Author Topic: New Harley Models  (Read 103 times)

Offline qcbaker

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New Harley Models
« on: July 31, 2018, 02:38:06 PM »
https://www.revzilla.com/common-tread/harley-davidson-announces-a-slew-of-new-models-and-theyre-not-even-close-to-what-you-expect

I'm probably the furthest thing you can be from a Harley fan, but to say the least, its interesting to see H-D finally putting their own name on some bikes that aren't cruisers/baggers.

Assorted thoughts:

- Seems to me Harley is trying to steal some customers from BMW/Ducati/KTM with that new ADV bike, and the new "streetfighter" thing looks like they just made their own version of a Diavel. And if that's the case, I would imagine the pricing on these new models is going to be standard Harley fare: too expensive.

- I think the diversification of H-D's lineup may be too little too late. I'd be shocked if this (even if I believe its the right move) really saves them in the long run, ESPECIALLY if the bikes are priced like the rest of Harley's lineup.

- I'll be extremely frustrated if the streetfighter takes off just because of how H-D handled Buell. IMO, they don't deserve to succeed in the sport/sport-naked segment. You shouldn't get to be actively hostile to those customers for years and then expect to get those same customers back. I know that's a bit petty, but like I said, I'm not exactly a fan of Harley lol.

Offline cbrfxr67

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Re: New Harley Models
« Reply #1 on: July 31, 2018, 03:13:09 PM »
Saw this yesterday too.  I think it's great to see more bikes anywhere but they're late and I think the pricing will be ridiculously high.  I'd consider one if I could afford it.  I'm really interesting in seeing the 'fully faired' version.
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Offline mr72

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Re: New Harley Models
« Reply #2 on: July 31, 2018, 04:42:48 PM »
Too little, too late, which is an understatement. It's actually: the wrong products, and too little, and too late.

This is like the Windows phone, or what was MS's MP3 player? Yeah, that.

It's like when McDonalds copied Chick-Fil-A's sandwich.

Or Sears trying to rebrand itself as it did. Or an Amazon retail store. Or if Jack Daniel's tried to market a craft beer.

Harley-Davidson doesn't understand the market, and so they are responding with a Me-Too strategy.

I can imagine some other strategies that would work for the company but they wouldn't ever embrace them. At the core they have to start the other way around: assume that their target customers simply do not want the product they have traditionally made at all, and don't value the brand name. They need to re-target, define some products that will sell, and assume they will have to overcome a bias against the brand to sell anything in their existing space. They may be the incumbent, top choice among American buyers in the heavyweight cruiser category, but that category is dwindling and the buyers of that category are aging.

Imagine this: let's say H-D made a 350 lb 300-cc parallel twin bike sport/standard like a Ninja 300 or a CBR300. Forget classic Harley styling, forget the pipes or the V-twin or anything. Just plain old aping of Kawasaki and Honda. So, why would anyone buy it instead of a Kawasaki or Honda? You'd have to make it cheaper. And you'd have to convince the buyer, someone who's never going to wear a leather vest for any reason, to take a risk on a brand that's literally a newcomer to this market space. Harley doesn't know how to do that, not at all. And to do this is basically to start completely over from scratch. Their shareholders would never go for it, even if the execs thought it was the right thing to do.

To maintain viable, Harley Davidson is going to have to accept the reality that their current product as a category does not have long-term market viability, which means they need to find a way to sneak into another vertical, preferably one where there is a niche with unmet demand. Think GE's move into healthcare, or Kodak when film went away.

The fact that Harley Davidson is going bankrupt while they still account for >25% of all new motorcycle sales in the USA is a testament to how poorly run their business must be. Even though their buyers are aging, they are still buying. How is it that Honda, Kawasaki, Suzuki, Yamaha, BMW, KTM, Triumph, Ducati, Polaris, etc. are all able to stay afloat on that 75% market share split between them? Well, they have a diversified product lineup that has global market appeal, so they aren't reliant on American baby boomers for their business. They adjusted their product lineups constantly to meet the changing demand. That's how even the least competent companies are run. H-D didn't do that.

What H-D might need to do to survive is to become a boutique manufacturer of intentionally retro motorcycles for far fewer buyers sort of like Ural. But to make that happen will require embracing a huge reduction in revenue to happen over the next decade or so and the downsizing, rehiring, replanning that is required to support what will be an entirely different business model. Shareholders would never stand for that either.

So they're going to die, that's all there is to it.

Offline qcbaker

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Re: New Harley Models
« Reply #3 on: July 31, 2018, 05:10:00 PM »
This is like the Windows phone, or what was MS's MP3 player? Yeah, that.

Ahh, yes. The Zune. The Harley ADV bike is the Zune of motorcycles. A perfect comparison lol.

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I can imagine some other strategies that would work for the company but they wouldn't ever embrace them. At the core they have to start the other way around: assume that their target customers simply do not want the product they have traditionally made at all, and don't value the brand name.

