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Tuesday 10 September 2019

Comment by Editor-in-Chief, Robin Bradley

H-D MY 2020 - More in Hope than Expectation?

So, after five years of being pregnant, Harley-Davidson has finally given birth to the LiveWire and the first of its 'More Roads' new products have come to market.
Right now, the first dealer deliveries have been made (actually some dealers got demonstrators up to a couple of months earlier than the MY 2020 new model announcement on August 20th, the first day of this year's annual dealer convention), and some (hopefully) satisfied customers will already be adjusting to "life in the quiet lane."
This time next year the initial response to the LiveWire will have passed and there'll either be wait lists, satisfied riders, dealers and investors, or not, as the next stages in Harley's strategic plan start to hit showroom floors - either the 975 cc streetfighter and custom cruiser style 'middleweights' (if 975 cc can truly be regarded as a middleweight displacement - internationally it isn't) or Harley's first foray into the BMW territory that are Adventure Tourers with the 'Pan America'.
The press has been very complimentary about the LiveWire, but then they haven't been asked to shell out the thick end of $30k for a bike whose primary competitors are at best two thirds of that price and which, almost universally, have way better charging ranges and times.

I will happily eat my words

That it looks the part and that it is 'brand faithful' isn't in dispute - LiveWire proudly wears the Harley styling DNA and, initially at least, the price will get the first few thousand owners bragging rights commensurate with the badge.
Whether or not it will get them to their nearest dealerships or places of work without abruptly stopping and requiring considerable charging time is another matter.
My primary worry still revolves around price, of course, and the size of the available market - as basically there isn't anything to speak of yet - not even in Europe, where the market is probably at least a decade ahead in terms of acceptance of the desirability and inevitability of alternative powered platforms.
The latest available market statistics to come out of ACEM - the Brussels based international motorcycle industry trade association that acts as the "headmaster's study" for all of Europe's national trade associations and Europe's motorcycle manufacturers and import subsidiaries - do not make for pretty reading.
In a market (the currently still 28 EU member states) where the demand for conventionally powered (ICE/Internal Combustion Engine only) motorcycles (theoretically) grew by +8.2% for the first six months of 2019 (compared to the first six months of 2018) to 612,690 units, the sales of electric motorcycles only amounted to 5,812 units.
Sure, the growth rate in percentage terms is impressive at +82.6%, but on such low volumes that is pretty meaningless - it hardly yet constitutes a trend.
On top of the motorcycles there were also 28,577 electric powered mopeds sold in the first six months of 2019 (an equally impressive +73.6%), but if Europe has only been worth in the region of 35,000 electrically powered PTWs (Powered Two-Wheelers) in the peak selling months of 2019 so far, then how small is the $30k opportunity for Harley on either side of the Atlantic?
Of course, everyone wishes them well with LiveWire, we've all got skin in this game one way or another, and maybe I will be eating my words a year from now.
Maybe, just maybe, the cache of the brand, the novelty value, the power of being the first of the ICE majors to venture into these waters in the U.S market will create demand for all where not much existed before. I do hope so. Alternatively, they may go the way of many 19th century American pioneers - face down in the dirt with arrows in their back as others with better products, better timing and better pricing race past the LiveWire corpse.
Despite having the tech to make a play for the E-bike market, five years ago Polaris CEO Scott Wine state that he found it difficult to see how any ICE motorcycle manufacturer could make money from electrification at that stage, and not enough has yet changed in the time since to make a different call.
I'm an eternal optimist, so for now I am saying a great big fat "hurrah!" and looking forward to being 100 percent wrong. I just wish Harley had adopted plans like this, all the 'More Roads' plans, some five years earlier. If LiveWire isn't the silver bullet they need, then they will remain in serious danger of running out of road.
Interestingly, the share price, which had again been plumbing new depths in contemporary terms throughout most of July and August, barely twitched in response to the announcement. Usually the new MY announcement at least results in a short-term bounce, even if the reality of the hedge bets quickly drags it back to reality. Not this year though. No heartbeat at all. Zip. Zero. Nada.
At 09:30 on the day of the announcement HOG was trading at around $32.34; by 15:45 it was down at $31.86, having been as low as $31.70.
Elsewhere in the model range announcement the increasing pace at which Harley is embracing and deploying technology is to be welcomed. That said, even here they are playing catch-up with some of the initiatives that Indian has had in play for a couple of years and that many other manufacturers, especially the Europeans, have had on their models or on the drawing board for anything up to a decade. Do manufacturers still have drawing boards?