Harley’s Paradox: Embrace the Past While Chasing the Future?

[Hugh Janus]

The Pan America or the Electra Glide Revival: Which represents the path forward for H-D? (Harley-Davidson/)

A well-defined brand identity and a loyal customer base comprise that rare combination that most companies crave but only a few possess, and kudos to the outfit that manages to maintain both for more than a century. The challenge for those firms is to treasure the hard-earned legacy while also adapting to present-day market forces; just ask 118-year-old Harley-Davidson.

The iconic American brand has learned the hard way that lingering in the rosy haze of past triumphs isn’t enough, especially in an increasingly tech-savvy, millennial-centric new world order. Keeping both camps happy while also paying the bills means walking a fine line between heritage and innovation, and it’s a dilemma Harley is having to confront more regularly these days. Just look at its two latest projects—the innovative, adventure-ready Pan America (PA) versus the nostalgia-heavy, throwback Electra Glide Revival. They’re about as opposite in design, styling, and use case as you can imagine, and if you think Harley is looking to thread the needle between celebrating a freewheeling, prosperous past and embracing a new, technologically divergent future, we’d have to agree.

Harley’s Hardwire strategy outlined the company’s priorities going forward. Its core business—large cruisers—will continue to take center stage. (Harley-Davidson/)

The two diverging paths can be traced back to the firm’s Hardwire mission statement released a couple of months ago by current CEO Jochen Zeitz, which essentially proposed that Harley extricate itself from any new non-heritage-related projects (or something to that effect). Because the Pan America was already on the books, it made the cut, while as-yet undeveloped designs (looking at you, Bronx) did not.

As Zeitz put it, “We intend to: One, invest in our strongest motorcycle segments that drive profit; two, selectively expand into and redefine segments where we have a winning offering; three, invest in innovation in the electric market which will be a critical part of our future.” There’s more to Hardwire than that, but those three points are what’s driving the current conundrum.

Within that plan’s stated structure, 70 percent of the manufacturer’s efforts would go into the core business (One), 20 percent into new segments that offer clear potential for more profit—like the Pan America (Two)—and 10 percent on testing ideas for longer-term growth (presumably Three).

Harley’s Electra Glide Revival is a gorgeous nod to the company’s glorious past.Harley-Davidson (Harley-Davidson/)

The latest effort in Harley’s cruiser—er, “core business”—part of the equation came in the form of the new Icons Collection announced earlier this month. The Collection represents a solid thread back to Milwaukee’s rosy past, presumably a celebration of past triumphs and traditional roots—or it does so far, anyway. The series aims to produce one to two very limited motorcycles each year, with the first being the Electra Glide Revival, an unabashed homage to the 1969 FLH Electra Glide.

The sumptuous, chrome-trimmed machine has all the hallmarks of the late-’60s bikes, complete with solo sprung saddle bracketed by a chrome rail, wire-spoke wheels and whitewall tires and topped with Harley’s first batwing fairing, though it understandably is built on the modern touring platform with the Milwaukee-Eight 114, not, of course the original’s 1,208cc Shovelhead engine. It’s elegant and all kinds of cool without being ornate, and I’d bet Harley will have no problem selling every one of the 1,500 units being produced for 2021. Will those buyers be boomers? The Revival’s MSRP of $29,199 means a highly likely yes.

Other ongoing projects that’d likely slot into the 70 percent core business scenario include the upcoming 1,250cc custom model, which may or may not be called Nightster. Zeitz had said earlier, “...touring and large cruiser customers will see differentiated yet true-to-Harley products that motivate them to buy our new models. We are investing in design, technology, and performance enhancements that push the boundaries while maintaining a balance between classic and cutting-edge designs.” That sounds like an apt description of the new liquid-cooled cruiser Harley says will be revealed soon; from what we’ve seen so far, it will have a recognizable cruiser profile and share the same high-performance DOHC 150 hp engine as the Pan America, just likely in a different state of tune, thus straddling the line between old-school and modern.

Harley-Davidson is portraying the upcoming 1,250cc custom model as a bridge between classic and cutting edge. (Harley-Davidson/)

Another new program H-D launched this year acknowledges that some of The Motor Company’s greatest competition comes from its own bikes, in the form of used models. To that end, we saw the roll out of Harley-Davidson Certified, the first certified pre-owned program (CPO) supported by Harley via its dealers. Each bike gets a 110-point inspection, comes with a warranty, and can’t be more than five years old. It’s a classic case of if you can’t beat them, join them—or at least get a slice of the market.

All these moves, like it or not, make business sense for the short term. After years of declining market share, Harley can’t afford to ignore profitable products, and its long-running strength in the cruiser market is indisputable. The Hardwire emphasizes that safer route by trying to leverage the loyalties of its existing ridership. Sources have said that not every bike in the Icons Collection will be a retread of past glories and that at least some future models will “appeal to a different audience,” but you have to admit the Electra Glide Revival’s release on the heels of the Pan America global launch does sort of feel like a paradox, good business sense or not.

The Pan America is a bold new step into uncharted territory for H-D, but the company sees strong potential in the segment. (Harley-Davidson/)

The adventure segment is uncharted territory for H-D, but it’s one the company sees as having potential for profit, based on that Hardwire summation. As Zeitz elaborated: “Adventure-touring is the largest segment in many European markets with both attractive margins and high growth. It’s also a largely untapped segment in North America, and we’re excited by the potential…for Harley-Davidson.”

