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Harley Must Change – But How?
 By
Dave Preston
Harley-Davidson: a business and cultural icon. In some ways the
rise of Harley is more amazing than even Amazon or Microsoft. Amazon and
Microsoft were inventing new ways to do things and new markets with
new technology. Success in these areas is rare, but can be
spectacular. The management of Harley took over a moribund firm that
was on its knees and ready for the hook, to put it optimistically,
and turned it all around and created a tremendous hit “show” that
has been running as a sell-out for two decades.
Of course, there are those who bemoan the “new Harley riders” and
mutter about how things were - back in the old days. Against this is
the obvious - if Harley had continued on the path they had been
driven down by the early 1980s – there would be no Harley at all
today. They came a few hours, or minutes (depending on which version
of the story you read), from going under for good.
Harley now makes a wonderful range of products. The current bikes
are expensive, to be sure, but they offer real “steak” along with
the sizzle – bikes of amazing beauty, with handling, technology,
brakes, power, and reliability – in the segments of the market where
they choose to compete.
Is Erik Buell the future of Harley-Davidson?
While his name doesn’t end with Harley or Davidson, it
could well be that Erik Buell is the future of
Harley-Davidson.
Willie G. Davidson was recently quoted by Craig Vetter
as saying “I’m the keeper of the design.” If you A-B
images back and forth of Harleys from the late forties
to now you’ll notice not much has changed in almost 70
years in terms of the style design of the motor
company's marquee Softail model. Hence the name
Heritage Softail.
But keeping up with the next generation and EPA
requirements will require a change at some point and as
Mr. Preston has pointed out here, that time is probably
coming sooner than later.
What Harley has neglected over the last 25 years, Erik
Buell has been on top of. He has been racing and
developing motors that are far more environmentally
friendly than what the old guard at Harley has put out
on their side of the market. For the most part, the only
racing H-D has done of late is the usual flat track pro
circuit that continues on the basis of the three-decade-old XR750 motor, and some drag racing which provides
little feedback to the designers of their consumer line.
Buell left H-D briefly in the early 80s to start his
own company, The Buell Motor Company, but was eventually
financed by H-D for 49% and in 2003 the other 51% was
purchased by H-D. Buell has been a go-to man in recent
motor development on the H-D side and it’s likely his
motor and body designs will transcend those currently
offered by H-D as we move through the next century.
If H-D were to bring dirt bikes to the market, or
snowmobiles and scooters for that matter (which they
attempted in the 60s) would they be released under the
H-D brand or perhaps under the Buell moniker?
After all, they already penetrate the sportbike, and
adventure market through the Buell brand.
The table is basically set and as the economy shifts and
Willie G. prepares for retirement our money is on Erik Buell to be the next keeper of the next design.
Can you get used to Harley-Davidson-Buell?
TM
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So with all of their success, what could possibly go wrong?
Plenty, as it turns out. First of all, and most dire, the median age
for the buyer of a new Harley is getting perilously close to 60. I
can tell you from direct and intensely personal introspection that
there is NOTHING WRONG WITH 60, but if you intend to sell a few
hundred thousand motorcycles a year that will last at least ten
years – you can see where this is going. Eventually, and in this
case “eventually” is all too soon, the Harley faithful will either
stop purchasing new bikes, or simply die of natural causes. Like me,
you surely intend to live and thrive to at least 120, but how many
new motorcycles do you intend to purchase as an octogenarian?
Harley’s current product line has little that appeals to a teenaged
new rider. There is no dirt bike program for kids to grow up on and
“into” a street bike of the same brand. Then there is the cost
factor – not too many people under 25 can afford to write a check
for $15 – 30,000 – or convince a lender to do it for them.
Porsche has had a similar problem for decades in the car world and
their solution – off and on – has been to adopt a stance that “the
starter Porsche is… a used one.” That will probably not work for
Harley, as new and younger riders want all the bells and whistles
that technology can offer, and Harleys with that level of
technology are still too expensive – new or used.
