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View Full Version : Business article on HD and future strategy: What should Harley do now?


alvycolt45
27th July 2010, 14:32
I haven't seen anyone post a link to this article so I though I would. There is a lot of talk on xlforum.net about Harley's marketing to young riders and whether HD should produce a smaller entry level bike.

http://www.biztimes.com/nf/uploads/Image/BTM%2007%7C23%7C10%20Upload/HARLEYJuneau3(1).jpg

This article from the July 23, 2010 Milwaukee and Southeastern Wisconsin Business News addresses these questions and also has some good insight into the popularity of the Sportster models.

Article Link --> http://www.biztimes.com/news/2010/7/23/what-should-harley-do-now

Here are a few interesting (and sometimes conflicting) quotes from people in the article:

"Connecting with a new generation of customers is one of the most difficult challenges for any business, especially for companies such as Harley that have a well-defined brand that appeals to baby boomers but has not struck a chord with younger riders."

"To actively engage with younger riders, Harley-Davidson also needs to effectively use social media applications such as Facebook, Twitter and others"

"To attract younger customers, Harley-Davidson should consider making more customizable motorcycles, smaller and more fuel-efficient models or styles that incorporate more technology"

"One of the greatest risks Harley-Davidson could take would be introducing a sport bike or line of sport bikes designed to compete with Japanese and European motorcycles"

"if Harley moves some production offshore, the impact to its brand may only be short term, especially for younger buyers."

"(HD) became the best-selling motorcycle to young riders in 2008, and it has grown that position since"

"Last January, Harley introduced the Forty-Eight, which has become the company’s fastest turning motorcycle, meaning that it sits on the showroom floor for the shortest amount of time of any of the company’s models."

“the average Harley customer is a 47-year-old white male getting older at a rate of six months every year for the last 20 years.”

"Harley fell into the Starbuck’s trap, so focused on growing revenue that its uniqueness eroded."

"By expanding sales without fundamentally altering its bikes year after year, Harley also created a formidable competitor – used Harley’s that erode the historic investment value of a Harley."

http://www.biztimes.com/nf/uploads/Image/BTM%2007%7C23%7C10%20Upload/HARLEY_SPORTSTER-xl1200n.jpg

DIESEL
27th July 2010, 14:44
Historic Investment?? Vehicle is NEVER an investment...

They also raised the prices of the bikes, which will limit younger and first time buyers.

Wasn't buell supposed to compete with the sport bikes?

moving production off shore? I stop buying harley bikes.

SomewhatLost
27th July 2010, 15:39
Historic Investment?? Vehicle is NEVER an investment...
sure it was.... back in the 90's when there was a waiting list to buy a HD...

They also raised the prices of the bikes, which will limit younger and first time buyers.
and repeat buyers/upgraders/everyone else...

Wasn't buell supposed to compete with the sport bikes?
nope...
not from HD's stand point at least... no full fairing bikes allowed...

moving production off shore? I stop buying harley bikes.
yea, take the one and only thing you got going HD and ditch it... good idea...
let me know how that works out for Mr Davidson...:frownthre

AzDon
25th November 2010, 21:36
It's already in motion.... the xlc's have been dumped for "dark customs". There is no softtail customs anymore as even the blacked out night train has been discontinued. The 18K dyna wide glide has become a 14K "dark custom", so I guess the moco is admitting that less chrome saves costs.
If you want to buy something with a 200 back tire, Harley no longer offers it and the only model you can still get with a 21 front is a DWG with black rims.
I'm not on the same page (apparently) with the current trends as HD percieves them and I have sold my HD stock as a result

JoeFriday77
25th November 2010, 23:04
Harley has worked hard on the 'experience' portion with HOG and the local HOG chapters. I have not seen another brand do as well with that concept as Harley which makes them unique. However, my experience so far has been the local HOG chapter is a fraternity of 50+'s. So, while Harley does well with the 'experience' portion, it is for the wrong group if they are looking for growth.

It seems that most of Harley's focus at the moment is on baggers where the money is. Better margins and more add-on stuff to sell, so it makes sense from a dollars perspective. However, I don't think that anyone could make a strong case that the baggers cater to a younger crowd.

