Since Kieth Wandell took over from Jim Ziemer as the CEO of Harley-Davidson, analyst expectections have been that Wandell, an outsider bought in as CEO from Milwaukee-based automotive supplier Johnson Controls, would be a strong, take-charge leader who is well-suited to address the MoCo’s current challenges. One of those challenges may be Erik Buell, and Buell Motorcycles division. A confidential source with high-level contacts inside Harley-Davidson informs me that a number of H-D executives will be pushing to have the company divest itself of Buell Motorcycles, and that a decision to sell or shut down Buell may come in the near future.
The word is that both Buell and Harley-Davidson have found the relationship unsatisfactory for a number of reasons, including the company’s refusal to allow Buell to outsource anything but Evolution V-Twins for several years, and Erik Buell’s strained personal relations with a number of MoCo executives. With a company outsider who has no particular vested interest taking over the helm as CEO, and devastatingly bad sales results due to the current recession, some Harley executives believe that this would be the perfect time to kill the Buell division. If so, it would be a sad close to an overall sad chapter at Harley-Davidson.
In my view, Harley’s stewardship of Buell Motorcycles has been a classic case of a missed opportunity. The acquisition of Buell was a great opportunity for the MoCo to develop a line of race-bred sportbikes that could have made Harley a serious contender in that market. But, Harley-Davidson blew it.
The company’s refusal to allow Buell to use any engine but the air-cooled, V-Twin, Sportster-derived Evolution engine effectively throttled Buell from the very beginning. Whatever advantages may have accrued from implementing the Buell “trilogy of tech” in a sporting motorcycle were largely negated by the use of the underpowered Evolution powerplant. Harley seems not to have understood that creating a technically sophisticated sportbike that would get its lunch eaten by any 600cc sportbike produced by the Big Four was nothing but a recipe for failure.
Ironically, elements of the Buell “trilogy of tech”, especially mass centralization and low unsprung weight have shown up in competing sportbikes. For instance, the 2010 BMW S1000RR utilizes an under-body muffler arrangement very similar to Buell’s. So, clearly, the problem isn’t Buell’s technology, but rather the use to which it was put, prior to the release of the 1125R in 2008.
Harley also alienated its dealers by forcing them to accept consignments of Buell motorcycles that they didn’t want to sell, and, in many cases, knew they couldn’t sell. Not only were they being required to sell a sportbike that almost no one wanted–as Buell’s 2% market share of sportbike sales indicates–the MoCo never adequately invested in dealer training, in either the sales or service departments.
This is not to say that Erik Buell has been blameless either. He is reputed to be abrasive and difficult to work with by many H-D executives. This has resulted in bad feelings among executives that has made them less likely to give Mr. Buell’s opinions about the direction of Buell Motorcycles any serious consideration.
Moreover, Buell’s marketing and public relations have been marked by avoidable mistakes. For instance, the press reveal of the 2008 1125R–the only bike with Buell makes with a non-Sportster powerplant–was a disaster. Buell used pre-production bikes with faulty fuel management and suspension issues for the demonstrations given to the international motorcycling press. As a result, the general impression given by the media was of a mediocre bike with poor fueling, wallowy suspension, and quality control issues. Rather than waiting until the company had ironed out those issues satisfactorily, Buell went ahead with the reveal, which resulted in doing more harm than good to the bike’s image. Most recently, Buell’s callous dismissal of the Blast model for the 2010 model year, replete with disparaging comments about the bike, alienated many observers–not only in the press, but among Buell’s customer base as well.
If the anti-Buell Harley execs get their way, this long litany of failure will come to an end by pushing Buell out the door.
There’s been lot’s of buzz about this, but Harley-Davidson has made it official: The Motor Compnay will expand into india in 2010. Clearly, they’re hoping to recoup some of their losses from the disastrous decline of sales in the the US Motorcycle market. According to HD’s press release:
“India is important to our long-term vision of being a truly global company,” said Harley-Davidson Inc. President and Chief Executive Officer Keith Wandell. “We are committed to India for the long term, and we are focused right now on establishing a strong foundation.”
India is the second-largest motorcycle market in the world, with sales dominated by small, inexpensive bikes used as basic transportation. However, India’s rapidly growing economy, rising middle class and significant investment in construction of new highways have opened the door to leisure motorcycle riding.
Whether it will have opened the door wide enough for Harley to make some sales there is still an open question, since the move is not without risk.
First, despite its recent economic growth, India is a desperately poor country. To the extent that more people can afford to ride motorcycles there, they are riding inexpensive, sub 650cc bikes, not large, expensive Harley-Davidsons. As I’ve mentioned before, Harley simply doesn’t have a motorcycle that can fit the bill for a developing country, namely a small, inexpensive motorcycle.
On top of that, India is a severely protectionist country, with a 105% import duty on motorcycles. That means a $10,000 Sportster becomes a $20,000 Sportster in India. I’m not sure how many units they’re going to sell in a country where the annual average income is $1,100.
Third, India, being a desperately poor country, has an infrastructure to match, i.e., roads in horrifically bad repair, which are not the best placed to be ploughing along on a 600-pound+ motorcycle.
