttons!
Trevor, I think that is perhaps part of it but not the major factor here. I still have a lot of faith in young people (as a recently-retired college professor, I haven’t seen the shift in young people’s attitudes that most folks talk about, and that’s having observed young college folks for three decades). I think the motorcycle industry’s problems are that the bikes just got too big and way too expensive. Bring a quality bike to market at a low price and people will buy them, as is the case with the CSC TT250 and SG250. When bikes cost as much as cars, you lose folks. The marketing wizards of the motorcycle world, for the most part, seem incapable of understanding this.
You read about the down turn in the motorcycle industry and a lot of theories out there about what the problem exactly is? I think to a certain degree all these theories are part of the problem but not really the BIG problem. I think the BIG problem is rather simple. The BIG problem is motorcycles cost way to much now days. Yeah I have read the Cool Aid label that said adjusting for inflation they are about the same price they have always been but we live in interesting economic times. Other then maybe the top 10% of the population wages have not kept up with inflation. So even though that $15,000 motorcycle is technically the same price they have always been for 90% of the population its now out of reach. If any market is left at all its in smaller more affordable motorcycle’s. Thanks to modern technology a smaller bike today is not like your father’s small motorcycle!
You will notice that in markets like India and some Southeast countries motorcycles are doing better then ever. However these are not BIG over priced machines but simple low cost smaller displacement machines. Not only are small bikes cheaper to buy but more economical in operation so its a win win situation. Even in the USA small bikes are selling rather well and you even see excitement for the new models now. 10 years ago people would only lough at them. The bigger more expensive machines also build a lot of excitement but only in discussion and only a handful of people buy them!
I also think the antiquated way dealers do business is part of the problem. Instead of adapting they are desperately trying to keep margins in place. So that $4,000 little Monkey 125 they want another $1000 in fees that technically should not even exist in the 1st place. So that $4,000 overpriced motorcycle is now 25% higher? Oh but its very popular and sold out they say! Its only sold out because only every other dealer gets just one. This is a form of market manipulation in my opinion that hurts the consumer during a time they can’t take much hurting!
Not sure what the fix is? I think the problem goes much above anything our hobby can solve on its own. Until the 90% are making more money adjusting for inflation the downturn will remain in place. Its not just motorcycle industry but many others well. Retail in general is seeing the same problems!
Extremely well said, Chris. Thanks for your inputs!
I don’t have much confidence in Harley making many correct decisions. I wonder if it is part of the large US corporate “committee” mentality. In 1994-96 Chevy set records with the Impala SS, Corvette V8 power in a 4 dr sport sedan. They discontinued it and gave the market to the German and Japanese. Ford discontinued the Ford Ranger which was a hot seller and gave that market to Toyota. They stopped production on the original Ford Bronco when they had almost no competition. I guess I may have 20/20 hindsight. However, they are getting paid to have a bit of foresight.
Harley’s cost a lot of money. The Street model is low priced but I’ve yet to ride one or see one on the highway. I did see one parked once.
Motorcyclists as a group are old and getting older. Some people, like Pandya, are trying to get new blood (probably a bad choice of words) into motorcycles.
Guys like me are more into vintage stuff.
All the new Scramblers look great.
I’d give you the answer to H-D’s sales problem but no one would listen.
We went through this in the 1980’s with the Japanese “Big Four”. Motorcycling is about to enter a new era. Harley made their own bed, the are the Obama of motorcycles, they were the dividers, and divided we fall. As the Grateful Dead stated, we shsll survive. Hopefully with fewer overpriced overweight underpowered barges…….
You nailed it…it would seem smart to just buy another company and go from there, but maybe the Aermacchi Harley and MV stories are still in the corporate memory. Just my thoughts. Yes, I still own and HD a Sporty and have owned a bunch with other brands over the years, but am motorcyclist first not Harley guy.