Harley looks to be a bit schizophrenic at the moment by trying to throw out a few bikes to see if they can snag a younger crowd while at the same time pumping out baggers as fast as they can and raking in the dough. But with little in the way of pulling the younger and new riders into the experience, it's just an american made bike to them.

I think a reality is that it is forums like this one that keeps people engaged and provides a better experience than HOG on a more equal basis. Did I just say that out loud?

mckey73
26th November 2010, 00:40
Now would be a good time for another american bike company to go for the jugular. If someone out there made a good performing reliable bike that went for $5k even the used harley market would take a hit.

jharback
26th November 2010, 01:46
It's kinda' funny if you think about it. Our younger generation is mostly into the Jap Bikes but, there seems to be a good portion of the Japanese younger generation that is really into Harleys and modifying them. Seems that Harley might be able to export that younger Japanese mindset to the younger generation in the states. Just a thought.

jimmyess333
26th November 2010, 02:23
Just bring back the blast engine on 2 different bikes, a sporty one and a traditional looking bike.
Kawasaki did this successfully for years with the cruiser Vulcan 500 and sport Ninja 500.
Same engine in 2 states of tune.

Of course HD would overprice it and scratch their heads wondering why it's not selling.

Loner
26th November 2010, 02:43
and now they got India, and now the Indian built Royal Enfields are coming here, my local Triumph dealer is going to carry them.

Some problems that I see and this is my opinion-observations
making a affordable bike, HD probably cannot afford to make it themselves and expect to turn a profit, it is said the Buell Blast was sold at a lost, I can't back that up with any truth so take that for what is worth, bringing in a import small displacement bike would be feasible but to many of the hd faithful it would taint or ruin the HD brand. some people forget that HD sold small displacement bikes for many years, and even sold imported bikes such as the Aermacchi,
another issue is perceived value per dollar the younger people see R1's,GSXR's.CBR's Ninja's,Speed Triples, selling for the about the same cost of a top end Sporty or Dyna
and compare a sub 450lbs bike that can do low 9-10 sec 1/4, go close to 180mph and has around 150hp with all the latest electronic devices and since they grew up with all this tech they see the 600lb Dyna as old technology.

Harley is a spot, I think they need to do (and are probably doing) is what any of us would do when the income goes down you eliminate what you can and concentrate on what you need, HD did this with the XLX back in 1983 a bare bones sporty and kept the price to 3995 and when the evo came they cashed in on their heritage with the 883 displacement and kept the price down back then you get a Car or bike for 3995 anyone remember the awful Yugo, back then I floated around from brand to brand Kawi, Honda a Yamaha or two and a couple of Suzuki, I didn't consider a HD at all even when HD came along with their value back three year deal on the 883.
another issue is trends such as black bikes, chrome bikes, sport bikes touring bikes, these trends come and go problem with manufacturers is takes time to develop,test and market a vehicle up to five years in some cases. the trucks cars and bikes you and I drive and ride were developed back when HD still used carbs.
Blacking out or cutting back on the chrome and shiny stuff is a easy and less expensive approach, but us riders have been doing blacked out parts and primer black paint jobs for decades.
Do I have the answers no, but I can suggest,speculate and flat out take a wild guess but that has been done.

Yes HD needs to bring in younger riders both male and female but not every rider is attracted to the Sporty it is not a beginners bike it does require some advanced skill and respect to ride, HD could do a small displacement bike styled like a sporty similar to the Honda Rebel, but does HD have the will or resources to produce it? the will I would personally say no, resources that is a maybe, right now HD is having labor issues the new Tier pay scale is not popular with some folks but I'll save for another time.

jharback
26th November 2010, 03:47
The other thing I was thinking that Harley could do, especially with the sportster, is offer a sort of "Build Your Own Bike" option. They could have the basic Sportster Engine in the frame and then let you pick the front end; normal, mid glide, wide glide with narrow or wide tire. Then choose your rear end;. normal or wide. Also allow you to pic your bars, forward, mid, or rear sets. Well you get the idea. This shouldn't be too expensive for them either because they basically wouldn't have to re-tool anything.