Harley’s main competitor there will also be homegrown firms like India’s Royal Enfield motorcycles, who make little 125cc and 250cc thumpers. Royal Enfield has, in fact, done very well, and has seen huge sales growth in India.
But, then again, they aren’t asking people to give them 20 years worth of income for a motorcycle.
One also notes that Suzuki and honda are already in India. The difference being that they are both manufacturing motorcycles there, and thus avoiding import duties. They are also concentrating on entry level (sub 125cc) motorcycles, and standard 125cc-250cc motorcycles. Suzuki recently announced that their entry-level motorcycle operations are expected to break even this year.
Motorcyclist Online has the results of their big-tourer comparison between the Harley Davidson Electra Glide Classic and the Kawasaki Vulcan 1700 Voyager. I’ve long wanted to see a head-to-head match-up between the king tourer from Harley and Kawi’s new flagship tourer, and here it is.
The Electra Glide sports Harley’s now touring frame, which is supposed to noticeably increase stability and handling, while the Voyager is a brand new version of the Vulcan, with a brand new frame, too.
The Harley costs significantly more than the Voyager, and reading the write up, that extra money pays off in a better, more refined handling, greater rider and pillion comfort, and better brakes and luggage. The Kawasaki, on the other hand, seems to have the Harley beat in wind protection, engine power (slightly), and lighting (a lot).
Overall, the Harley has better fit and finish–which is unsurprising to me, since I’ve always thought Kawasakis are a little rough around the edges. They aren’t bad bikes, but, I’ve just never been a big Kawasaki fan. But, it’s nice to see that it’s not just an unreasoning opinion on my part, and others seem to think Kawi could use a little improvement in the finishing touches.
Still, for $3,000 less, the Voyager’s no doubt put together adequately.
Both bikes, of course, are massively underpowered from my point of view. But then, I’m riding an FJR with 200 pounds less weight, and twice the horsepower, so take that into consideration.
I will tell you where I would throw my lot in with the kawi on this one, though, and that’s the fixed fairing. I’ve never liked the batwing fairing on the Harley’s. They look great, but having 40 or 50 pounds of plastic hanging off the front fork never appealed to me. And I’ve ridden the Electra Glide, and confirmed that opinion.
That’s why my next Harley will be a Road Glide.
Several days ago, I wrote a post on Harley-Davidson’s ongoing strategic marketing failure. That post has garnered quite a lot of attention in certain quarters. Today I had an email exchange about it with motorcycle industry analyst and guru Don Brown.
My previous post addressed how the MoCo was failing in its marketing, but not why. Mr. Brown provided me with some historical context that may illuminate the roots of this problem.
The trouble with Harley, in my opinion, is that they can’t shake loose from their memory of the terrible reaction of many of their customer base – mainly the older baby boomers who hated anything that smacked of being of modern technology.
Since their near-death experience and the resistance of their core customers to technological innovation in the 80s, it seems like the company’s version of “protecting the brand” has become never to do anything different, or innovative.Well, that does bring back some memories, such as the Nova 800 project, a concept for a water-cooled V-4 bike. It went nowhere, of course, although the company spent a pile of money on it, and actually produced three of them.
But it puts the company’s current fear of tarnishing the brand in historical perspective. They are rabid about doing whatever is necessary to protect the brand, as they see it. A few weeks ago, I was reading one of the industry media web sites–unfortunately, I forget which one–and they asked a HD representative about a rumor concerning the possibility of a water-cooled V-4 powerplant. The rep said bluntly, “Harley-Davidson makes V-Twin motorcycles”.
Since their near-death experience and the resistance of their core customers to technological innovation in the 80s, it seems like the company’s version of “protecting the brand” has become never to do anything different, or innovative. They play to the same customer base. They refuse to change their styling beyond shifting what bit of chrome goes where from year to year. And then they do make a change, it consists of occasionally adding non-threating bits of technology like vibration absorbing engine-mounts, incrementally larger engines, or hidden changes to the frame or suspension.
And, of course, to cut motorcycle production any time it appears an inventory may build up, in order to keep supply artificially low, and the prices high.
Now, there’s nothing wrong with that kind of conservatism in the short run. At times–and the 80s seem to have been one of those times for HD–it may even be necessary. But the danger of doing that sort of thing, if it goes on too long, is that it begins to fix itself in the corporate culture. Once an excessive conservatism embeds itself in a firm’s culture, the brand ceases to be an powerful asset to be used in leveraging innovative new products. Instead, it turns into a treasure to be hoarded.
Once an excessive conservatism embeds itself in a firm’s culture, the brand ceases to be an powerful asset to be used in leveraging innovative new products. Instead, it turns into a treasure to be hoarded.But that is never a long-term strategy for success for any brand. Markets change. Customers change. Tastes change. Competitive landscapes change.
Eventually, the brand suffers, because as the market changes, the brand gradually becomes associated with old, outmoded tastes. The brand loses its power to attract new customers, because they think, “That was the stuff my dad liked, back in the day.” That almost automatically means, “I like different stuff,” to the newer customers in the market.
