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Harley-Davidson introduces the 2011 lineup (Updated)
Harley-Davidson unveiled their new model year bikes today, expanding the product line to 32 motorcycles. OK, so its really more like 32 versions of the same 4 motorcycles. Whatever.
Still missing from the Harley lineup for 2011: a beginner bike of any kind, and more specifically, one that can be used in the company’s proprietary Rider’s Edge program for training beginning riders. H-D indicates such a bike will be available within three years. I doubt that’s very comforting to dealers who need the bikes for the program now, however. And I’m not sure that Harley is going to like the image of riders on Honda Rebels taking their proprietary training.
Anyway, the full press release can be found here.
The three new models are shown below.
2011 Harley Davidson Road Glide Ultra
2011 Harley Davidson Sportster XR1200X
2011 Harley Davidson Sportster Super Low
Of the three new bikes, only one is relatively new, the XR1200X–which has been out for almost a year–one is an “Ultra” trim model of the the existing Road Glide, and one is a lowered Sportster 883.
The Super Low is the bike Harley-Davidson now says is suited for beginning riders. Personally, I think anything over 650cc is a bit too much for a beginning rider. If you positively have to start riding a V-Twin, I’d recommend the V-Star Classic or the Suzuki S50, both of which are substantially lighter, and substantially less expensive–$1500 in the case of the V-Star–than the Super Low.
If you really want a good beginner bike, skip cruisers and sport bikes altogether, and get a Kawasaki Versys. It’s 100 pounds lighter, it sits the rider up high enough that you can see over traffic–and traffic can see you–far more maneuverable and confidence inspiring, and still costs $500 less than the Harley.
In my opinion, you need some miles under your belt before buying a Harley–or a Kawasaki Vulcan 900, or a Honda VTX 1300, for that matter. Later on, if you want a big cruiser, then save your pennies for a Road Glide. As far as I’m concerned, the Road Glide is the nee plus ultra of big V-Twin cruisers.
Good news from–and FOR–the MoCo
Harley-Davidson announced its 2nd quarter earnings today, showing continuing improvement in key areas, blah, blah, blah. Forget the financial stuff. What leaps out at you is this statement:
Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults.
Now that’s very interesting, indeed, considering that the average rider age of Harleys has been increasing steadily. Without attracting younger riders, H-D is in for a long, slow decline as their current riders die off. But the phrase “market share leader of on-road motorcycles among young adults” can mean a lot of things. What is it really telling us?
The Kneeslider’s Paul Crowe did some calling around and learned:
[T]he relevant statistics are from R.L. Polk and were covered on the earnings call yesterday.
· . . . in the U.S., no one is reaching new customers better than Harley-Davidson.
· Based on recently provided Polk data, we have been the heavyweight motorcycle category market leader in new motorcycle sales to young adult men and women ages 18 to 34 since at least 2006.
· We have also been the heavyweight market leader since at least 2006 in new motorcycle sales to women riders, Hispanic riders and African American riders ages 35 and older. Of course, we are also the market leader among Caucasian men ages 35 and older.
· And when it comes to new motorcycle sales to young adults in ALL sizes of on-road motorcycles, Harley-Davidson has been the U.S. market share leader since 2008.
While talking to Bob Klein, I also found that a lot of this is directly attributable to sales of the Iron 883 and the Forty Eight.
That’s very, very positive for the Motor Company.
Bashing Harley
Look, I have no animosity towards Harley-Davidson. But funny is funny, and this video below…well, that’s just some funny stuff, there. Obviously, the Buell fans still feel a little miffed.
ATK Signs Deal for Street Bikes
Back in November, I wrote that US dirt-bike maker ATK and Korean conglomerate S&T inked a deal for ATK to assemble ATK-branded street bikes at some select Harley-Davidson dealerships. It’s a dealer-level deal, and has nothing to do with the Motor Company itself, just some dealers put together by ATK’s CEO Frank White.
This week, we get an update, with ATK and S&T formalizing a deal for 33,000 motorcycles over the next four years. The models below are the ATK-assembled and badged bikes whose parts will be brought in from Korea:
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- ATK 250 V-Twin Cruiser
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- ATK 650 V-Twin Cruiser
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- ATK 250 V-Twin Sport
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- ATK 650 V-Twin Sport
There will be two 250cc models, a sportbike and cruiser, and two similar 650cc models.
According to Frank White’s statement in the ATK Press release:
White is quick to explain that The Harley- Davidson Motor Company does not endorse or support this joint venture in any way. White states; “Nevertheless, our new products fit the current Harley-Davidson dealer need and move to offer both the dealer, and more importantly, the retail customer, a complete staircase of V-twin based products, which only acts to complement the current Harley-Davidson product line-up.”