Milwaukee’s first shot at a dedicated adventure bike, then, had to include bold design ideas and smart engineering to give it a chance in this crowded segment. By all accounts—OK, by ours—the Pan America’s new 1,250cc Revolution Max 150 hp V-twin and the bike’s long-travel semi-active Showa suspension, Brembo brakes, multiple ride modes, and adjustable windscreen make a strong case for the bike’s adventuring bona fides. Maybe more compelling is the PA’s unique electronically adjustable suspension, which can lower the bike by more than an inch when stopped (depending on rear preload), thereby offering shorter pilots a way into a segment that mostly favors the big and tall. That one piece of tech simply makes the bike more accessible to a larger population of riders, expanding the pool of potential buyers dramatically.

Although reports from the launch were almost all positive, everyone knows it’ll be a slog to compete with the hot-selling BMW R 1250 GS in markets the Pan America intends to target. There may be potential for Harley to expand its market share in Europe, where cruisers and tourers aren’t big sellers, and while Zeitz has said “this segment is a natural fit” for Harley, the jury’s still out on that.

This mini-Sportster being developed for China by Qianjiang could be hitting the Asian market soon. (Qianjiang/)

The 10 percent portion of the formula—the longer-term growth ideas—likely will take fruit in the plans to develop small-capacity bikes for new markets. Milwaukee’s commitment to a small V-twin with more traditional Harley styling apparently wasn’t axed under the Hardwire strategy, and as Cycle World reported, China’s Qianjiang has recently released teaser images for a bike called the SRV300, which fulfills both the traditional and new markets by riffing on past H-D models. Chinese type approval documents show a small-capacity 296cc machine, but more importantly, the bike’s styling makes it a dead ringer for the Sportster Iron 883 (except for the inverted fork and liquid-cooled engine). Clearly it makes sense for H-D to pursue new product lines in the world’s biggest motorcycle market without having to commit more resources there, and Qianjiang’s position as one of China’s main motorcycle manufacturers means a new H-D branded bike (or series) is likely soon.

With the LiveWire now spun off as its own brand, maybe we’ll see lower priced electric models. (Harley-Davidson/)

Harley’s LiveWire electric bike, whose powertrain designs almost fly in the face of its long legacy in the combustion world, can also be filed under “ideas for longer-term growth.” Which is why it made sense to hear H-D was spinning off its electric motorcycle business as a separate brand called LiveWire; after all, it had already done that with its ebike arm, positioning Serial 1 Cycle Company as a stand-alone brand, though still aligned with the Milwaukee mothership. As Serial 1 Brand Director Aaron Frank said at the time, “It allows Harley-Davidson to have a role in the ebike space without it being a drag on their business building motorcycles, and it allows us a lot of advantages because we’re able to move a lot more quickly as a smaller, more focused company.” The same thinking could be applied to the new LiveWire brand as well, and thus further streamline the core business.

Is there an intentionally gaping hole in H-D’s US lineup where a smaller-displacement model should be? H-D has relied on other manufacturers to target this low-profit-margin segment in the states. Would a new version of the 350 Sprint make sense for Harley? (Mecum Auctions/)

The jury’s still out on whether this multi-pronged approach is the answer to H-D’s ongoing financial woes. After all, it’s early days yet in the new strategy, and bikes are just now hitting dealer floors. The unspoken variable in any of these H-D initiatives is whether they will expand the brand’s appeal.

The PA will likely attract some riders not previously interested in the brand, but it’s still not the kind of rig you’d recommend to a newbie, whether on road or off. Reception for the bike has been enthusiastic though, with the dealers we spoke to citing a high level of preorders for the bike, which hit showrooms in May. It remains to be seen whether the new 1250 custom model will have the same effect. As for the Icons Collection, that likely will serve as a halo or niche program to burnish brand reputation, much like the CVO division has, while the certified pre-owned gambit certainly can’t hurt as far as core business goes.

One area that Harley seems to regularly neglect is the entry-level segment in the regular line, and there’s also nothing in the electric lineup that comes even close—yet, anyway. The LiveWire model’s lofty price tag is still a major deal-breaker for many, but with a new model supposedly coming next month, that may change; in fact, we’re betting it’ll be a lower-cost electric bike. As an online commenter on our last LiveWire story wrote, “The only way electric motorcycles will sell is when they cost half of what ICE motorcycles do. This is the major incentive for nonmotorcyclists to start participating.”

Paradox or not: What do you think about Harley’s latest moves?

Source

[XTreme]

@Buckster......some gay Tractors for you!

[Pedro]

I love it how everyone is an expert in marketing and business when talking about Harley Davidson, one of the world’s most recognised brands (not only amongst motorcycling brands) and by far the longest running motorcycle manufacturer.

[Buckster]

They tried smaller capacity with the Street 750 and 500 but they didn’t sell well. As far as innovation is concerned, they are innovators, the new 1250 is evidence as it the different series of v-twin motors every few years, all definable. The Livewire is cutting edge in electric motorcycles but for some people Harley will always be out of their reach, wether that be financial or socially, I joke about them being too much bike for some people but they actually are and mainly because of their heritage and image. They just don’t suit people who live in mediocrity, or gingers.

[XTreme]

11 minutes ago, Buckster said:

They just don’t suit people who live in mediocrity, or gingers.

[Slowlycatchymonkey]

I always thought Harleys main issue (aside from the price tag) was that they survived. The classic Harley look is a stand out amongst any icon. They pull off a look that kids dream of owning and everyone has enjoyed at some point. The level of fuss and people falling over themselves to be complimentary about other bikes of the past that have been revived like Bonneville, Bullet, Indian wouldnt be happening if they too had survived. If Harley had disappeared taking its V twin and volcanic chrome with it people would be wetting their pants over it now (moist ) but because it has been ever present its in my view not properly appreciated.