This is precisely what has happened to Harley-Davidson. A corporate mania for brand conservatism has led to a situation in which amazing technologies are available for nearly every motorcycle…except Harley-Davidson. Most GenX or GenY customers won’t even look at a Harley-Davidson. They see the brand they same way they see their parents: old and slow.
That’s true literally as well as figuratively. The Harley-Davidson Sportster, about as light and as fast a motorcycle as Harley makes in stock form, runs a 13-second quarter mile. A 900 pound Gold Wing does it in 12 seconds. A Shadow Spirit 750 does it even faster.
The end result is a brand whose products cost more and perform worse than the competition’s.
A Harley Davidson customer transplanted from 1970 could walk into a Harley-Davidson dealer today, and literally see nothing that would frighten or confuse him.It’s not just the consumer market that’s changed either. The competitive landscape is radically different, too. Harley-Davidson today makes essentially the same motorcycles it’s been making for 50 years. Except for, perhaps, the V-Rod, a Harley Davidson customer transplanted from 1970 could walk into a Harley-Davidson dealer today, and literally see nothing different that would frighten or confuse him.
But what’s even worse, from a competitive point of view, is that he would also see no bike that a young, beginning rider would feel comfortable purchasing. The Sportster has an engine of the same displacement that and FLH had in 1970. It weighs nearly 600 pounds. Even if the average 20 year-old could afford it, it is still an intimidating beast to young new–or female–rider. My wife can’t even pick up any Harley except the Nighster. And she finds it frighteningly heavy even then. She almost can’t even touch the floor with her toes on any other model. That’s not a good thing, when 14% of motorcyclists are now women.
That’s emphatically not true, however, if you walk into any dealer of Big Four motorcycles. A first time rider has an amazing range of choices there, from a sporty Ninja 250, to a Boulevard S40. Yamaha dealers will happily sit a young rider on a V-Star 250, and, for less than $4,000, send him off riding happily into motorcycling world on an easy to ride, light, little cruiser.
And when they do so, they have an excellent chance of sitting him on a V-Star 650 a couple of years later. Or if he or she decides that a need for speed has to be satisfied, why, there’s a pretty little R6, sitting right over there. The Big Four grab beginning riders right out of the box, putting the youngsters astride a little Rebel, and they keep them right up until they take that last ride into the sunset on their Gold Wing.
Harley-Davidson, on the other hand, still acts as if it’s 1968, and, once you’ve exhausted the possibilities available on a BSA 500 or Triumph Bonneville, you have to buy a Harley if you want a big bike, because no one else makes one. But in 2009, you can get the full motorcycling experience–commuting, touring, naked street-fighters, or race bred literbikes–without ever having to change brand loyalty even once.
The Big Four grab beginning riders right out of the box, putting the youngsters astride a little Rebel, and they keep them right up until they take that last ride into the sunset on their Gold Wing.Harley-Davidson has no entry-level motorcycles, so they can’t grab the young 20 year-old looking for a good first bike. Instead, their task is to try and convince a seasoned rider, who has a pre-existing brand loyalty, to change that loyalty to Harley-Davidson. And that rider not only has experience with his preferred brand, but knows that his preferred brand makes similar motorcycles, at a lower cost.
That’s a tall order. Based on HD’s aging demographic, it doesn’t seem like the MoCo is capable of fulfilling it at present. They’ve abandoned the young rider demographic, and in so doing, they’ve let their competitors grab the younger riders and begin building brand loyalty from the very start of their customers’ riding careers.
Unless Harley-Davidson is willing to expand its horizons, it is in danger of becoming a much smaller maker of what are essentially high-priced boutique bikes…much like the brand they recently acquired, MV Agusta. I would hate to see that happen, but absent some serious changes in their corporate mindset, that appears to be the road on which they are traveling.
If you live in bear country, you probably already know not to keep food in a car, because bears will tear a car apart to get at a box of donuts, or whatever. Now, it appears that even transporting food may be a problem. Especially in a motorcycle.
Wells and his wife had taken his 2004 Harley-Davidson motorcycle out to get a pizza for dinner. They put the leftovers in the tour pack on the back of the motorcycle for the ride home.
“We got home around six, took the pizza out of it right away and put it in the refrigerator,” said Wells.
Three hours later they heard something outside, near where his motorcycle was parked. Wells went outside to investigate.
“I came around and shined the flashlight and my bike was on its side and a bear cub was on top and another bear cub was behind it and the momma was right there too,” remembers Wells.
The bears ripped the tour pack apart trying to get to where the pizza at one time had been. In the process they did around $3,000 damage to the bike.
So, three hours later, just the 3 hour-old smell of pizza in this guy’s tour trunk was enough to get it seriously molested.
And you thought deer were a problem…
The annual march of media bike choices continues, with Motorcycle.com weighing in with thir top picks of the year. Their choices are interesting, and a bit different than I would have expected.
For the overall bike of the year, they picked the Triumph Street Triple R.
Best Sportbike honors go to the Kawasaki ZX-6R, with the runner-up being the Honda CBR1000RR.