Rehit
26th November 2010, 06:00
they had better already be doing something...
when the air cooled engines go the way of the dinosaurs i am afriad HD will rapidly go as well.
they will never be able to market enough bikes with V Rod engines to survive.

jimmyess333
26th November 2010, 23:10
they had better already be doing something...
when the air cooled engines go the way of the dinosaurs i am afriad HD will rapidly go as well.
they will never be able to market enough bikes with V Rod engines to survive.

Why use a Vrod engine?
Couldn't they just use the current bottom end and redesign the jugs and heads to permit water cooling?
If it's possible to water cool single cylinder dirt bikes and 250 twin Ninjas I don't see what the problem is in adding it to the current line of Harley V-twins.

aaandht
26th November 2010, 23:27
Why use a Vrod engine?
Couldn't they just use the current bottom end and redesign the jugs and heads to permit water cooling?
If it's possible to water cool single cylinder dirt bikes and 250 twin Ninjas I don't see what the problem is in adding it to the current line of Harley V-twins.

It takes a lot more than just slapping on new jugs and calling it a day. Where are you going to mount the water pump? What is going to drive it? The whole engine design has to be re-done, and that takes time. I don't doubt there is currently an engine being developed, but it would take at least 5 years

jimmyess333
27th November 2010, 04:28
It takes a lot more than just slapping on new jugs and calling it a day. Where are you going to mount the water pump? What is going to drive it? The whole engine design has to be re-done, and that takes time. I don't doubt there is currently an engine being developed, but it would take at least 5 years

There's not much to redo on the bottom end.
The cams are gear driven which gives HD a prime place to drive the water pump.
Possibly, the cam cover would be the only thing needing to be changed down low. If the pump bolts into the cover from the outside with a shaft meeting up with one of the gears it could work but the water plumbing below the jugs would be external. Maybe run it along the top of the cam cover then along the frame.
There could be independant thermostats at each head allowing more even temps between the jugs.

twotoneXLH883C
27th November 2010, 11:57
Funny, but the younger generation look at these import bikes as being so great. In all honesty though these bikes that are capable of high speeds are USELESS on public roads and unless they are taking them to a track, which most don't, you can't take advantage of all that HP and speed.

I'm sure that HD brass is sitting in their offices discussing what's best to ensure the future of the MOCO. But you can bet that they will still push the baggers.

CBAS5
27th November 2010, 13:11
"One of the greatest risks Harley-Davidson could take would be introducing a sport bike or line of sport bikes designed to compete with Japanese and European motorcycles"

They had it with Buell's 1125CR and they screwed it up. They should have let Buell build the bikes they had in the pipeline instead of neutering the idea's. There was an article that Buell had a 1350cc bike with an aerocharger turbo that was more reliable than the air cooled buell's and fast. Buell had a lot of good ideas that were killed and having Buell dealerships in Harley dealerships was a mistake.

I don't have much confidence in this new CEO. He is a bean counter. I see him cutting costs by making the bikes cheaper and taking more parts and manufacturing oversea's. Then I stop buying even the traditional Harley's.

bud095
27th November 2010, 13:57
I see him cutting costs by making the bikes cheaper and taking more parts and manufacturing oversea's. Then I stop buying even the traditional Harley's....that about sums it up for me...bud

hasselme0
27th November 2010, 14:32
My Opinion, they should go retro just as the car mfg"s have done. The "build a bike" idea would be cool although in the end it might be pricey. They need to keep the mfg in the US not India or anywere else!!

Loner
27th November 2010, 14:55
The current CEO is a corporate raider, cut costs bring up the bottom line.
Many a CEO had done it in other companies Kmart did it a few years ago then bought out Sears and then they brought in a New CEO when Sears Holdings Corp was formed
They cut costs, people, stores and the end result is a crappy company with employees with no morale and now they are doing damage control.

These corporate raiders don't care about corporate culture and heritage and a company like HD has generations of it.
These suits only see the dollar amounts,spread sheets, projections and net profit margins.
Yes HD is a business first and foremost, but it is also an Icon and part of America's cultural identity as well and some in the Moco never forget that.

