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Tuesday 14 January 2020

Comment by Editor-in-Chief, Robin Bradley

Can Harley Do It?

With two new mid-cycle models due to be unveiled by Harley in early 2020 - a CVO Road Glide and a Softail Standard - this year will be dominated by the August MY2021 introduction of Harley's all new liquid/air-cooled 60-degree 'Revolution Max' engine and the 1,100 cc Pan America ADV and 975 cc Bronx Streetfighter it will power.
The rumors are that with the new platform taking center stage, changes to the 'core' range most probably will be limited to paint jobs and accessory upgrades - especially connectivity and 'infotainmant' as Harley continues to track the creature comfort advances that have been made by other manufacturers.
The 'Pan America' and (what we now know to be) the 'Bronx' Streetfighter were among the initiatives outlined in the 'More Roads to Harley-Davidson' strategic plan unveiled in the summer of 2018 - and unveiled for the first time in public at EICMA and then Long Beach in November.
Other highlights on the Harley 'More Roads' wish list included a continuation of its determination to invest in growing more riders through its rider training academy program, and continuation of the revolution in the structure of its dealer network (in the United States especially) with 'old school' brand-passionate Harley dealers being replaced by dealer groups and, as we discovered in 2019, private equity backed dealer group ownerships.
In 2019 the major stubbed toe in Milwaukee centered on the stillborn appointment of its first ever Global Brand President - a significant tuning of Harley's leadership structure - and an appointment that is rumored to have had as much to do with lining up a replacement for CEO Matt Levatich (should he decide to press the retirement option button in 2020) as it did to trying to rebuild Harley's shambolic marketing programs and structure.

"strong platform in Europe"

The plan had been to bring one central executive to the senior decision-making table with overall responsibility for coordination of brand management and development - a much needed and decades overdue move.
However, the appointment didn't work out, and to be fair to Harley, the rumors are that the "toe stubbing" apparently had as much to do with the peccadilloes of the appointee as it did with being a fundamental HR failure by Harley themselves. Not that I am one to throw stones in that particular glass house!
In principle, the plan to appoint a single board level manager with overall marketing responsibility to coordinate programs and "evolve the brand to support the company's strategy" makes perfect sense, even if it does beg the question 'why wasn't it always thus'?
Harley's statement at the time of the appointment went on to say that "as the company expands into new segments and new geographies and seeks to inspire diverse, new riders around the globe, the Global Brand President will be responsible for all aspects of the Harley-Davidson brand including product planning, marketing, retail, apparel and communications."
At the time of the announcement, I worried that although I see "marketing" as such as being a primary weakness at Harley-Davidson, no way should marketeers be allowed anywhere near engineering decision-making or productionization. That way madness lies!
However, being able to coordinate the planning of what needs to be engineered and produced with the available business opportunities is fundamental to any manufacturer's game plan.
In the 1990s, when Harley canned the still much loved FXR just at the time when streetfighters were the 'new black', it was patently obvious that the ever growing retail price-points of the Tourers and Softails would ultimately lead to a disconnect between Harley and market opportunity as its traditional 'Boomer' core customers aged out.
While I have every sympathy with a corporation that wants to preserve its perceived brand value and MRSP policy in order to make more from less (a perfectly valid and laudable business objective), it was inevitable that the schism between the demographic that could move up the price elevator with Harley and the unit volume opportunities in the future motorcycle industry were going to bite them.
Meanwhile, one of the other 'More Roads' strategic objectives does look like it could be somewhat of a salvation - namely the plan to aggressively grow demand for Bar 'n Shield badged PTW product outside the United States to around 50 percent of production by the middle of this new decade. Coincidentally an ambition echoed by Indian Motorcycle at around the same time that Harley broke cover on its plan.
Although Harley-Davidson sales internationally haven't been as strong in 2019 as might have been hoped, especially in the all-important European markets, compared to a decade ago, Harley is nonetheless in a massively enhanced position, both in national market share and unit sales terms in many of the most important international markets.
The fact that a decision that saw Harley embrace the 60-degree V-twin combi-cooled layout in a marriage of engineering with product planning some two or three years before announcing a Global Brand President, shows that Harley can do it, namely bring market opportunities and engineering and production planning together.
Even if the softer numbers in the U.S. market lower the bar of achieving 50 percent of production to be sold internationally, the currently robust European market (in particular) can prove to be a life- saving platform for Milwaukee if they continue to refine the start-point and can do better in price-point terms there.