The Ducati Monster 1100 gets the nod for best standard motorcycle, with second place going to the Harley-Davidson XR1200.
The best cruiser pick is the all new Triumph Thunderbird 1600, with the Suzuki Boulevard M90 taking an honorable mention.
The award for best touring bike goes to the BMW R1200RT, closely followed by the Honda Gold Wing.
BMW also take both first and second place spots for sport-touring, with the K1300GT winning, and the F800ST getting the honorable mention.
BMW stays in the winner’s circle for best off-road bike, with the top honors going to the F800GS, and the second spot going to the Aprilia SXV/RXV 5.5.
They also have picks for best eccentrics, scooters, technology, and more, so why not go there and read them?
Harley-Davidson has come up with a good idea, and it’s one that really should be implemented as widely as possible. The MoCo will be implementing the Harley-Davidson Fit Shops at dealers all over the country.
Dealership Fit Shop specialists work with current and prospective Harley-Davidson motorcycle owners to help customize the suspension, seat, handlebars and/or foot controls to meet their riding preferences. New riders may not realize all the customizations that can be made to a bike to make it a one-of-a-kind ride based on build and preference, while long-time riders may not know about the latest customization options. Any Harley-Davidson model can be customized to fit most riders.
Most motorcycles can be fit precisely to a rider, but most riders don’t do so. Most modern motorcycles have fully adjustable suspensions, and the idea is to dial in the suspension to match the rider’s weight, riding style, etc. Dialing in the suspension to fit the rider makes the motorcycle handle and ride better. But, all too many riders accept the factory stock settings, and ride off into the sunset, occasionally issuing complaints about how their bike wallows in the corners or whatever.
By taking stock of all the customization options, and having a trained specialist help each purchaser to dial in the bike’s settings to fit the individual rider, you end up with a more satisfied customer, who’s happier with his motorcycle’s comfort, ride, and handling.
And who knows, you may end up with a rider who is a little better educated about his bike.
Kudo’s to Harley for taking a step forward that dealers of other motorcycles would be wise to copy. Not only does it help make for a more satisfied customer, it also has positive implications for motorcycle safety. Big Four dealers should take a look at doing something similar. It would be a big help to their customers.
A few months ago, in April, the May edition of Cycle World magazine (link unavailable, it was print) printed a rumor on page 24 that Harley-Davidson was working on a V-4 power plant for…something. Even Cycle World didn’t know:
Harley-Davidson is rumored to be working on a new V-Four engine. It is unclear whether the engine is for use in traditional H-D products and/or for Buell.
It was an interesting rumor, but nothing’s come out of it yet.
Now, there’s a new rumor floating around, which is that the MoCo is working on a brand new café racer bike.
There might be a pulse after all in the town of Milwaukee. A&R has gotten word that the Sultan of Slow is working on a cafe racer motorcycle, similar to the classic XLCR 1000.
If true (and not flubbed like the V-ROD), Harley-Davidson may have found the happy merger of maintaining its brand identity, and manufacturing a motorcycle for people that never owned a black & white television. We secretly hope this rumor is associated with the Harley-Davidson V4 rumor we heard not so long ago, but that may also then indicate Hell freezing over and the Earth collapsing in on itself like a dying star…
We’re always cautious about rumors here, and even more so when they involve H-D doing something right; so as usual, time will tell on this one.
I, for one, hope so. H-D has such a great brand with so much potential energy, that they could be a powerhouse in motorcycling, if they’d just step out of the 60s.
The ambient air temperature read 87° as I pressed the starter switch on the blue-on-white Buell 1125R, and prepared myself for the slight possibility of fun.
I say “slight possibility”, because the restrictions that Biggs Harley-Davidson in San Marcos, CA had set on the test ride were stacked against any serious test of the motorcycle’s capability. First, I was restricted to riding a pre-defined route that would prevent any serious test of the bike’s handling. Second, I was required to ride behind an accompanying Biggs employee, who would be riding a…wait for it…Street Glide. Now the Street Glide is a beautiful motorcycle, but any casual listing of it’s outstanding characteristics would not include “Sharp, high-speed handling”.
I was told, however, that I was lucky to be allowed to take a test ride at all, because “the insurance company classifies them as ‘superbikes’, we we were lucky to allow anyone to take a test ride.”
And you can believe as much of that as you please.
Starting up the 1125R rewards you with a decidedly un-Harley-like, yet recognizably V-Twin rumble. It’s a fairly unique sound, and after thinking about it for a while, I decided that it sounds sort of like a WWII aircraft engine.
The first few minutes I spent in the parking lot, doing a couple of figure-8s, and playing with the low-speed handling of the bike. For someone like me, who rides at low speed using the techniques from the “Ride Like a Pro” series of DVDs, the 1125R is resistant to the trail-braking techniques. That’s because the rear brake is essentially useless. There is no feel whatever, and even a hard stomp on the brake pedal rewards you with…nothing.
This was a recurring feature of the ride, since I tend to use my rear brake a fair amount, and I had to adapt my riding style to essentially ignoring the rear brake and concentrate on two-finger front-braking. I use my rear brake and engine braking to scrub off speed when approaching corners, and the 1125R doesn’t reward that technique at all, though the engine-braking is quite acceptable.
