Harley needs to make new metal, not old promisesAs the dust settles on Harley's Q1 2016 fiscals announcement, the meter is running for the all important MY2017 announcements that, at the time of writing, are only four months away.
If any clues were going to become evident from the expected mid-cycle new model introduction announcement(s), they're not good ones; January's Low Rider S and CVO Pro Street Breakout and April's Sportster Roadster don't appear to be "bad Harleys" as such, but neither are they the kind of quantum leap in platform terms that can lay the foundation for directions new.
There's nothing wrong with "parts bin" bikes as mid-term additions, especially if they are based on Harley CEO Matt Levatich's new-found plan to be demand responsive with short-term initiatives based on customer feedback.
No, that would be excellent - though it does raise the question "why wasn't it always thus"?
some 20 percent of Harley shares are owned overseas
The concern though is that the engineering mindset may still be focused on tinkering at the margins rather than making statements.
Maybe Harley is "keeping it modest" pending such a "great leap forward", but based on the lost time and opportunities of recent years, it has now become almost default to fear the worst. That is the problem with deliberately lowering expectations - sooner or later consumers will stop having any.
Especially in the context of a brave new marketing program that is pure Advertising Playbook 101 - identify your primary weakness and throw money at trying to persuade your target customers that vice is virtue.
In this case Harley is appearing to be saying that outdated metal is all we can make, so look at it as retro-cool rather than cutting-edge. Cut out the middle man, way wait 30 years for your "road-rich" story to mature like a fine wine when you can buy into being out of date straight away with one of our nice shiny new old bikes?
As a platform for then attempting to persuade new generations and audiences that the Bar 'n' Shield has an all new engineered-to-within-an-inch-of-its-life future-facing offer that understands how different your beard style is to the one that Grandad sported before the care home nurses shaved him, it doesn't auger well.
By the time Harley is ready to meet the riding expectations of the so-called "hipster" demographic, they'll have shaved off their beards and joined the golf club; the slew of righteous "New Gen" custom shows will have fallen under the spell of "the man", and Harley will be under foreign ownership. Think I'm kidding?
If Harley think that new paint, engine upgrades and a stock cup holder will cut it in August, then regardless of what the dealer network's public reaction will be following this year's dealer meeting, trust me - the investor community reaction will be way less charitable.
Matt Levatich's recent sangfroid about his 50 some percent market share making most of his competitors’ efforts fairly unlikely to dent Harley's hardcore market was shocking in its conceit - it reminded me, famously, of the record label A&R man who turned down the Beatles in 1961 because he reckoned "guitar bands are dead".
Harley are either playing a very, very clever game, in which case kudos, all hail the king etc., or sooner or later everybody will realize that the emperor's got no clothes ... plenty of paint, but a pretty threadbare wardrobe!
My remark about foreign ownership? Don't forget that according to some estimates, as many as 20 percent of Harley's shares are already owned overseas anyway. With international markets being where the real M&I capital is at this time, and where the real motorcycle use growth is to be found, including Harley's, just don't be surprised is all I'm saying.
While on the subject, another thing about Harley's multi-point marketing objectives has paradox stamped all over it.
Endeavouring to grow the sport is commendable, but in a country characterized by pretty much the lowest use of motorcycles per head of population of any of the world's developed markets, that is a task destined to drain the balance sheet long before it boosts it.
Besides, aren't we locked into some kind of a logic-loop here? Even if Harley can convert its marketing budget into demand for motorcycles, and secure an on-target half share of that demand, it means that for every bike it sells, it will sell one for somebody else.
Plus, if Harley had been selling that successfully, then there'd have been no need for a much expanded advertising blitz, would there? Harley need to concentrate on making new metal, not making old promises.
By way of a final "Marketing 101" lesson that clearly hasn't made its way to Milwaukee yet, it is the customer who decides on the values, pedigree and heritage of a brand, not a marketing department.
Unlike most other prior generations of consumers, the current digital-savvy, brand-savvy, generally a lot more savvy crop of (not entirely young any more) potential customers decide for themselves what's cool and what's not - the so called Millennials (and the Gen Y consumer too for that matter) make up his or her own mind about what they look, sound and play like.
To them the basic proposition that the definition of their life could be a mere credit application away and gets delivered to a store near you in a crate is gauche in the extreme. There is an inbuilt tension at play here, surely.
As a manufacturer we're going to be demand led and be more responsive to you as a consumer, but, by the way, here's $x m of marketing spend to tell you what we've got and what you should want 'cos "daddy knows best." Does anyone else think this new marketing program is superficial and patronizing, or is it just me?