BTW here is a link HD cut production dealers can't get the bikes they want sort of the late 80's early 90's.

http://www.jsonline.com/business/110891269.html

and I like this comment "Still, too many dealers are discounting for our taste," Kennison said. "We aren't seeing prices rise quite as much as we thought. Dealers are still willing to discount, which is a surprise given the lack of inventory."

That is definitely a suit talking the dealer is trying to keep his business going and it is better to sell a 10k bike for 8k then have a 10k bike collecting dust and costing the dealer money.

stu Elpaso
27th November 2010, 15:13
ok .... step away from the ledge and slowly back away:D


Harleys are like the stock market, look at this as a buying opportunity.

a little story

this summer I pull into the local watering hole and all the old farts gave me the "girls bike" and "I'D NEVER OWN A PIGLET" crap.

So I smoked outta there thinking what the duece is wrong with these posers.

at the next stop lite a kid on a 80's honda pulled up
and said" that bike is awesome, as soon as I can afford one I'm there."

he said "like my dad says inside every rice rider is a Harley
rider waiting to get out."

so when the price meets the market they will sell.

chrisg
28th November 2010, 22:02
Your base Sportster A: costs too much B: weighs too much C: the ad campaigns are biker/poser biased.
IMO the XLX started it but really the 883 Evo was and would still be the ideal entry Harley. Light weight, small, "easy to use" power, good handling chassis, Harley sound, low price, and hop-up ability if later desired. Plus lower insurance price. The MoCo has screwed that up with rubber mounting (a feature not needed as a Evo Sporty,IMO, would cruise nicely between 55 and 65, and feel like the H-D experience everybody says is so important) and the extra weight that came with it. Now they feel the need to lower everything to the point of it being uncomfortable and dangerous when cornering (something new riders are already uncomfortable with, now add in scraping and unnatural chassis movement). If you want total neophytes to feel comfortable in the showroom, then that should be a dealer added option to lower it to the point of negative function.
Union employed factories might have something to do with price. But, I think going back to a basic, well performing, lighter weight bike, might be the ticket; Get the price down ( a Sportster is a major investment these days even for me, let alone a younger new rider), get the trade-in up (the original trade it in for a BT for what you paid within one year was a good deal) , put some suspension back on it so it can go around corners without dragging hard parts immediately, so as a rider progresses their ability, the bike can handle it (This is about riding motorcycles and enjoying the sport,honing your skills, not what you look like doing it!)
OK, that's my fix for new riders and entry level Sportsters. It worked before.

jimmyess333
13th December 2010, 03:15
ok .... step away from the ledge and slowly back away:D


Harleys are like the stock market, look at this as a buying opportunity.

a little story

this summer I pull into the local watering hole and all the old farts gave me the "girls bike" and "I'D NEVER OWN A PIGLET" crap.

So I smoked outta there thinking what the duece is wrong with these posers.

at the next stop lite a kid on a 80's honda pulled up
and said" that bike is awesome, as soon as I can afford one I'm there."

he said "like my dad says inside every rice rider is a Harley
rider waiting to get out."
so when the price meets the market they will sell.

I know a few guys on japanese bikes who can easily afford a Harley but couldn't care less about owning one.
The funny thing is they have never given me any crap about owning one.

Tin Man 2
20th December 2010, 20:40
Try this on for size, Harleys are and have been asperational products. People grow into Harleys, If HD brought out a cheaper bike it would just dilute the brand. You want a cheap Harley, just buy a Sporty, the price is spot on to compete with the competitive models. Chasing the youth market is a mistake, there is no real money there. Let the Kids buy what ever they want, as they age they will turn to Harley just as their fathers did. Harley puts their R+D into the high end Baggers for a reason, Thats where the money is, the vast majority of older riders with money buy premium products, Harley, BMW or God forbid a Gold Wing. Check the resale on 600cc Rice Rockets, Hint, it Sucks.