Conversely, the front brakes worked very well. They were grabby, and had plenty of feel. And the bike didn’t stand up straight under light front-braking.
Getting onto the street, another adjustment I had to make was the use of the clutch. It takes hardly any squeeze at all on the clutch lever for it to fully engage, and the engagement and disengagement is fairly abrupt, due to the small amount of required travel. By the end of the ride, I had adapted to it, but it took a bit for me to figure out how to shift smoothly, and not apply to much RPM before the clutch engaged.
Ergonomics are described by Buell as “athletic”. I’d describe them as fairly comfortable in sportbike terms. They’re certainly more relaxed than I expected, and you can ride the 1125r without leaning on your wrists, and laying on the tank. You are crouched forward, and pegs are high, but not so far forward, and not so high that it becomes quickly uncomfortable. It may be a racing bike, but it is a bike you can ride.
Even at very low speeds, the exceptional balance of the 1125R never gives you the feeling that you’re about to fall over.On the street, the broad torque curve is forgiving, and the engine responds promptly in any gear. Unlike the long-stroke V-Twins on most cruisers, the high-revving short-stroke Rotax engine rewards throttle inputs with prompt obedience, the power is linear, and willing to surge higher at the flick of a wrist. While lofting the front wheel on the 1125R could be done with ridiculous ease, the power is easily tameable. It doesn’t get out of control, and doesn’t surprise you. It merely does what you ask, when you ask.
I’ve read several reviews of this bike, and many of them have mentioned buzzing and vibration at certain RPMs. As far as I could tell, it had typical V-Twin character, with buzzing and vibrations everywhere. I expected that, and I don’t really understand why anyone would complain about it. You can drop in as many counter-balancers as you want, but no V-Twin with ever be electric-smooth. That’s just not the character of the engine type. As far as I could tell, the Rotax engine really showed off a lot of the character that makes the V-Twin engine so lovable.
Having said that, it’s not a smooth bike. The vibrations do make the rear-view mirrors essentially useless at speed. But, if a glass-smooth engine and perfectly clear rear-view mirrors are your deal, then a V-Twin bike probably isn’t for you.
Doesn’t make you a bad person.
As we entered the I-15 from Escondido, I could see my minder from Biggs drop his elbow as he twisted the throttle for all his Street Glide was worth. With a very slight twist of the throttle, the 1125R stayed right in formation with him. I did, however, find the mild acceleration amusing.
The 1125R is not only very stable at highway speeds, the way the fairing directs the airflow was perfect for my 5″10″ frame. There was no buffeting at all, just a nice stream of clean air at the top of my chest and shoulders. Dropping into a slight tuck made even that go away. The fairing design on the Buell is quite effective, which would make highway trips far less fatiguing.
While the route we traveled contained no twisties, while we came back on the Old Highway 395, I did do a little playing with the bike’s response to body position. Putting weight on a footpeg, leaning your upper body, even looking and shifting a butt cheek puts the 1125R in the mood to lean. there were a couple of turns on our route, and when going through them, the 1125R was composed, and tracked like it was on rails. It effortlessly took a line inside that of the Biggs minder and his Street Glide, and stayed on that line like it was on rails. I had wondered whether the relatively steep rake and short trail would make the Buell twitchy in corners, and as far as I can tell from my limited experience, it doesn’t.
The only major drawback to the 1125R was the leaden ineffectiveness of the rear brakes.In fact, it’s very stable at all speeds, and in all conditions–admittedly limited ones–I subjected it to. Even at very low speeds, the exceptional balance of the 1125R never gives you the feeling that you’re about to fall over. You can crawl this bike along in city traffic at walking speeds, and never take your feet off the pegs. You don’t usually think of sportbikes as particularly forgiving or confidence inspiring, but the Buell 1125R is exactly that. That, combined with the more forgiving ergonomics, make it a joy to ride.
Heat management on the Buell 1125R can be described with one word: Nonexistent. That bothers some people. Meh. I live in the desert. Everything’s hot. So, the 1125R has no lower fairing to generate the nasty heat away from you. Man up and deal with it.
The only major drawback to the 1125R was the leaden ineffectiveness of the rear brakes. I didn’t like that at all. As far as other negatives goes, I did notice that the gear shift selector read “Gear: –” for the entire ride. And, while the analog Tachometer dominates the dashboard display, you tend to have to hunt for the digital speedometer. On a bike that can cause you to travel at license-losing speeds at the drop of the hat, a more prominent speedometer might be helpful. Finally, the switchgear on the handlebars look amateurish and clunky, and sport annoyingly bright colors. They look out of place on an otherwise well-crafted bike.
On the plus side, this is a genuinely fun and–in sportbike terms–comfortable bike to ride. It’s definitely not a beginner’s bike by any stretch of the imagination, but for an experienced rider, the Buell 1125R is versatile enough to use as a daily commuter at nice, sedate speeds, and a weekend hooligan bike for more…ahem…energetic riding.
