Harley announces its future plans

Harley-Davidson has announced its ‘More Roads to Harley-Davidson’ plans, which include expanding the variety of market segments the company caters to and how it plans to sell bikes to riders not inspired by its existing offerings.

The release follows my ramblings here and there’s lots of hyperbole, but if, at its core, Harley-Davidson does come through with changes which make more of its bikes appeal to more riders, that’s got to be a good thing.

There are lots of problems facing Harley: the American President, for one, which is why the Motor Company is looking at setting up a plant in Poland. But beyond that the new Softails haven’t sold particularly well (I thought they would, but nope) and the customer base is aging – maybe riders in their 40s and 50s simply aren’t interested in Harley-Davidson cruisers and tourers like the generation now in their 60s and 70s was.

Which brings me to the Pan American – Harley’s ‘first’ adventure touring motorcycle. The company had one in the Buell Ulysses, which Chris Pickett enjoyed riding a lot more than he expected, and of course HD made thousands of dirt-road capable touring bikes decades ago – they just weren’t called adventure touring bikes in those days, they were just motorcycles.

The Buell Ulysses, a Harley Adventure bike. Sort-of.

Anyway, I’m terrible at predicting the market when it comes to Harley-Davidson – I thought the V-Rod would be successful, and the V-Rod motor would end up powering most Harleys. I could barely have been more wrong, with the bike being a failure in most markets (although it did sell well here in Australia) and the engine only ever being used in a handful of V-Rod variants.

I’ve done thousands of miles aboard many Harleys over the years, but I’m not inspired to buy any of them – the price, performance, capability, style and desirability equation just never adds up. They do hold their value better than many other brands, but the high price in the first place means you still lose heaps in real dollars. Most Harleys’ performance has improved in recent decades, but they are still slow, and even slower handling. Dry weight is high, making manoeuvrability poor. Their style is second to none, but only if that style does it for you. Most Harleys are tough to live with day to day, but they can and are nice to ride on some roads in some circumstances.

I ride in those circumstances so rarely there’s nothing in the current line-up I’d buy even if I won Lotto. That can’t be said for many other brands – a big Lotto win would have me buying a Ducati Scrambler, KTM 1090 Adventure, Yamaha MT-09SP, Kawasaki KLR650 (for the desert trip)… maybe even one of the latest Moto Guzzis, because they look cool.

When I test bikes for publication, I write on the basis the reader is considering buying the bike – so I’m not too critical of cruisers which don’t handle like sportsbikes, or sportsbikes which don’t like dirt roads.

With Harleys, I took the attitude of testing them for riders considering their first Harley. I tried to communicate fairly, so if someone who read my test and then test-rode one, they’d agree with my thoughts. However, I was always running into the person who would never consider buying a Harley telling me I was too soft on the brand or model. From their perspective, I was.

But if I took that attitude to bike testing I’d have to say every LAMS bike is too slow, no commuter handles properly, so sportsbike is comfortable enough, none of which is true – to the people who buy them.

When I’ve been asked which bike someone should buy, I usually answer “the bike you really want”. Nothing else will measure up, unless other factors come into play.

I’m currently riding an old Yamaha FJR1300. It hasn’t done many miles but it’s 12 years old – something most people won’t consider, which is why it was cheap, despite meticulous maintenance and looking like it’s never even fallen off its sidestand.

It has a wonderful motor, very comfortable riding position, carries heaps via three cases, has excellent weather protection via the big fairing and I even like its style. It doesn’t handle particularly well, but a new rear shock and tyres might fix that, at least to an extent – it’ll still be heavy, although all those miles on Harley tourers means the big Yamaha doesn’t feel particularly heavy.

The Ultra I rode from Milwaukee to New York. Great ride, heavy bike.

Is it the bike of my dreams? Of course not. But for the money it’s amazing.

Harley-Davidson traded on its history, its style and its bad-boy image for decades. But now the bikie gangs are either in jail or on the nose and a Harley is what the old dude down the road rides. I’m not sure the ‘cool’ factor is there so much anyway anymore.