“The approach is simple; get new and younger riders to go into the Harley-Davidson dealerships,” explains White. “We want to capture those customers who are initially looking for a smaller displacement motorcycle, at an affordable price, and then over time these new riders will develop the aspiration for a traditional Harley-Davidson.”
HD may not have any part of this deal, but I’ll bet they’re watching it closely.
How to Save Harley-Davidson – Step 2
A&R presents part 2 of How to Save Harley-Davidson. Folowing on their marketing advice, they start by pointing out the problem with Harley’s product line.
35 motorcycles, 7 model lines, 4 chassis, 3 motor families, & 1 market segment, that’s Harley-Davidson’s product line by the numbers. Where many large production motorcycle companies might have 30 or so motorcycles that span the entire gamut of motorcycling’s different sub-markets, Harley-Davidson has put all of its eggs in the heavy cruiser market. This singular pursuit of one market segment has not only been the cause for Harley’s success, but also a significant contributing factor to the company’s recent downfall, which has led to a recently rumored leveraged buyout. [One of the reasons for Harley's stock price increase over the last few weeks is rumors of an impending private-equity buyout.-- Ed.]
As the old idiom goes, one should not put all their eggs in one basket, which is exactly the faux pas being committed here by Harley-Davidson in its product offering. Businesses, especially public ones, should always have an eye on sustained long-term growth, and a key element to that goal is a well-diversified position in their appropriate industry. Taking this lens and applying it to Harley-Davidson, one can immediately see a portfolio that has been extensively mismanaged by focusing on only one segment of the total motorcycle industry: the heavy cruiser market.
What this has effectively created is a motorcycle company that looks like Alfred Hitchcock’s take on Baskin Robins: 31 flavors, but they’re all Rocky Road.
If you count the new Trike, Harley really has 5 motorcycle models, although one of the Models, the Sportster, has two engine sizes, albeit they use the same engine with different cylinder bores. Essentially, those five bikes come in 35 factory option packages.
As A&R points out, what Harley doesn’t have is any sort of light, performance oriented machine, like a cafe racer or scrambler. I would go a step further and say they also don’t have any sort of lighter, entry-level cruiser.
Even if HD has no interest in getting into modern sport-oriented bikes–and there’s nothing wrong that attitude–they don’t even offer a lighter, smaller-engined entry-level cruiser. Their”entry-level” offering is a 600-lb, 1200cc Sportster. And whatever else it may be, the Sporty is by no means an entry-level motorcycle.
They already have the basic tools and expertise to build smaller, more performance oriented cruisers, and entry-level bikes. But they’ve invested so much of the company in catering to the baby boomers, they arean’t offering bikes that appeal, by and large, to new entrants into motorcycling, or to riders that want even a small amount of get-up-and-go in their rides.
That’s been a fantastic strategy for the past 30 years, and it’s served the company well. There’s only one problem with their strategy of selling to the Baby-Boomers. The Baby-Boomers are starting to die. So, it’s not a market with a lot of growth potential moving forward.
Saving Harley
Jensen Beeler at A&R has kicked off a 3-part series on what Harley-Davidson needs to do to prevent the company from dying along with their aging demographic. He starts off with the same premise I wrote about last summer, but really drills down into the details. It’s a fantastic piece about H-D’s ongoing marketing failure. Read the whole thing.
Harley-Davidson Racing
Vance & Hines and the AMA Pro Racing series have teamed up to create a brand new racing series for the Harley-Davidson XR1200. Granted, the XR is the only Harley that can be said to have any pretensions to being a racing bike…of some kind. A&R has taken the press release of the big announcement, and helpfully translated it, line by line, as follows:
“We have racing in our DNA, Harley-Davidson has racing in their DNA and we are truly thrilled to bring Vance & Hines and Harley-Davidson back into AMA Pro Racing,” Terry Vance, a prolific champion as both rider and team owner, said of the new series. “The XR1200 has proven to be an exciting platform for spec racing in Europe and this class will be a perfect cost-effective platform to showcase new talent on a national stage. Many of the finest motorcycle racers all over the world got their start in the AMA Supertwins class of the 1990s.”
Translated: We’re going to just lie for a minute and then justify this series with some loose mentioning of racing in the company’s past, which an entire generation doesn’t remember because it happened before they were born. First one to mention flat-tracking loses the argument…
AMA Pro Racing Chief Operating Officer David Atlas welcomed the new series, “Adding another element to our events with a series of this caliber will be a great benefit to our sport. The specification of the XR1200 package will put the premium on the rider’s ability and will provide a great new class of racing that has ties to the past.”
