Is Harley-Davidson Dying?

52184 · May 17, 2020

The FortNine pieces are always good, but this one is supporting what has been pointed out for years by those of us who worked in H-D shops back when they were a full-range, full-service motorcycle brand.

Anyway, enjoy!

DeVern
PS: the Dreamcycle Museum in British Columbia, used for a portion of the shoot, is a great museum/coffee shop worth the trip up there.

BC1100S · May 17, 2020

A typically well done piece by the "Fortnine Guy".

The line from Peter Fonda at the end of Wild Hogs is prescient for Harley's future success, "Get out on the highway and ride." The ones that I see rarely, if ever, get 100 km away from the city.

Regarding Dreamcycle: Excellent museum, fantastic homemade pie in the attached restaurant and a great little gift shop with some unique items to top it all off. Its in Sorrento, British Columbia....for when the Canada/US border gets reopened.

36654 · May 17, 2020

The commentary on the Reagan MC Tariff was a bit off. Those tariffs expired in 1988. Fortnine implies they lasted thru the 1990.

Yep, HD is having a hard time maintaining the bubble market of 2000-2008. The question is, can they survive on a pre-bubble sales volume. If I'm not mistaken, the Milwaukee engine and York assembly plants are what remains in the US.

pglaves · May 17, 2020

36654 said:
The commentary on the Reagan MC Tariff was a bit off. Those tariffs expired in 1988. Fortnine implies they lasted thru the 1990.

Yep, HD is having a hard time maintaining the bubble market of 2000-2008. The question is, can they survive on a pre-bubble sales volume. If I'm not mistaken, the Milwaukee engine and York assembly plants are what remains in the US.

Harley's future will be electric bikes, small and smaller. They visibly lead the industry second to only a few companies like Zero. We don't actually know what the Honda, Yamaha, Kawasaki, BMW, KTM or other skunkworks have in the mill but I bet it is a whole bit more than nothing. The real question is whether HD management is nimble enough to shed the bad biker image. Only time will tell and HD could become the Montgomery Wards of motorcycling, or maybe just the Sears Roebuck and Company hanging on for dear life while the vulture capitalists dismantle it bit by bit.

powwow · May 17, 2020

PGlaves said:
Harley's future will be electric bikes, small and smaller. They visibly lead the industry second to only a few companies like Zero. We don't actually know what the Honda, Yamaha, Kawasaki, BMW, KTM or other skunkworks have in the mill but I bet it is a whole bit more than nothing. The real question is whether HD management is nimble enough to shed the bad biker image. Only time will tell and HD could become the Montgomery Wards of motorcycling, or maybe just the Sears Roebuck and Company hanging on for dear life while the vulture capitalists dismantle it bit by bit.

The challenge will be how quickly the revenue from heavy bikes shrinks and is replaced by revenue from electric bikes (I'm guessing too quickly on heavy bikes and not quickly enough on electric bikes). With all the development capital required to keep both going during the transition, they are in deep trouble (and competition is not resting). Meanwhile, their most important customer base continues to age/die out and most upcoming millennial buyers will reject the typical HD image. Trying to change nearly 120 years of marketing and company DNA will be a huge if not impossible challenge.

I sure hope they make it, but I wouldn't be willing to bet on it (i.e. I'm not running out to buy any HD stock).

Omega Man · May 17, 2020

Meh. With 50% of the market, there is plenty of room to make adjustments....... They made it through the AMF days :eek

could only make it through part of the video. trying to make supposed investigative reporting “cute” frequently causes me to lose interest.
OM

wbrownell9 · May 17, 2020

They survived the AMF days but nearly went out of business until they were rescued when some investors bought it back from AMF and took it private - and got substantial help from the government when Reagan agreed to impose punitive tariffs on the competition. And as FortNite pointed out, they've been using excess cash (profit) to prop up their EPS numbers rather than investing in the future. Maybe these are "AMF days 2.0" but that implies there's someone out there who's willing to put up the cash to reinvent Harley. What they did last time - "different but really the same only with attitude" - probably won't work twice.

Just because they have 50% of the market this year doesn't mean they aren't in trouble. As has been said in other contexts, empires fall/you go to sleep/you go bankrupt "gradually, then all at once."

kevinsclo · May 17, 2020

Omega Man said:
Meh. With 50% of the market, there is plenty of room to make adjustments....... They made it through the AMF days
could only make it through part of the video. trying to make supposed investigative reporting “cute” frequently causes me to lose interest.
OM

At one time, General Motors had a 60% share of the U.S. market. By 1980, GM's split of the market had fallen to 46%. That was all in the past.

Sent from my iPad using Tapatalk

bigjohnsd · May 17, 2020

Business Insiders BOTTOM LINE
" Harley's best shot at a revival might not be to focus exclusively on its legacy customer but rather to build ridership in new markets and graduate those customers from small bikes to big ones. But that's an untested playbook. It remains to be seen if Zeitz can pull it off. "

Harley-Davidson's new CEO has refocused the company on its core mission. See what that means for the iconic motorcycle maker.