So with the core market aging, and no “young” market to speak of,
what is The Motor Company to do? As Pogo said in my youth, “Facts is
facts” and “We have met the enemy and he is us.” Harley simply has
to come up with a product mix that appeals to younger buyers, and it
is already too late to start thinking about it.
Fortunately, one of the strengths of Harley-Davidson as a company
has been its ability to think ahead (which is not the same at all as
designing ahead). That is why the V-Rod was introduced a few years
ago. An absolutely wonderful engine, offered first in a “familiar”
cruiser setting, and then in an increasingly wide array of models,
the V-Rod was the first Harley engine in decades that is not an
air-cooled V-twin. There are surely more V-Rod options in the works
for the near future.
In fact, I am surprised there have not been more V-Rod variants
sooner – possibly bitterness because I predicted it in this
publication a few years ago? Although the V-Rod addresses the need
for a more modern engine design, it does nothing for the need for a
less expensive line that is still Harley. That is problem #2 – the
bikes are arguably worth the asking price, but the price is too high
for developing new markets.
Bear in mind the size of the challenge. The Japanese manufacturers,
in the areas of designing and producing lower-priced bikes for a
younger clientele, are decades ahead and VERY good at what they do.
The Chinese are coming, and for all practical purposes are already
here, and their products show better design and construction – every
month. They also enjoy a healthy advantage in lower labor costs.
It gets even more challenging. The Harley-Davidson image is
intrinsically linked to the large displacement air-cooled vertical
twin. Such engines will be going away forever very soon, as they
cannot compete with newer technologies in power or economy and,
(worst of all) they are inherently noisy. Any new engine will be
viewed as an act of “treason” by the faithful – as the V-Rod was
when first introduced. The way forward has to include fuel injection
and water-cooling – and new engine platforms are horrendously
expensive.
Recent information indicates that Harley is reaching out in several
directions – but it’s hard to fathom what it all might mean.
Consider these factoids as a group:
1. The announcement last year of a marketing deal with China to
allow for ramping up of exports to that country. Nothing in there
about manufacturing in China – but if you can make one deal, is that
a stepping-stone to another?
2. The strike. Labor difficulties earlier this year did not help.
3. A press release announcing a partnership with Lehman to produce
trikes that will be offered as Harleys through dealers – the first
“factory” trikes since the Servi-Cars went out of production a half
a century ago. A sop to the aging buyers?
4. An announcement that Harley will re-enter the dirt bike market –
starting from the proverbial clean sheet of paper – with a target of
sales by 2009. This is breathtaking in its implications – and the
magnitude of the challenge. Not that they are all alone, as BMW now
offers some dirt bikes with real capability in a variety of
situations, but Harley? Wow.
4. The news that Harley has filed for two-dozen patents on a three
wheeled trike device with two widely spaced tires in the FRONT that
lean quite a bit. A “reverse-trike” with an articulated front end –
now we are really getting far outside the Harley “box.”
5. Rumors on the Internet that Harley and Ducati would merge – which
the CEO of Ducati said, reportedly, would be fine with him any day!
6. Recent rumors that Honda will BUY Harley-Davidson!
True, Internet rumors are hardly credible, but these data points in
a relatively short time blended together make you wonder what is
going on. Is there is a group at Harley headquarters involved in a
brainstorming session, but instead of going over a lot of ideas and
culling them down to a few that make sense, they’re intent is to go
ahead with ALL the ideas? Trikes in two different configurations,
dirt bikes, and potential mergers, buy-outs, AND foreign manufacture
– how will it all end?
I surely don’t know, but I have learned not to be surprised, and to
expect Harley to do what will prove to be the smart thing – no
matter what the situation looks like at the moment!
I look forward to the new products from Harley, no matter which of
these avenues they follow (or all of them?) and I’ll tell you this –
betting against their success would not be wise.
Dave Preston is the author of
Motorcycle 101, a sensible book
for the new and returning rider. |
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