Translated: We’re actually telling the truth now. This series will really showcase a rider’s skill, especially while they try and maneuver a 600lbs motorcycle through chicanes with some of Milwaukee’s finest engineering from the 1950’s.
Read the whole thing, it’s priceless.
Oh, by the way, the big purse for the winner is…$2,500. So, building an XR1200 into a race bike will be, like, totally worth it.
Try This with your Road Glide
Kain Saul has converted a Harley-Davidson Xr1200 to Dirt use–including a heavily modified suspension–taken it out into the Australian countryside…and done a back-flip on it.
Pretty cool.
And, yes, I do know that Chuck Carothers did the same stunt in Czechoslovakia. Or the Czech Republic, or whatever the hell it’s called now. But he didn’t stick his landing and got thrown off the bike.
FAIL!
Free Erik? Done.
As of this afternoon, Harley Davidson announced that Erik Buell has left the MoCo, and is opening a race shop. His new venture, Erik Buell Racing LLC, will specialize in creating race-use only 1125r motorcycles under a lciense from Harley-Davidson.
As such, he will no longer be an employee of Harley-Davidson, and will once again be directly involved in the motorcycle racing world.
The fascinating question is whether or not this is just a stop-gap venture to take up his time until February 2011, when his no-compete contract with H-D expires, and he is free to join up with another motorcycle company to begin building bikes for the rest of us again.
The full press release from Harley-Davidson is below the fold.
ATK & S&T Deal: Update
ATK CEO Frank White has sent me the following email in regards to the deal that ATK has made to sell American-assembled motorcycles from S&T:
Buon Giorno from EICMA Italy (Motorcycle Show)
One of our Harley Dealers is a regular to your site and suggested I make some comments to the recent posts to set the record straight. I normally avoid BLOG’s however, what the heck, your site seems quite good and your information is factual.
A comment on ATK taking the place of Buell on some BLOGs.
We are NOT working through the H-D Dealer network under the endorsement or support of the Harley Davidson Motor Company in any way. This is stated on the press release.
We are NOT going to be making products in the same market niche/segment that Erik Buell was making. Erik is a Maverick in innovation and development in his part of the industry and we would be fools to try and step in. Obviously with H-D pulling the plug has created a vacuum of opportunity in the network that want American Branded products.
Some of our Dealers sent me the gut wrenching U Tube link with Erik and I feel for the guy. We’ve been in business basically the same amount of time and this is NOT an easy business.
Our focus is going to be attracting an all new and much younger customer into Harley shops with a diverse quality platform of products. (Like Scion is to Toyota) We also want to get more people in the motorcycle world like the industry did so well in the 70′s… This should be interesting
Feel free to post this.
Ciao
Frank White
ATK Motorcycles
In my previous post, I did append the press release, which does say that this is a deal that Harley knows about, but does not endorse. I also stated:
It’s a bit of a coup for Harley dealerships, and possibly for Harley-Davidson itself–as well. They will–or at least selected dealers will–have access to new lines of motorcycles to bring in younger customers. This is especially true if the ATK dirt bikes can also make an appearance on dealer showrooms.
Let me clarify what I meant here. To the extent that new, younger riders are drawn into Harley dealerships, The MoCo will, if this deal operates successfully, eventually have access to these new dealership customers when they begin looking for large displacement motorcycles. I did not intend to imply that this was part of any strategy on the part of Harley-Davidson. This is something at will operate purely at the dealer level with some select dealers, and any advantages that accrue to the Motor Company will be more or less incidental.
And, of course, implying that HD itself was part of this would imply that HD actually had a strategy. Which, after the MV Agusta deal and the closing down of Buell, is a pretty questionable implication.
Buon Giorno from EICMA Italy (Motorcycle Show)
One of our Harley Dealers is a regular to your site and suggested I make some comments to the recent posts to set the record straight. I normally avoid BLOG’s however, what the heck, your site seems quite good and your information is factual.
A comment on ATK taking the place of Buell on some BLOGs..
We are NOT working through the H-D Dealer network under the endorsement or support of the Harley Davidson Motor Company in any way. This is stated on the press release.
We are NOT going to be making products in the same market niche/segment that Erik Buell was making. Erik is a Maverick in innovation and development in his part of the industry and we would be fools to try and step in. Obviously with H-D pulling the plug has created a vacuum of opportunity in the network that want American Branded products.