My personal opinion from 15 miles West of Sturgis ios that demographics are against them.

Omega Man · May 17, 2020

kevinsclo said:
At one time, General Motors had a 60% share of the U.S. market. By 1980, GM's split of the market had fallen to 46%. That was all in the past.

Sent from my iPad using Tapatalk

Sure, all those great cars they don’t make anymore.... Chevette. What a shame

Ford is not focusing on cars so much.
The market is always changing. I’m not sure how any of the motorcycle manufacturers survive specializing in $25K plus bikes :dunno

OM

pglaves · May 17, 2020

Omega Man said:
The market is always changing. I’m not sure how any of the motorcycle manufacturers survive specializing in $25K plus bikes
OM

In India, China, and the rest of Southeast Asia they don't. But they build and sell a whole lot of motorcycles to people who don't need a 1600cc six cylinder engine to be happy; or a 1250cc flat twin; or an 1800 cc flat four; or a 1740cc V twin.

Omega Man · May 17, 2020

PGlaves said:
In India, China, and the rest of Southeast Asia they don't. But they build and sell a whole lot of motorcycles to people who don't need a 1600cc six cylinder engine to be happy; or a 1250cc flat twin; or an 1800 cc flat four; or a 1740cc V twin.

Yeah

If the economy stays screwed up there may be a trend back to more models of bikes that provide reliable cost effective transportation. Most likely it would be from Japan. For the city travels, electric commuter bikes are looking like a winner to me. In the current operation, public transportation, AKA travel via cattle car, seems more than financially doomed.
OM

flhfxd · May 17, 2020

Short answer is yes.
Over the years, I've had (almost) too many HD bikes to remember. The company is not at this time, nor has ever been, a "forward thinking" company.....and this outlook typifies many of it's devoted clientele. No offence is intended here, and I don't like to use that expression of "it is what it is" but....
So unless the directorate of this legacy outfit actually embraces the "less is more" philosophy (which is counter to their core values), then they will continue to slide into absolute irrelevance. They have one foot in the grave right now... IMHO. Among the bikes I have in the garage at this time, I mostly ride my 20 year old R1100RT. And having said that, there's not a single new BMW or Harley bike that I would consider buying at this time. I would however, consider many of the older models.....
Ride safe all.

motodan · May 17, 2020

Mature market - aged market consumers. Harley may or may not survive long term however, for certain, their current long term riders will not.

cap · May 17, 2020

This reminds me somewhat of the market for "Western" stuff. As in cowboy hats, pearl-button snap shirts, boots, and more. We in America, especially in the west, romanticize the wild west era of our history, and as a result there is a large market for products that remind us of that time. Ironically, the entire "wild west era" only lasted about 20-30 years after our civil war. And so 150 years later, there remains a robust market for western goods.

I think that the Harley Davidson brand has a similar power. The brand itself is the primary value. I think that HD can continue to sell large, slow, loud, and shiny motorcycles indefinitely. There will be some small but steady demand for the motorcycles and replacement parts. They should probably figure out how to make an electric bike that looks and sounds like a Harley. And then, as they are already doing, they should find ways to capitalize on the romance of the brand. If they can do that well enough, they can survive. If not, then some hedge fund will buy the company just for the brand -- and then they will license some other motorcycle manufacturer to build Harley reproductions.

Cap

swall · May 18, 2020

Around 1980, one could have done a thread, "Is BMW Dying?" I remember my dealer, old Ted, commenting, "BMW is just about done. They might as well close up that Spandau prison".

36654 · May 18, 2020

Develop new products that "might" appeal to new customers or double down on the market for the no helmet, ape hanger, straight pipe (NHAHSP) market? From what I see, there's a lot more NHAHSP bikers on the road in my area than ATGATT riders. The NHAHSP market may not support HD sales at the near 300,000 level, but the mid-to-late 1990's levels of ~150,000 units might be sustainable.

flhfxd · May 18, 2020

Acronyms ....

NHAHSP?
ATGATT?

36654 · May 18, 2020

flhfxd said:
Acronyms ....

NHAHSP?
ATGATT?

I just made up No Helmet, Ape Hanger, Straight Pipe. ATGATT = "All the gear, all the time" is an old one.

pglaves · May 18, 2020

swall said:
Around 1980, one could have done a thread, "Is BMW Dying?" I remember my dealer, old Ted, commenting, "BMW is just about done. They might as well close up that Spandau prison".

Indeed, and then in '83 the K100 was introduced in Europe. And then they brought the K100 to the US in '85. Then the K75C and K75T in '86 and the K75S in '87 and off to the races they went with modern design motorcycles, up to and including the K1600. And the R1100 series and descendants up to and including the wethead 1250s. And the smaller F series and G series bikes. Never a dull moment after that huge "Ah ha" moment in the '80s.

To add to that, the stagnant line of air cooled opposed twin motorcycles that were becoming their death now has as devoted a following as you will find anywhere, other than among the HD die hard biker type fan boys. But BMW evolved in a spectacular way to survive. HD hasn't done so yet, except their reliability has increased by a couple orders of magnitude.

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