I like it a lot.
Harley-Davidson, whatever the company’s faults may be, have gotten one thing consistently right: Marketing. They are a marketing powerhouse. When you buy a Harley-Davidson, you don’t just buy a motorcycle. You buy a ticket to the “Harley Lifestyle”. The company’s marketing is ubiquitous and effective. But not perfect…
H-D’s CEO, Keith Wandell, admitted in an interview with The Business Journal that the company flubbed their forecasts of the recession’s impact on their customers’ buying choices.
[T]he company mistakenly thought the recession would push consumers toward Harley’s Sportster and other less expensive motorcycles.
The company increased production of those types of bikes, but retail sales “didn’t materialize,” he said.
Harley dealers currently have a glut of the mid-priced V-Rod models.
Instead, many consumers who have been buying Harley-Davidson motorcycles have been buying more expensive custom and touring bikes, Wandell said.
“It left us with a bigger imbalance,” he said. “We have a lot of inventory.”
As a result, Harley-Davidson will shut down final assembly operations of the Sportster and V-Rod motorcycles and V-Rod motorcycle powertrain production in Kansas City, and production of Sportster motorcycle powertrains in Wauwatosa, for 14 weeks this year, including all of the fourth quarter.
Let me put on my MBA hat here. (And yes, I do have one. An MBA, I mean. I don’t actually have the hat. But, I’m thinking of getting one made.)
Harley’s real problem, however, is not the occasional tactical marketing error, but a more fundamental strategic error that the company keeps compounding.I’m kind of stunned that the MoCo would make such a mistake about the buying habits of their customers. Sportsters certainly have their fans, but general, people buy a Sportster because they want a Sportster. I can see how someone wanting a Softtail might settle for a Dyna, but not a Sportie. At least with the Dyna they still get the Big Twin engine. Surely the company must know that the Sportster is called the “baby Harley” and “girls bike”. They must have some inkling that salesmen at dealerships constantly advise prospective Sportster buyers that they’ll quickly outgrow the bike, and want a Dyna in a year or so, so why not buy a Dyna that you won’t outgrow instead?
People who want a Big Twin–and often they already have a Metric big twin they’re looking to trade off–aren’t interested in scaling down to a smaller motorcycle. They want one of the big dogs.
And as for the V-Rod…well, I don’t know what they were thinking when they thought they’d see an increase in sales there. It’s a nice bike but it certainly isn’t the company’s most popular product line. Not by a long shot.
It’s strange to see the company make such an unusual tactical error, and now the employees are gonna pay for it, as the MoCo cuts production to align inventory with customer demand.
Harley’s real problem, however, is not the occasional tactical marketing error, but a more fundamental strategic error that the company keeps compounding.
The brand is an absolute icon for the baby boomers. Among the Gen-X set and younger riders…well, not so much. The MoCo has a serious strategic problem when it comes to marketing, in that younger riders just aren’t attracted by the Harley brand. Harley obviously knows that their customers are aging, as evidenced by the fact that they’ve started producing factory trikes, so that their customers can keep riding long after the ability to hold up a 750 lb. hunk of steel fades away.
But Harley’s challenge isn’t to figure out how to keep an aging band of retirees buying their products, but rather how to entice younger riders to the brand. It’s clear that, looking at the advancing average age of H-D customers, they haven’t figured it out. Or rather, if they have, they’ve declined to implement the obvious solution.
To properly understand the problem, we need to look back at a bit of history.
If you were born in, say, 1980, Harley-Davidson has never been the Big Dog motorcycle.I was born in 1964, so that makes me the very last of the baby boomers. When we were growing up a “superbike”–the term didn’t really exist back then–was a Norton Commando 800. A Harley-Davidson was a massive motorcycle with an ungodly large 1200cc engine. You started riding motorcycles with a Montgomery-Wards 125cc thumper, maybe graduated to a BSA 500cc, then you finally got the money to get one of the Big Dogs, a Harley.
In the 70s, that all started to change. The Japanese began producing game-changing bikes like the Honda 750Four, and the Kawasaki Z-1. Performance increased dramatically. By 1984, when Yamaha introduced the frighteningly powerful (for the time) V-Max, real superbikes were available. The mid-80s explosion of Sportbikes, like the Kawasaki Ninja, raised the bar forever in terms of new motorcycle riders’ perceptions about what a powerful motorcycle was.
Harley’s response was, and continues to be, incremental increases in engine displacement from 1200cc air cooled twins to 1600cc air-cooled twins, along with incremental improvements to frames, suspension, and, thus handling. But the styling and riding characteristics of the company’s products remained mainly stuck in the 1950s-1960s.
Don’t believe me? OK. Compare and contrast the two bikes shown here.
Can you think of any other product where so little styling has changed in the past 44 years?
So, if you were born in, say, 1980, Harley-Davidson has never been the Big Dog motorcycle. It’s been a manufacturer of heavy, slow, low-performance cruisers. You’ve grown up in a world of 150+HP superbikes–a world that did not exist when the boomers were young. Younger riders have an entirely different mental impression of how the motorcycling world is put together.