TinMan_4L
20th December 2010, 21:13
Try this on for size, Harleys are and have been asperational products. People grow into Harleys, If HD brought out a cheaper bike it would just dilute the brand. You want a cheap Harley, just buy a Sporty, the price is spot on to compete with the competitive models. Chasing the youth market is a mistake, there is no real money there. Let the Kids buy what ever they want, as they age they will turn to Harley just as their fathers did. Harley puts their R+D into the high end Baggers for a reason, Thats where the money is, the vast majority of older riders with money buy premium products, Harley, BMW or God forbid a Gold Wing. Check the resale on 600cc Rice Rockets, Hint, it Sucks.

I agree with ya brother

chrisg
24th December 2010, 22:05
Bottom line is they are doing a good job with a variety of well made, US made, cruisers and standard type motorcycles. Do they meet everyone's criteria? No, mine included per my previous post. But you really can't argue that they aren't putting out a well rounded product line that exceeds most low price import build quality and matches their price point (ie Honda RS). Triumph (Bonnies)only trumps them because they have suspension and a little better ergonomics.
They are headed in the right direction with the SuperLow in that they realized lighter, different diameter wheels with radials actually do work better. Are they going to have a rush of new, young riders wanting to buy H-D's. No. But those who do want to make the commitment to owning an H-D have a much better, reasonably priced, place to start. So what if your average snot nosed punk dosen't want or can't afford an H-D. H-D desire comes from real world exposure and something clicking from within. It happened to me as a teenager and I was determined (buy working and saving) to make it happen. And I did.
Yes sales right now suck. The economy sucks as a whole and people don't have a lot of expendable money.A new motorcycle is a big expense even to those of us that live for these things. But there will always be people who desire to own an H-D and will do whatever it takes to make it happen. Stop worrying about it so much. They haven't run out of people who want them yet in all these years, so I somehow think they will be OK.

SomewhatLost
29th December 2010, 10:46
Harley puts their R+D into the high end Baggers for a reason

Harley has R+D???? when did this happen???

GregC_AZ
29th December 2010, 14:02
Try this on for size, Harleys are and have been asperational products. People grow into Harleys, If HD brought out a cheaper bike it would just dilute the brand. You want a cheap Harley, just buy a Sporty, the price is spot on to compete with the competitive models. Chasing the youth market is a mistake, there is no real money there. Let the Kids buy what ever they want, as they age they will turn to Harley just as their fathers did. Harley puts their R+D into the high end Baggers for a reason, Thats where the money is, the vast majority of older riders with money buy premium products, Harley, BMW or God forbid a Gold Wing. Check the resale on 600cc Rice Rockets, Hint, it Sucks.

HD is a premium brand like Porsche, BMW, Mercedes-Benz, Apple Computer. None of these manufacturers produce a cheap product and no one is saying they are doing the wrong thing. There just is no money in a $10000 car or $500 computer. Let the other guys scramble for the crumbs while the big boys eat at the top table.

ParrotHead
29th December 2010, 14:22
Harley has R+D???? when did this happen???

They have just done minor things in the last few years like the XR1200, Super Low, redesigned the frame on the touring bikes, ABS and cable less throttles on the touring bikes, etc. Nothing really radical.

Try this on for size, Harleys are and have been asperational products. People grow into Harleys, If HD brought out a cheaper bike it would just dilute the brand ...

I agree with this. Anyone remember when Cadillac had brought out a rebranded Chevy Cavalier called the Cimaron? That didn't work out too well either.

http://images.businessweek.com/ss/09/10/1028_50_ugliest_cars_of_past_50_years/image/021_cadillac_cimarron.jpg

Instead, HD is trying to appeal to the younger crowds with their blacked out bikes and some of the ads they have run.

SomewhatLost
29th December 2010, 16:27
They have just done minor things in the last few years like the XR1200, Super Low, redesigned the frame on the touring bikes, ABS and cable less throttles on the touring bikes, etc. Nothing really radical.
XR1200 - take a current model sporty, grab some fancy looking parts out of a bin, call up showa and get some modern forks and toss it all together really doesn't involve that much R&D, but I guess I will give you this one...
Super Low - um, they put shorter shocks on an existing model... no R&D required...
redesigned the frame on the touring bikes - what they go and do that for? and when did they do it? but if true, I guess that may involve some R&D...
ABS - HD went with ABS? anyway, they probably just bought someones off the self system... I doubt they had any R&D for this... well, they probably spent a fortune trying to figure out the most effective place to put the 'bar & shield':rolleyes:
cable less throttles - ? why? whats wrong with cables? but I will give you this...

but seriously, if you add it all up, I will stick with my "what R&D?" comment:smoke:laugh


note: I am still pissed off about the whole canning Buell thing... so I may possibly be biased...