As a 25 year old male motorcycle enthusiast (who I'm assuming they're targeting with the Streetfighter and the eBikes) I'd say that's a pretty accurate assessment.

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They need to re-target, define some products that will sell, and assume they will have to overcome a bias against the brand to sell anything in their existing space. They may be the incumbent, top choice among American buyers in the heavyweight cruiser category, but that category is dwindling and the buyers of that category are aging.

Imagine this: let's say H-D made a 350 lb 300-cc parallel twin bike sport/standard like a Ninja 300 or a CBR300. Forget classic Harley styling, forget the pipes or the V-twin or anything. Just plain old aping of Kawasaki and Honda. So, why would anyone buy it instead of a Kawasaki or Honda? You'd have to make it cheaper. And you'd have to convince the buyer, someone who's never going to wear a leather vest for any reason, to take a risk on a brand that's literally a newcomer to this market space. Harley doesn't know how to do that, not at all. And to do this is basically to start completely over from scratch. Their shareholders would never go for it, even if the execs thought it was the right thing to do.

I could never see Harley putting out anything with full fairings... I could almost see Harley making a 250 or 300cc standard/tracker type of bike though. Think TU250X or similar. Those types of bikes could easily be marketed with the "heritage" Harley loves because of their history with flat-track racing and/or the Evel Knievel stunts done on XR-750s. The only problem is a Suzuki TU250X is $4600 new. The cheapest bike Harley sells now is like $6000.

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The fact that Harley Davidson is going bankrupt while they still account for >25% of all new motorcycle sales in the USA is a testament to how poorly run their business must be. Even though their buyers are aging, they are still buying. How is it that Honda, Kawasaki, Suzuki, Yamaha, BMW, KTM, Triumph, Ducati, Polaris, etc. are all able to stay afloat on that 75% market share split between them? Well, they have a diversified product lineup that has global market appeal, so they aren't reliant on American baby boomers for their business. They adjusted their product lineups constantly to meet the changing demand. That's how even the least competent companies are run. H-D didn't do that.

What H-D might need to do to survive is to become a boutique manufacturer of intentionally retro motorcycles for far fewer buyers sort of like Ural. But to make that happen will require embracing a huge reduction in revenue to happen over the next decade or so and the downsizing, rehiring, replanning that is required to support what will be an entirely different business model. Shareholders would never stand for that either.

Yeah, I don't really see any way that H-D doesn't have to dramatically downsize to stay in business.

Quote
So they're going to die, that's all there is to it.

If they die... they die.


Offline mr72

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Re: New Harley Models
« Reply #4 on: July 31, 2018, 05:47:00 PM »
The Harley ADV bike is the Zune of motorcycles. A perfect comparison lol.

That's it! See how relevant that was? :)


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their target customers simply do not want the product they have traditionally made at all, and don't value the brand name.
As a 25 year old male motorcycle enthusiast (who I'm assuming they're targeting with the Streetfighter and the eBikes) I'd say that's a pretty accurate assessment.

Yeah, that's really the problem: they don't understand this buyer at all, the have never bothered to even look. So what they are doing instead is saying, "hey, KTM and Suzuki and Ducati understand these buyers, so let's just make a version of what they make, an of course since those buyers are Americans, they will buy ours instead of the Euro or Japanese stuff, because 'murica."

This strategy might work if they went the way they won't go, which is, make a better product that's cheaper... "let's just make a version of what they make, but those buyers will buy ours instead because it's better quality, which they don't know yet, but it's also way less expensive, so they can discover how much better it is".

"Sure I'll buy that Miata instead of a MG or Alfa or Fiat ... it can't be any worse and it's a lot cheaper" said 50K people in 1990.
"What's this Lexus thing? Looks like a Mercedes, only cheaper..." said a bunch more people in 1990.
"I thought Honda only made motorcycles. Well it can't be any worse than a Chevette and it's a lot cheaper" said a bunch of folks in 1978.
"What in the world is a Buddy scooter anyway? Looks just like an old Vespa to me, but it's new and costs half what an old Vespa costs... worth a try?" lots of folks are saying nowadays.

So it's going to have to be, "hey wait, I didn't know Harley made a 300cc retro standard. Spec sheet says it has 40 hp, a 6-speed and will go 100mph, still gets 65mpg ... wow that's a lot better than the TU250X or the new Rebel. And it's $4300 out the door."

But they'd never do that.

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Yeah, I don't really see any way that H-D doesn't have to dramatically downsize to stay in business.

The problem with a publicly traded company is in valuation and shareholders. You can't just make what would be good business choices to salvage the brand. You get forced into bad business choices that will prop up the value in the shorter term. So if the real solution is that their revenue is going to be reduced by 70%, so you can reduce staff and assets and all that by 70%+, and still stay afloat, well the problem is the stock value will also drop 70% when you do that. So the board will never allow it.

