Harley-Davidson must hate ATK’s new bikes

Hell For Leather’s Wes Siler wrote up his experiences on ATK’s rebadged Hyosungs, which cover the 700cc cruiser and 250cc sportbike.  Surprisingly, given his perceived anti-cruiser bias, he really seems to like the new 700cc cruiser.  The article has dropped behind his pay wall now, so you need to be a subscriber to see it.

Two of the points he alluded to in the article bears further discussion.  First, he notes that the ATK badged cruiser, with it’s smaller displacement, has significantly more horsepower, and less weight–at signifigantly lower cost–than Harley’s 883 Sportster. Second he notes that Harley-Davidson isn’t keen on, and is actually rather hostile to, Frank White’s introduction of US-assembled cruisers and sportbikes to the Harley dealerships who are working with him.

I believe it’s quite likely that the latter point is a direct result of the former. ATK’s CEO never tires of telling you that he wants ATK to be sort of a Scion to H-D’s Toyota, i.e., a little brother brand that creates new entry-level customers for the top-shelf product in the fullness of time. The MoCO, however, doesn’t seem to see it that way at all.

From H-D’s point of view, their dealers are selling lower-priced, better-performing cruisers. Which means that, when it’s time to move up to a big-boy bike, customers who are more impressed by actual motorcycles than they are by the badge on the tank are quite likely to look at, say, an M109 or Vulcan rather than a Road King.

Harley Marketing to the Perv Community.

Sadly, this does not seem to be a spur to Harley to produce a more competitive cruiser but rather to circle the wagons to protect the precious, precious “brand”. And, sure, a brand is a valuable thing that needs to be protected. But it seems Harley’s idea of protecting the brand is to a) change the product as little as possible, b) resist innovation, and c) cling to an increasingly geriatric rider market. While you can get some short-term success by doing this, it’s ultimately a strategic failure.

This is a recent Harley-Davidson advertisement. It certainly says a lot, even without saying it. Even if we assume the hirsute fellow shown evokes any reaction among 17 year-old girls other than a strong urge to run shrieking in terror, capitalizing on it is, not to put too fine a point on it, a crime.

It speaks to a certain older gentleman who might wish to have a juvenile female as a companion (no doubt because of her great wisdom and ability to contribute as a equal partner). What is doesn’t speak to is the younger rider who does not see themselves, in their dreams, as an aging fifty-something pedophile.

The product itself–while admittedly attractive and well-built–is also rather dated in style, and most certainly in performance. It is the previous generation’s idea of what a motorcycle should be, with new “Dark Custom” bike sporting–Springer front-ends, a suspension system so useful it was abandoned in the 1950s. <Meanwhile the other US motorcycle company, Victory, is producing bikes that look–and perform–as if they were designed in the 21st century.

Although, in the case of the Vision, that’s actually a bad thing.

Sadly, Harley-Davidson’s current leadership, led be Kieth Wandell, seem unable or unwilling to recognize this. And, to the extent that they do recognize it, their solution so far has been to introduce factory trikes, to keep their doddering ridership on a Harley for a few after their legs are no longer able to hold up an Electra-Glide.

Sure, they are managing to keep their stock price up for the moment–mainly through cost-cutting–but at what overall cost? The fundamentals look troubling. Gross margins are declining, and debt to equity has skyrocketed from 50% to 306%. That’s not the sign of a company in rosy health.

Harley-Davidson has skated along on the strength of it’s brand for twenty years. It’s been a great run. But it’s getting awfully close to the time when the lack of innovation and stodgy corporate culture can’t be saved by the brand alone.

Author: Dale Franks

Dale Franks is the former host of The Business Day, ”a daily, four-hour business and financial news program on KMNY Radio in Los Angeles. From 2002-2004, he was a contributor on military and international affairs for TechCentralStation.com. Currently, he a publisher and editor of the monthly political journal The New Libertarian, as well as an editor of the popular web log, Q and O. Dale served as a military police officer in the United States Air Force from 1984 to 1993, in variety of assignments both in the United States and Europe, where he also was assigned to the staff of the Headquarters of Allied Forces Central Europe. In addition to broadcasting, writing, and speaking on various topics, Dale has also been a long-time technical training instructor on a variety of computer software and technology subjects. Dale has also long been involved with information technology as an accomplished web designer, programmer, and technologist, serving as the corporate knowledge specialist for Microsoft Outlook at SAIC, the nation's largest employee-owned corporation. Additionally, he is the author of a number of software user guides used for classroom training by one of Southern California’'s premier computer training and consulting firms. His book, SLACKERNOMICS: Basic Economics for People Who Find Economics Boring, is available from Barnes & Noble.

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