So I welcome these announcements from Harley-Davidson. It’ll be good to see the company enter new market segments, and I’d like to see the company have bikes which are truly ‘best in class’ beyond cruisers (the Breakout is possibly the best cruiser available from any manufacturer).

Anyway, enough of my rambling, here’s the press release from HD:

 

To inspire even more people around the world to experience the exhilaration of riding a motorcycle, Harley-Davidson today shared details of its “More Roads to Harley-Davidson” growth plan through 2022.

“MORE ROADS TO HARLEY-DAVIDSON” INCLUDES NEW PRODUCTS IN ADDITIONAL MOTORCYCLE SEGMENTS, BROADER ACCESS AND COMMITMENT TO STRENGTHEN DEALERS

To inspire even more people around the world to experience the exhilaration of riding a motorcycle, Harley-Davidson today shared details of its “More Roads to Harley-Davidson” growth plan through 2022.

In a fast-changing world with new consumer demands, these accelerated actions support Harley-Davidson’s 2027 objectives with increased focus and strategic investment to reinvigorate the U.S. business while accelerating the pace of international growth.

“The bold actions we are announcing today leverage Harley-Davidson’s vast capabilities and competitive firepower  –  our excellence in product development and manufacturing, the global appeal of the brand and of course, our great dealer network,” said Matt Levatich, president and chief executive officer, Harley-Davidson, Inc. “Alongside our existing loyal riders, we will lead the next revolution of two-wheeled freedom to inspire future riders who have yet to even think about the thrill of riding.”

The result of a comprehensive, top-to-bottom assessment incorporating a “customer first” perspective, the More Roads to Harley-Davidson plan includes:

 

New Products  – keep current riders engaged and inspire new riders by extending heavyweight leadership and unlocking new markets and segments

Broader Access  –  meet customers where they are and how they want to engage with a multi-channel retail experience

Stronger Dealers  –  drive a performance framework to improve dealer financial strength and the Harley-Davidson customer experience

“We expect this plan will result in an engaged, expanded Harley-Davidson community with a more diverse rider base, along with industry-leading margins and cash flow,” said Levatich.

New Products

Leveraging its industry-leading design and strong manufacturing capabilities, Harley-Davidson plans to offer its most comprehensive line-up of motorcycles, competing in many of the largest and fastest growing segments with a full portfolio of motorcycles across a broad spectrum of price points, power sources, displacements, riding styles and global markets.

Extending the company’s leadership in heavyweight motorcycles by continuing to develop improved, more technologically-advanced Touring and Cruiser motorcycles that will keep existing Harley-Davidson riders engaged and riding longer.

Introducing a new modular 500cc to 1250cc middleweight platform of motorcycles that spans three distinct product spaces and four displacements, starting with the company’s first Adventure Touring motorcycle, the Harley-Davidson Pan America 1250, a 1250cc Custom model and a 975cc Streetfighter model, all of which are planned to launch beginning in 2020. Additional models to broaden coverage in these product spaces will follow through 2022.

 

Harley-Davidson Pan America 1250

Harley-Davidson’s first Adventure Touring motorcycle, the Harley-Davidson™ Pan America™ 1250 is planned to launch in 2020.

Harley-Davidson’s first Adventure Touring motorcycle, the Harley-Davidson Pan America 1250 is planned to launch in 2020

 

Future Streetfighter Model

This 975cc Streetfighter model is part of Harley-Davidson’s new modular 500cc to 1250cc middleweight platform of motorcycles, which is planned to launch in 2020. (Prototype model shown. Production model features may vary. Not yet available for sale. All future models shown may not be available in all markets.)

Future Custom Model

Harley-Davidson’s all-new custom motorcycle with a muscular stance, aggressive, stripped down styling and 1250cc of pure performance, is planned to be released in 2021. (Prototype model shown. Production model features may vary. Not yet available for sale. All future models shown may not be available in all markets.)