Some of our Dealers sent me the gut wrenching U Tube link with Erik and I feel for the guy. We’ve been in business basically the same amount of time and this is NOT an easy business.
Our focus is going to be attracting an all new and much younger customer into Harley shops with a diverse quality platform of products. (Like Scion is to Toyota) We also want to get more people in the motorcycle world like the industry did so well in the 70′s… This should be interesting.
Feel free to post this.
Ciao
Frank White
ATK Motorcycles
S&T and ATK Get Inside the Harley Dealer Network
Practically no one saw this coming, or were even in the ballpark of predicting it, and I’m interested to see what the motorcycle press will make of it, since I’m sure that some of them, like me, have been aware of this for at least several weeks now, although the news has been embargoed, so no one could report on it.
As of today, the embargo has been lifted, and we are now free to speak about it.
First, the press release from S&T/ATK, makes the bare bones facts available. S&T motorcycles, the Korean manufacturer of the Hyosung brand motorcycles will be working directly with ATK motorcycles, the US manufacturer of dirt bikes. Together they will produce a motorcycle that will be largely produced in Korea by Hyosung and assembled in the USA by ATK. These ATK-badged motorcycles will be smaller displacement motorcycles that will be sold in selected Harley-Davidson dealerships.
Sources close to the deal tell me that ATK may also begin selling their off-road motorcycles in some Harley dealerships as well. It is not yet entirely clear which of the ATK-badged Hyosungs will be made available to the Harley Dealers, although the new 700cc Aquila is a likely candidate.
Sources also tell me that it is possible–although exactly how possible is still unclear–for modified versions of the 250cc and 650cc cruisers and sportbikes, with new bodywork created by ATK, are candidates for those dealers who desire them, to help bring in the younger riders that Harley so desperately needs, as their current rider community is aging rapidly.
This is a coup for both ATK and S&T. ATK now has a chance to substantially increase their penetration into the Harley-Davidson dealer network. S&T has a chance to get deeper into the US Market–which has regarded their products with some suspicion due to confusing Hyosung with a Chinese, rather than South Korean company–by having their bikes branded with an American manufacturer’s badge.
It’s a bit of a coup for Harley dealerships, and possibly for Harley-Davidson itself–as well. They will–or at least selected dealers will–have access to new lines of motorcycles to bring in younger customers. This is especially true if the ATK dirt bikes can also make an appearance on dealer showrooms.
The hope is that everyone can win by making the dealerships places where a number of different product lines can be found, in order to bring in a wider, and one hopes, younger, group of riders through the door.
The full text of the press release is below the fold.
Grasping at Straws?
The announcement of Buell’s shut-down by Harley-Davidson is still spreading ripples through the motorcycle world. But, closer to Buell’s home, city and county officials are looking into trying to save the Buell manufacturing facility–and the local jobs it supported–in Walworth County.
If Erik Buell is interested and able to participate in a new venture, the Walworth County group will explore further steps, including trying to talk with Harley and seeking potential investors, Burkhardt said.
“We’ve had very preliminary contact from an investment group out of the Chicago area and also out of the Minneapolis area,” he said.
They only face two hurdles. First, no one at the Walworth County Economic Development Alliance has spoken to Erik Buell, so they have no idea if he’s even interested or available in working out such a deal. Second, harley-Davidson doesn’t seem interested in having these sorts of discussion at all. They just want to kill Buell.
Bob Klein, Harley’s director of corporate communications, reiterated that Harley is “discontinuing the Buell product line rather than selling the business because of how deeply integrated Buell is into our business systems and distribution network.”
That sounds…plausible. But I don’t think it’s the whole truth. Indeed, it’s not even the same story that HD was spinning a few days ago. Then, the decision to close Buell down was based on the very positive tax implications a shut-down would have, vice trying to sell the division.
And, while I certainly don’t want to assign impure motives to anyone at HD, there is a flavor of schadenfreude about the way the MoCo is handling this. Maybe it’s my imagination, but I can’t escape the sense that there’s some secret glee in Milwaukee over getting rid of Buell.
But, whether its the tax code, or sheer viciousness, the Walworth County effort doesn’t look like one that’s destined for success at the moment.
If. Erik Buell is interested and able to participate in a new venture, the Walworth County group will explore further steps, including trying to talk with Harley and seeking potential investors, Burkhardt said.
“We’ve had very preliminary contact from an investment group out of the Chicago area and also out of the Minneapolis area,” he said.
Harley Davidson Kills Buell, To Sell MV Agusta
I wish I could say I was surprised this morning to finally see the news made public that Harley-Davidson was going to sell MV Agusta, and shut down Buell’s operations. But, I wasn’t.