They are more likely to try a strategy that will potentially keep revenue close to flat, even if it involves lots of debt. Introducing new models that are way down-market, while maybe a good long term strategy, looks like the wrong kind of debt for investors who want to get out of HOG in the next couple of years. Right now if H-D has 25% of the US new motorcycle market (!) at an ASP of say $10K the imagine what happens if they replace their product lineup with ones that average $6K. That's a 40% reduction in revenue assuming they can keep that same 25% market share. That's also a 40% drop in stock price. Announce such a strategy and every mutual fund and state retirement plan and everyone else who has any HOG in their portfolio will get out ASAP in hopes to beat the big drop, which will drive stock prices way, way down and result in the death of H-D before they can even execute this strategy. At least the fool's gold with the new product lineup is shiny.

Offline qcbaker

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Re: New Harley Models
« Reply #5 on: July 31, 2018, 06:47:12 PM »
Yeah, that's really the problem: they don't understand this buyer at all, the have never bothered to even look.

Not only have they not even bothered to look, when they were told, they actively rejected the idea. I know I've talked about it before, but what's most annoying about it is the fact that they already had a brand that was attractive to that kind of buyer: Buell. And when those buyers went into H-D dealerships and said they liked the Buells, H-D told them "No you don't" and tried to sell them some Road King Screamin' Eagle Easy Rider Patriot Edition because that's what REAL bikers want. They thought they knew better than their customers, and now that they're running out of money, they want to put out what is essentially an XB12 Lighting and try to get those people back into their dealerships? Screw that and screw them. Its so insulting.

But at the end of the day, I do recognize that that's just my personal take. There are probably a bunch of riders my age who will look at that Streetfigher and love it. After all, the sport-naked segment is super hot right now.

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So what they are doing instead is saying, "hey, KTM and Suzuki and Ducati understand these buyers, so let's just make a version of what they make, an of course since those buyers are Americans, they will buy ours instead of the Euro or Japanese stuff, because 'murica."

That is probably exactly what they think, honestly.

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This strategy might work if they went the way they won't go, which is, make a better product that's cheaper... "let's just make a version of what they make, but those buyers will buy ours instead because it's better quality, which they don't know yet, but it's also way less expensive, so they can discover how much better it is".
...
So it's going to have to be, "hey wait, I didn't know Harley made a 300cc retro standard. Spec sheet says it has 40 hp, a 6-speed and will go 100mph, still gets 65mpg ... wow that's a lot better than the TU250X or the new Rebel. And it's $4300 out the door."

But they'd never do that.

H-D seems to be heavily invested in the illusion that they produce a premium product that deserves a premium price. I'd be shocked if any of their new bikes are less than $15K.

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At least the fool's gold with the new product lineup is shiny.

Ha. True that.

Offline Watcher

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Re: New Harley Models
« Reply #6 on: July 31, 2018, 07:03:01 PM »
If I was writing the article:

"10years later, Harley Davidson realises Erik Buell was on to something!
But is it too little too late?  Probably."

'Nuff said.



I do like the look of the Streetfighter, but before I even consider spending what is probably going to be too much money on it I'll just pick up another used Lightning.
Parts are still available from many people who are either parting out or flat out one off manufacturing new stuff for them, and I'd rather support local small business and have a quirky bike than something new that looks like an American attempt at an FZ8 with a superiority complex.
No, I'm not butthurt on behalf of Erik, why do you ask?
« Last Edit: July 31, 2018, 07:04:08 PM by Watcher »
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Offline mr72

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Re: New Harley Models
« Reply #7 on: July 31, 2018, 07:11:30 PM »
Buell wasn't the right answer, but it could have been. However, the problem was having them for sale at the same dealer as H-D.

They SHOULD have just kept the H-D name on the Buell bikes and then to stimulate sales offer a spif or other incentive to salesmen to promote the new models. One major problem is that the Buell bikes were not priced as high as H-D so there's more commission available for the Harley sales.

Sales guys are coin operated.

Think of this like if, say, Audi were to acquire, um, Kia. Now, the Kia Stinger may be a killer RWD sports sedan but the dealers are still going to promote the S5s that are 2x the price. And actually this kind of acquisition pattern tends to kill both companies' sales.

Offline cbrfxr67

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Re: New Harley Models
« Reply #8 on: July 31, 2018, 08:37:10 PM »
I've been riding an Electraglide for the past year and it was one of the best bikes I've ever had.  I started off not too fond of it but in the end, felt a pang of emotion  :cry: as it rode off down the street a few weeks back when someone took it off my hands.  With that Harley experience, I'd consider a new streetfighter, but the $ is going to be waaaay out of the park; I'm pretty sure.
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Offline mr72

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Re: New Harley Models
« Reply #9 on: July 31, 2018, 09:01:57 PM »
I've been riding an Electraglide for the past year and it was one of the best bikes I've ever had.  I started off not too fond of it but in the end, felt a pang of emotion

I have heard this from several friends, sort of the same sentiment.

The thing is, that's good at building brand loyalty but it doesn't translate to selling a bike to a first-time motorcycle buyer. "You should buy this right now even though you don't like it, because trust me, you'll grow to really like it over the next year or so." Why not just buy the thing you like right now?