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The image of a Harley Davidson rider is an iconic one. Epitomizing rugged independence, Harley Davidson riders embrace the image. But the motorcycle company has struggled over the last decade. Thus, amid changes in the economic landscape and generational preferences, Harley Davidson is on a quest to stay relevant. And so the company’s latest motorcycle–known as the Harley Davidson Livewire–will soon be unveiled. The Harley Davidson Livewire is a high-powered, fully electric motorcycle that hopes to bring new customers in the coming years. But is this e-moto breakthrough going to attract a new generation of Harley riders? Or is the company doomed for obsolescence? Based on new market strategies, Harley Davidson believes the former to be much more likely.

Introducing the Harley Davidson Livewire — A Response to Generational Pressures

It’s no secret that the typical Harley Davidson rider is a 50-something-year-old with cash to burn on a rather pricey hobby. In retrospect, despite pressures to change decades ago, Harley Davidson chose to continue to invest in this demographic. In other words, it left the lighter weight motorcycles for Japanese companies to develop. And without a doubt, those companies took advantage of the opportunity. However, quickly, the number of classic Harley Davidson riders gradually declined as Baby Boomers got older. Consequently, finding a new demographic to replace them has proven to be a challenge for the company.

For millennials—who will soon make up the largest income-producing generation—the typical “Hog” has less appeal. Handcuffed with student loan debt and limited incomes, they seem to be more interested in affordable, lightweight motorcycles for transportation, if at all. For this reason, scooters and e-bikes often get millennials attention more than big bikes or motorcycles in general. And if they are interested in motorcycles, the latter often tend to be those that are easier to maneuver. This detail does not describe the typical Harley Davidson rider or machine.

a photo quote of Robin M. Farley relevant to the topic of the future of the Harley Davidson Rider & The Company's Quest to Stay Relevant in a Changing Market
UBS Analyst Robin M. Farley makes a valid point relevant to the future of Harley Davidson Inc.

Given these generational pressures, Harley Davidson has announced the release of its new electric motorcycle. The Harley Davidson Livewire is to be released in September and is already available for pre-order for just under $30,000. Regarding its specs, the Harley Davidson Livewire has a range of 110 miles and achieves 0–60 mph in only 3.5 seconds. And being completely electric, it can be recharged easily at home or at e-vehicle charging stations. The question is whether millennials will find the Harley Davidson Livewire attractive at such a hefty price tag or not.

Between a Rock and a Hard Place — Dealing with Tariffs

While the Harley Davidson Livewire seeks to solve generational problems, the company is dealing with other issues as well. Increased U.S. tariff policies have veritably resulted in higher steel prices, which naturally reduce profit margins. At the same time, tariffs have also affected overseas costs, causing the company to move some manufacturing abroad. In reaction to these changes, many a Harley Davidson rider have threatened to boycott the company in the future. The effects of this scenario have been lower sales than expected and a falling share price.

a photo quote of President Donald Trump relevant to the topic of the future of the Harley Davidson Rider & The Compnay's Quest to Stay Relevant in a Changing Market
President Trump weighs in on the situation.

While tariffs have posed major issues, sales for Harley Davidson in the U.S. and Europe had already been declining. Other motorcycle offerings have cut into Harley Davidson’s once impressive control of the market. While the Harley Davidson Livewire gives the company a lead advantage in the e-moto sector, this case will not last. In 2020, startup Zero will introduce its SR/F e-moto model, which has better specs and is less than $19,000. Likewise, startup Fuell will also soon debut its e-moto model Flow under $11,000.

In Hopes of a New Market for Harley Davidson

With these details, the company isn’t relying on its Harley Davidson Livewire to save the day alone. Instead, Harley Davidson has recently announced they would be introducing a small-displacement, 338cc-motorcycle for Chinese and Asian markets. The company’s new adventure into these smaller motorcycles recognizes that these represent popular modes of transportation in Asia.

Thus, if the company could enlist a sizable portion of the Asian market as part of the new Harley Davidson rider generation, profits would increase. And in time, this newly captured market might even move up to a larger and more traditional Harley Davidson motorcycle.

a photo quote of Matthew S. Levatich Trump relevant to the topic of the future of the Harley Davidson Rider & The Compnay's Quest to Stay Relevant in a Changing Market
If Harley Davidson could enlist a sizable portion of the Asian market as Harley Davidson riders, profits would increase!

An Unknown Future for Harley Davidson with Many Questions

While the Harley Davidson Livewire makes logical sense, the e-moto segment of the market is a gamble. Certainly, the e-moto sector is likely to be considerably smaller in volume. That is why Harley Davidson is also pursuing e-scooters and e-bikes as well. However, these sectors are already quite competitive, and whether the company can make an impact here or not is questionable. Envisioning the new Harley Davidson rider as someone on an e-scooter is surely difficult to imagine.

Regardless, the company is clearly acknowledging the fact that the motorcycle industry is rapidly changing. Thus, in an effort to remain relevant, Harley Davidson is diversifying its approach to the future. And much of these diversified efforts involve new models and new technologies. If anything, the company is showing the capacity to be quite dynamic despite the attraction of maintaining its century-old image. Given this factor, the company may indeed survive these changes. However, it goes without saying that the Harley Davidson rider of tomorrow may look much different.

2 COMMENTS

  1. Harley produced (or at least had their name on smaller CC bikes) in the 60’s and 70’s. So it would not be unheard of. They should checkout the range of bikes BMW have. Very similar price ranges. Harley can still be profitable, but need to expand their range of bikes. Electric ones will not do it! Bikes are dangerous to ride at the best of times…but a silent electric bike is asking for trouble!

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