 

Developing a more accessible, small-displacement (250cc to 500cc) motorcycle for Asia emerging markets through a planned strategic alliance with a manufacturer in Asia.  This new product and broader distribution is intended to fuel Harley-Davidson’s customer access and growth in India, one of the largest, fastest growing markets in the world, and other Asia markets.

Leading the electric motorcycle market by launching Harley-Davidson’s first electric motorcycle, LiveWire, in 2019 — the first in a broad, no-clutch “twist and go” portfolio of electric two-wheelers designed to establish the company as the leader in the electrification of the sport. LiveWire will be followed by additional models through 2022 to broaden the portfolio with lighter, smaller and even more accessible product options to inspire new riders with new ways to ride.

 

Harley-Davidson LiveWire

Harley-Davidson’s electric motorcycle, LiveWire™ — the first in a broad, no-clutch “twist and go” portfolio of electric two-wheelers designed to establish the company as the leader in the electrification of the sport – is planned to launch in 2019. (Prototype model shown. Production model features may vary. Not yet available for sale. All future models shown may not be available in all markets.)

 

Future Electric Harley-Davidson model

A broader range of electric models that are light, nimble and ready to tackle the urban landscape. For those who want to experience the thrill of two wheels, they are planned to be available by 2022.

 

Broader Access

Harley-Davidson will advance its market delivery approach and meet today’s customer needs by:

Creating high-engagement customer experiences across all retail channels  –  including improving and expanding the company’s global digital capabilities by evolving the Harley-Davidson.com experience to integrate with and enhance the dealership retail experience for existing and new customers.

Establishing strategic alliances with global leading e-commerce providers to extend access to Harley-Davidson to a pool of millions of potential new customers.

New retail formats — including smaller, urban storefronts globally to expose the brand to urban populations and drive sales of the expanded Harley-Davidson product portfolio and expand international apparel distribution.

 

Stronger Dealers

Harley-Davidson’s world-class dealer network is an integral part of the company’s accelerated strategy and critical to overall success. The company will implement a performance framework to significantly enhance the strength of the dealer network and the customer experience, enabling the best-performing and most entrepreneurial dealers to drive innovation and success for themselves and Harley-Davidson — while providing the premium customer experience the brand is known for across an increasingly diverse product and customer base.

“Harley-Davidson is iconic because we’ve never been static,” said Levatich. “In moving forward, we are tapping into the spirit that drove our founders back in 1903 and every one of the employees and dealers who rose to the challenges faced along the way.  Our plan will redefine existing boundaries of our brand  –  reaching more customers in a way that reinforces all we stand for as a brand and as a company and we can’t wait to kick it into gear.”

 

Funding & Financials

In addition to building riders, the company expects More Roads to Harley-Davidson to create more value, stabilize and strengthen the existing business, improve Harley-Davidson Motor Company Return on Invested Capital (ROIC), increase revenue and earnings, and allow the company to return more cash to shareholders.

The accelerated strategy will require significant investment to change the trajectory of the business globally, and the company plans to fund it entirely through comprehensive cost reduction and reallocation of previously planned investment and resources including operating investment through 2022 of $450 to $550 million and capital investment through 2022 of $225 to $275 million.  In total, the company plans More Roads to Harley-Davidson to generate more than $1 billion of incremental annual revenue in 2022 as compared to 2017.

The company believes its accelerated strategy is in line with and reinforces its objectives to drive revenue growth and expand operating margins.  The company expects to fund strategic opportunities while maintaining its current investment and return profile and capital allocation strategy.

Harley-Davidson’s funding principles will focus on stabilizing and strengthening the existing business, enhancing the premium brand, and investments in profitable, growth-oriented projects. We expect these principles, along with a disciplined capital allocation focus, will allow Harley-Davidson to execute with improved cost competitiveness and overhead efficiencies.

1 Comment

Leave a Reply

Your email address will not be published.


*