To thrive as a company Harley needs a product that is connected to the modern era, as well as the past. That doesn’t mean that Harley should jettison its classic styling completely. There’ll always be a market for that, because it has a definite appeal to some riders. But to grab younger riders Harley-Davidson–as a company, not a specific brand–has to have something else. It has to have a line of motorcycles that appeals to those younger people who want more sport than cruiser.
And, interestingly enough, Harley already has that with Buell motorcycles. And does almost nothing with them.
First, until last year, the entire Buell line–except for the now-defunct Blast–was limited to cast-off Sportster Evolution engines. Erik Buell’s division tweaked them as well as they could be tweaked, but the XB series of bikes has never–and can never, from a technical point of view–compete with 600cc sportbikes like the Yamaha R6. And I simply can’t believe that an old privateer racer like Erik Buell is satisfied with the performance of the products he’s been allowed to put out by his masters in Milwaukee.
And, to make matters worse, Buell doesn’t even have its own dealership network. Instead, Buells are relegated to the dark corner of Harley-Davidson dealerships, and the sales staffs often know little about the brand…and care even less. I’ve personally had sales people intentionally steer me away from Buells, to point me in the direction of a Softtail or Road King.
H-D needs to move beyond the cruiser world if it wants to compete in the future. And that means letting Buell have some more leeway to operate beyond the Harley-Davidson cruiser world.
Companies survive by making products the public wishes to purchase. They don’t survive on tradition. They don’t survive on selling lifestyles.They need to break into the younger markets by producing bikes that can compete with the Gixxers and Ninjas. That means giving Buell the go-ahead to dump the Thunderstorm engine in favor of water-cooled twins and V-4 or I-4 engines. Buell has some fascinating design ideas for sportbikes, but one of the reasons they’ve never been accepted is that, performance-wise, Buells suck compared to the Japanese brands. Buell needs a powerplant to mate with their technical innovations. The 1125 is a good start. Now, they need to make the next step.
They need to liberate Buell from the H-D dealership network, and open up dealerships where Buell enthusiasts work. It doesn’t matter how good the bikes are if their sales network doesn’t want to sell them. Making the customers force the dealer to sell them a Buell is silly, and it needs to stop.
Harley also has MV Agusta, the venerable maker of Italian sportbikes, including the F4 312RR, the most powerful production motorcycle in the world, as well as its parent company, Cagiva. Maybe figuring out how to get those Italian brands over here would be helpful as well.
Companies survive by making products the public wishes to purchase. They don’t survive on tradition. They don’t survive on selling lifestyles. The reason the MoCo’s customer base is aging and shrinking is because they aren’t making products the younger generation wants to buy.
But Harley owns the brands, and has the capability to make the bikes that will attract the younger generation of buyers. It only remains to be seen if Harley will continue to rest on the laurels of the brand’s prestige, or if it will become determined to compete in the new markets that the Japanese currently own.
The mavens at Motorcyclist magazine have announced the winner of the award for 2009 Motorcycle of the Year, as well as their other picks.
The bike picking up the top award this year is the Yamaha YZF-R1.
Modern sportbikes are engineered so close to the edge of the performance envelope that we’re conditioned to expect incremental changes: a shaved pound here, an added pony there. It’s almost unimaginable that any sportbike could surprise us with a novel riding experience that realigns our understanding of what a liter-class sportbike is, and what one can do. The 2009 Yamaha YZF-R1 is exactly that sort of bike-which is why it’s our Motorcycle of the Year.
Other notable picks include:
Ben Spies as the Motorcyclist of the year.
The Kawasaki ZX-6R as the best sportbike of the year, closely followed by the Ducati 1198.
The Ducati Streetfighter as the Best Naked Bike, followed by the Harley Davidson XR1200 Sportster.
The Kawasaki Concours14 as the year’s Best Touring Bike, followed by the Harley Davidson Ultra Classic Electra Glide.
Best Adventure Bike honors go to two BMWs, with the F800GS in the top position, and the R1200GS Adventure in second place.
The Best Dreambike is the Aprilia RSV4, with the BMW S1000RR as the follow-on.
Best Bang For The Buck goes to Kawasaki, with the ER-6n as the winner, and KLX250SF as the second-place finisher.
For Best Cruiser, Motorcyclist goes strictly for muscle this year, with the Star (Yamaha) V-MAX ruling the roost, and the Harley Davidson V-Rod Muscle in the supporting position.
Best Dirtbike is the Husaberg FE450; second best is the Honda CRF450R.
Best New Technology is the Honda Combined ABS system, followed by the Ducati Traction Control.
And, finally, the Best New Product honors go to the Gopro Motorsports Hero Wide Camera, with the Bazzaz Performance Z-FI Traction Control taking the runner-up position.
The MoCo has released their 2010 model year line-up, and an expansive lineup it it is. For 2010, Harley-Davidson will carry 34 motorcycle models, including 9 new bikes. Below is a little taste of Milwaukee Goodness.
