Analyzing Harley-Davidsons Continued Losses And What They Need To Do To Catch-up
Harley-Davidson is an American Staple and for many, it represents what motorcycling is across the United States. Despite Harley's massive success in the last hundred years, they have finally reached a downward spiral. In the last few years, Harley-Davidson has seen negative or especially low sales growth and continue to have revenue losses or small nominal gains. If the company doesn’t decide to change its direction, these losses will only continue to grow as Harley-Davidson loses more popularity to other motorcycle brands.
As the line chart above illustrates, Harley has seen negative to little sales growth in the last five years. With sales losses of -3.74% between 2014 and 2015 and another decent loss between 2016 and 2017 of about -5.82%. Although there was a 1.23% sales growth between 2017 and 2018, they are still significantly behind where they were only five years ago.
Harley is not the only motorcycle producer suffering, the American motorcycle market has been shrinking since its sales peak in 2006 as riders get older and fade out fewer young people are riding motorcycles, especially the large cruisers Harley prides themselves on.
It’s important for Harley-Davidson to try and appeal to these new market demands and produce more motorcycles that are more suited for what younger riders are looking for compared to their traditional customer base.
To see what kind of Motorcycles Harley is currently producing, a visit to the local Mount Pleasant dealership was in order. As visible in the photos above, the vast majority of the motorcycles they are producing are just too large and heavy to be used for urban maneuvering. Another common theme that can be analyzed is how similar many of Harley-Davidsons motorcycles look.
It might be beneficial for Harley and their dealerships to show off more of the customization that can be done to many of their motorcycles. Also for the future models of production Harley should put more effort into making some of their models stand out, not just from their lineup but to the motorcycling scene as a whole.
On the three smaller models that might appeal to female or younger riders, the quality is evident for the higher prices these are still premium motorcycles. In order to succeed, though, they may have to produce even cheaper models in addition to the three they have in order to be successful.
What these younger people are looking for is ease of transportation in urban cities and smaller more affordable motorcycles are the way to achieve this, yet Harley only offers less than a handful of motorcycles that meet this description. As RevZilla a popular motorcycle-related retailer found when analyzing their continued revenue and profit losses. Although they offer some motorcycles that are smaller then their large cruisers they are not nearly as affordable as other brands and are still very limited in selection.
Another growing part of the sales market that Harley has done well with but needs to continue to pursue is its sales to the ever-growing female motorcyclist market. As USA Today found out in 2018 female motorcyclists’ makeup 19% of riders in the United States and are on track to be making up nearly a quarter of the market as time goes on. In order to continue to appeal to female riders, Harley must produce bikes that fit well for female riders. Often the large cruisers that Harley is famous for making are too big and heavy for the average female rider to handle comfortably. An increased product lineup of smaller more nimble motorcycles would not only appeal to female riders but the younger generation as well.
Harley-Davison has just recently begun trying to expand its lineup and attract new customers by releasing three brand new models in three separate classes. The three new models are a sport motorcycle dubbed “Streetfighter”, an adventure bike called the “Pan-America”, and an all-electric motorcycle called the “LiveWire”. These three new models are featured in the graphic below.
The Streetfighter is an interesting move on Harley's part because they have not produced any true sports models in over a decade. While this is a beautiful looking bike that has the features to back it up there is not much known about it. Another thing is that while this motorcycle is a different addition to Harley-Davidson's fleet it doesn't meet the requirements for what people want. Although it is small and agile, it's not convenient for travel with its aggressive stance and no room for any cargo or passenger.
Another interesting way Harley has tried to move in on a new market is with the production of their all-new electric motorcycle dubbed the “Livewire”. While this is a significant step in creating new future-oriented motorcycles compared to there classical cruisers it has some major setbacks. The biggest being its very high price of $30,000 is far too much money to pay relative to what the motorcycle can actually do on its limited range of only 80 miles per charge. Once again, while it is a cool concept, the LiveWire fails to work for the younger crowds due to its lack of convenience, storage space, and range.
Finally, the Pan-America is a very cool motorcycle that will appeal to a certain demographic in the touring and offroad communities. The problem is that it does not fit the young urban demographic Harley-Davidson should be trying to appeal too. The Pan-America will run into the same problem that Harleys cruisers do its too big and heavy to maneuver in the city and it's too large for it to be easily operated by female motorcyclists.
While these three new motorcycles and their classes do add more value to Harley-Davidson as a whole, they will need to continue to develop more small motorcycles to bounce back from their continued revenue losses. These new motorcycles are an advancement for the company and prove that Harley is willing to produce newer different motorcycles to survive.
