Tag Archives: Breakout

Harley-Davidson to axe 30% of models

Harley-Davidson will axe 30% of its models and the introduction of the 2021 range and new models moved from September to early next year.

Shiny new Harley-Davidson models for the year ahead usually start appearing on showroom floors across the world in September and October.

However, production has been slowed and new models delayed until early next year as part of a Rewire strategy for the company under new CEO Jochen Zeitz.

In announcing a poor sales and profit performance for the second quarter, Jochen says they have “reset” their product portfolio and launches of new models to coincide with the start of the Northern Hemisphere riding season in the New Year.

“We’re streamlining our motorcycle models by approximately 30%, with plans to further refine our product portfolio,” he says.

“This enables us to invest in the products and platforms that matter the most, while better balancing our investment in new high potential segments.”

Axe falls

Harley-Davidson Softail Deluxe modern
Softail Deluxe

That could mean several underperforming models will face the axe.

In May, American website Total Motorcycle claimed the manufacturer’s list of 2021 models would axe the FXDR 114 (pictured top of page), Breakout 114 and Softail Deluxe. They also said there were rumours all CVOs would face the axe for 2021.

Their list included the recently delayed Pan America 1250 adventure bike and the Bronx Streetfighter 975, plus a Softail Custom and a Sportster Streetfighter.

Harley Revolution Max platform includes Pan America and Bronx Streetfighter axe
Harley Revolution Max platform includes Pan America and Bronx Streetfighter

However, Jochen only mentioned the Pan America, the company’s first adventure motorcycle.

That could mean the Streetfighter range, which also uses the new liquid-cooled Revolution Max engine may be shelved for a while.

“We see strong potential in adventure touring and will launch Pan America globally next year,” he says.

“We will be going to market with an improved launch process. Beginning with model year 2021, we will shift our product launch and dealer reveal timing into early Q1, driving demand for products and sales for dealers at the start of the riding season.”

Traditional fans

But Harley isn’t turning its back on traditional Harley fans.

Jochen says they will “expand our offering of iconic motorcycles to those which most embody their spirit of Harley-Davidson”.

However, those fans will have to wait for the 2021 models to arrive.

“As we transition this year, we have extended our 2020 model year production through fall and expect model year 2021 bikes will arrive in dealer showrooms early in the New Year.

“We will invest into the new go-to-market capabilities and elevated product launches and investment into our brand using some of The Rewire savings.”

But don’t expect big discounts as we have seen in the past couple of years.

Jochen says they have scaled back production. To make bikes more “exclusive” and “significantly” reduce discounting price promotions.

“This drives retail pricing to help preserve the value and desirability of Harley-Davidson motorcycles for its customers and brand,” he says.

Merchandise

The new boss is also driving up the merchandise, parts and accessories side of the business.

He says they will push parts and accessories sales at dealerships by promoting customisation.

The company also hopes to attract new customers through investing in new technology for their apparel range.

Source: MotorbikeWriter.com

Harley-Davidson and Indian sales flop

America’s two major motorcycle companies have reported a flop in motorcycle sales for the second quarter.

Harley-Davidson reported a 27% decline in sales to 52,700 and a $0.87 billion flop in revenue.

Sales were down 26.6% in the USA, -30.3% in Canada, -29.8% in Europe, -51% and Asia-Pacific -10.2%. The latter includes Australia where sales were down 10.7%.

Meanwhile, Polaris Industries says motorcycle sales (which includes Indian Motorcycle and the three-wheeler Slingshot) were down $141.3m or -28% with profit down from $23m in the same quarter last year to $4m.

In Australia, sales were up an impressive 40.2% while the road bike market was down 4.2%.

Flop turnaround

Both companies report a turnaround in sales in June as riders came out of lockdown keen to hit the road.

Polaris CEO Scott Wine says they overcame a “near complete shutdown of both our dealers and the US economy early in the quarter to capitalise on unprecedented retail demand for our off-road vehicles and motorcycles through May, June and now July”.

He says the new liquid-cooled Challenger model helped buoy sales.

Indian Challenger flop
Challenger

Both companies shut down production for about a month and inventory is now scarce.

However, Polaris plans to ramp up production while Harley has notably decided to keep a lid on production to make their bikes more exclusive and to avoid discounting.

Harley strategies

Jochen Zeitz with LiveWire rewire shares
Jochen Zeitz with the electric LiveWire

With Harley experiencing a sales flop in the first half of the year of -28% from 121,00 to 93,200, CEO Jochen Zeitz has outlined a streamlining of production as part of his Rewire strategy.

The five main strategies are:

  1. Reorganisation of the company structure and a new marketing strategy toward freedom, led by Hollywood action star and Harley fan Jason Momoa;
  2. Cuts in model lines and 2021 models delayed from September to early 2021 (click here to read more);
  3. More emphasis on merchandise and bike accessories;
  4. Pulling out of some international markets (click here to read more); and
  5. Cutbacks on production to promote exclusivity and avoid discounting.

“A total rewire is necessary to make Harley-Davidson a high-performance company,” Jochen says.

“Building on our strong brand legacy, we are reinvigorating our core profit driving business – powered by our strongest dealers, most exciting products and careful inventory management, while focusing on the most important opportunities for future expansion.”

He says the company will build on their “strong brand legacy” with a shift in marketing to “the brand, heritage and great product”.

“The first brand building approach will be shown in the social media campaign directed by Jason Momoa, celebrating the shared journey and unrelenting spirit of our Harley-Davidson Community during these challenging times, and strengthening the positivity and freedom we all find in riding motorcycles,” he says.

Source: MotorbikeWriter.com