Tin Man 2
11th January 2011, 04:16
Somewhatlost, The XR1200R engine has many enginering changes from the Evo engines, The Superlow has new wheels with low profile radial tires,along with progressive rate shocks. The Tour bikes got a new frame in 09 to get rid of the dreaded "shimmy"they had in the past, ABS is available on many of the high end HD models,and the big bikes have Fly by Wire throttle control. The R+D is there, its just not obvious by a quick look, Its important to the core buyers to keep the traditional look. Sorry about Buell, but they were just"Quirky"and never sold well, this is bussiness not Charity.

The OLD guy
15th January 2012, 18:30
Not worried about HD at all.
Bean on every honda/Kawi/susi/yamy i can think of and the honda v4's was the best in quality and riding, but they could never keep the trannys in 1 peice.
Nighthawks screemed, but got re'engineered and ruined.
Just about every other bike out there is 40K mls tops, there all just too high strung and abused.
(Wings and V'gers exempt.... cuz their upteen thou to buy.)
So,
HD is the only bike out there worth the cash and time.

BUT,,,,,, why not do a Harley V4 and marry it to a 5 spd tranny?
Take a pair of 883 blocks, fuze'em together.
Smooth power, harley quality, and i bet it will sound awesome.

They have a v4 harley in the museum, but i think its an old shovel build.

yozer13
16th January 2012, 00:21
imo they dont need to compete with the full on superbike market its like ferrari or lamborghini bringing out a estate or family wagon diesel thats under 10k or a supermini 1l first time driver/ nanny car... not what the brand is about. with HD people think US made v2 not a plastic inline4.

i think they should make a "death mode" sporty, something like a 1200s sorta thing with a buell motor in it and usd and big brakes and low on the back with tidy shocks ,chopped fender. but then it wouldnt have the travel to handle well and it would scrape round right handers, but it would go like sh*t off a shovel stop on a button, besides draging pipes is fun =] , its like with sports bikes and getting your knee down or how thick your "chicken rails" are.

i mean the amount of cammed 1250s thats are on the deck or running struts i think it would be a seller.

but thats not everyones cup of tea.

sorry if i just typed a load of poo.

Mattbastard
16th January 2012, 01:16
Not worried about HD at all.
Bean on every honda/Kawi/susi/yamy i can think of and the honda v4's was the best in quality and riding, but they could never keep the trannys in 1 peice.
Nighthawks screemed, but got re'engineered and ruined.
Just about every other bike out there is 40K mls tops, there all just too high strung and abused.
(Wings and V'gers exempt.... cuz their upteen thou to buy.)
So,
HD is the only bike out there worth the cash and time.

BUT,,,,,, why not do a Harley V4 and marry it to a 5 spd tranny?
Take a pair of 883 blocks, fuze'em together.
Smooth power, harley quality, and i bet it will sound awesome.

They have a v4 harley in the museum, but i think its an old shovel build.

Do your research old man, it's called the Nova, and they canned it to make the Evo.

Also, maybe in the 80's when your hip could still stand being swung over the sky high seat heights of the metric "crap" you claim to know can't take more than 40K miles you should have spent more time actually paying attention to the odometers of these bikes rather than cleaning up oil stains from Shovelheads and the other AMF garbage. All my metric bikes from that same period had between 30k and 50K, were super neglected when I got them (oil smelled like gas, never had valves adjusted, 10K mile oil, etc...) with a lot more reliability than any HD from the 80's.

Harley quality? I'd love to see you find me a metric crankshaft that's out of true. When's the last time you seen a metric cam chain tensioner crap out in 20K miles?

You wanna see who's the mileage king? Go to Micapeak.com, check the registries, and sort each bike my mileage.

Don't get me wrong, I like the HD's I've had and still have, but the Japs are better engineers.