Let’s address the MV Agusta deal first. I never really understood exactly what the MoCo thought it was getting when it purchased MV and Cagiva. Turns out I’m not alone in that, since apparently nobody at Harley-Davidson did either. Cagiva was a financial basket case, and MV–though it had a glorious racing past and venerable reputation–had been reduced to a boutique maker of a small number of motorcycles.
And once HD had finished crowing about buying it, they proceeded to do…nothing. No press releases. No earth-shattering changes. They just let it sort of sit there. They owned it, but once they did, they didn’t seem to know what to do with it. So now, they’re selling it at what is probably going to be a deeper discount than they purchased it for, so it seems like it was just a multi-million-dollar bath for Milwaukee.
Oh, well, it’ll make a nice write-off against tax, I’m sure.
As for Buell, I’ve already gotten into some detail in the post linked above as to why the MoCo had completely bungled the management of Buell.
A brief tour of BadWeb, the Buell biker forum, today shows that the Buellers are no more receptive to hearing bad news about the company–nor any more prone to think about it realistically–than they were last month when I wrote that my sources indicated to me that Buell was probably going to be shut down.
It’s full of fantasies about some sort of demonstration to make HD reverse its decision. There also seem to be a number of analysts who write that this is an insane decision for the MoCo, because losing Buell will destroy Harley.
That’s just fantasy. Quite apart from the fact that Harley is doing a fine job of destroying itself by confining itself to an aging customer base, the fact is that Harley killed Buell a long time ago through their mismanagement of the brand. Killing Buell is a symptom of HD’s problem, not the cause of it.
The company says they are doing this to concentrate on their brand, by which I assume they mean continuing to market even more aggresively to their shrinking, aging customer base. As one industry wag put it to to me today, “How many more 52 year-olds looking for their first bike can they find?”
As far as Buell contributing much to harley financially, well, that’s just absurd.
In 2008, HD’s annual report states that they sold $313.8m in general merch, making up 5.6% of corporate revenues. Buell Motorcycles, on the other hand, made $123.2m in revenues, or 2.2% of corporate revenues. According to the company 10k statement for 2008, Buell accounted for 4,000 of HD’s 222,200 motorcycle registrations. Of the 686 HD dealerships in 2008, more than half of them don’t even sell Buells.
In other words, Buell accounted for 0.2% of HD motorcycle sales, and the MoCo made twice as much money selling orange dog scarves and rhinestone belts for girls than from the sale of Buell motorcycles.
So, the idea that keeping Buell motorcycles will make up for…well…anything at Harley Davidson is so at variance with the actual facts as to qualify as sheer fantasy. Let’s not pretend that Buell has either the user base or financial performance to rank as a serious part of Harley Davidson.
I guess it does show, though, that some people personalize their motorcycle brand very deeply.
I guess my take-away for those people is that sometimes, when people write negative things about your favorite motorcycle brand, it’s not because they hate it. Sometimes, they write it because it’s true.
Just something to think about.
So, the idea that Buell motorcycles will make up for…well…anything at Harley Davidson is so at variance with the actual facts as to qualify as sheer fantasy. Let’s not pretend that Buell has either the user base or financial performance to rank as a serious part of Harley Davidson.
Buell’s Future No Longer Uncertain
Last month, I wrote an article claiming that Buell’s future was uncertain, as a signifigant number of Harley-Davidson execs were leading a charge to eliminate the brand from the MoCo’s line-up.
Writing that story made me very unpopular in the Buell world for a few days.
Today, it became public knowledge that Buell is, indeed, on the chopping block. Harley Davidson is discontinuing the brand and shutting down Buell’s operations.
It’s a sad day, I think, to see a company that had so much promise destroyed by the squandering of the opportunities it presented.
Reading Between the Lines
Just before I left for vacation, I reported that an informed source had told me that the board members and top executives at Harley-Davidson were considering whether or not to keep Buell Motorcycles as part of the Harley-Davidson corporation. Naturally, I became the most hated man in Buell World for a day or two. Court Canfield even dropped in to tell me what an ass I am.
Now, I haven’t had a chance to catch up with my source since I got back from Alaska, but I did notice this story in Friday’s Milwaukee Journal-Sentinel. And when I did, I also noticed this line near the bottom of the story:
Erik Buell said he didn’t renew his employment contract with Harley-Davidson, although he isn’t planning on retiring.
Probably means nothing. No doubt there are any number of sound reasons why Erik Buell didn’t renew his employment contract with the MoCo. I am curious, though, as to what they might be.