Laura Vecchio at Harley-Davidson wrote to me, to provide some of the MoCo’s talking points for the new models:
The Electra Glide® Ultra Limited model delivers the performance upgrade of a Twin Cam 103™ engine, and features standard equipment items previously offered only as accessories on regular-production Harley-Davidson Touring models.
The new Road Glide® Custom model looks lean and mean, with a slammed suspension, 18-inch front wheel and a new 2-into-1 exhaust system.
The Wide Glide® returns as an all-new Dyna® model done in old-school chopper style, with black laced wheels, a chopped rear fender, black “wire” sissy bar, 2-1-2 Tommy Gun exhaust and an optional flame paint scheme.
The new Street Glide® Trike brings stripped-down, hot-rod styling to the three-wheel category, and joins the Tri Glide™ Ultra Classic® in an all new Trike family for 2010.
The new Fat Boy® Lo presents a darker and lower interpretation of the motorcycle that still defines the fat-custom segment.
Updates to the 2010 Street Glide® model include a larger front wheel, slimmed-down exhaust, and a new tail light assembly.
Harley-Davidson Custom Vehicle Operations™ (CVO™) will offer four new limited-production models for 2010: the CVO Softail® Convertible, CVO Street Glide, CVO Ultra Classic® Electra Glide® and CVO Fat Bob®.
I like what Harley is doing for some of their paint schemes by breaking away from solid colors, and going with factory flame paint jobs. Very nice. I’m also really liking what HD has done with the Road Glide, giving it a lowered, meaner look.
Hopefully, Ms. Vecchio will be sending me some more pics of the new models, and I’ll post them here as I get them. In the meantime, HD’s 2010 model lineup page is here.
Unfortunately, no one at HD is talking about it, and no one at Buell has contacted me, but the new Buell line-up for 2010 is out, too. They are all up at the Buell web site. At first glance, I’m not seeing a lot of changes.
Other than the demise of the Buell Blast, of course.
I should have posted this earlier, but Chris Chornbe took a ride on the Harley XR1200 Sportster, and he gives a comprehensive report on the newest Sporty experience. He concludes:
This bike is best suited for those who want a Harley-Davidson branded motorcycle, yet also want a bike that is fast, handles well and is a real competitor for sport-oriented riders. It isn’t the best available in its class, but yeah… it’s serious and it’s well worth a look.
Given the non-adjustable suspension that is good enough but needs work for enthusiasts, the ride comfort, features and aftermarket support – if I had to buy a twin-powered naked, I would opt for the Buell (for similar money), or the smaller Ducati (for less money) and forego this bike, simply on price and its lack of better suspension. But hey… it’s a Harley! And that is not an insignificant point of fact. It ooozes Harley sexiness while still being something of a new breed. It’s a good bike. Period.
Read the whole thing.
Harley-Davidson has seen a lot of competition for the police bike market over the last few years, most notably from BMW, starting with the R1100RT-P to R1200RT-P. Honda has been making inroads on Harley’s market share, too.
Yakima, Washington is now is the latest police agency to dump the Harley bikes they’ve been riding, to switch to the Honda ST1300-P.
The California Highway Patrol’s dismissal of the HD bikes in favor of the R1100RT-P back in 1997 was the first major blow to harley’s dominance of this market in the US–although Kawasaki had made some inroads with the CHP with the Kawasaki 1000 Police Bike. And once the CHP made the switch, most other agencies went along with it too, either wholly or in part. And, since California tends to be a trendsetter in police operations, as in popular culture, that gave BMW a big and continuing boost with agencies all across the country.
It’s difficult to see how the MoCo reverses this trend with their current lineup of bikes. Police bikes generally have to do things that civilian bikes usually don’t. As Yakima PD spokesman Sgt. Gary Jones puts it:
“We have to be able to go over the curb, sidewalk ditches and [the] low ground clearance on Harley got hung up on breaking the stand kicks,” said Sgt. Jones.
Apparently, reliability was an issue to, as the (poorly written) story notes:
Riding more than 50,000 miles [per year], officers say, the Harley Davidson’s only lasted a few years and maintenance was costly. Agility is a top priority for the way police use motorcycles.
The trouble with Harley’s touring bikes, which are the generally used models for police purposes, is that they reflect design trends of 60 years ago. Now that’s something about which HD is proud, and it’s also a key selling point for their rider community. But that very design makes them, in the modern world, less suitable for police use when more up-to-date bikes are available, with their shorter wheelbases, higher ground clearance, lighter weight (not that the ST1300 is a lightweight bike by any means), and significantly better handling and performance.
The Buell division does make the Ulysess available in a police model, and that seems like a fine choice, especially for rural agencies, where dual-sport capability might be a positive point. But it’s not particularly well suited for a daily urban environment, sine the bike’s tall height is somewhat inconvenient for constant stop and go riding.
What HD does have going for it the tendency among some government agencies to buy American, but that’s solely a political, not technical decision. Having been a Harley owner, and having ridden the Sportster, Road King, and ElectraGlide, I’d take the R1200RT over those bikes any day if performance and handling ability are a major criterion.
It’s hard to see how the MoCo stays competitive in this market over the long term–except, of course, for the politics of “Buy American”.