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Monday 17 August 2020

Comment by Editor-in-Chief, Robin Bradley

Goodbye Bronx - Or Is It Au Revoir?

No real surprises in Harley-Davidson's Q2 results - the market is down (for obvious as well as ongoing reasons), Harley can't sell enough bikes, in Q2 couldn't make any either, and the Profit & Loss statement makes you want to cry.

There is only one real surprise in newly minted CEO Jochen Zeitz' latest batch of insights into the upcoming 'Rewind' five-year strategic plan. Apparently, flesh will be added to the bones at the end of the year, but meanwhile we know enough to be optimistic, but not enough to be excited.
In practical terms, the headline news is of a 30% reduction in available model variants - there have been too many Tourers, Softails and Sportsters for years, but not enough platform diversity.
Leaving aside the Street, there are basically two engine families - Sportster and M-8 - but rather than outreach, Harley has been the master of introspection in recent years. It has been locked into a circle dance of Touring and Softail navel contemplation.
The good news is that Harley will go ahead with the 60-degree V-twin for the 1,250 cc Pan America Adventure Tourer for MY2021, but the 975 cc iteration for the Bronx Streetfighter is, at best, on the back burner for the foreseeable future. That is the one and only real surprise.
I'm not going to rush to the defence of the Bronx, as unveiled so far, as a thing of beauty that will have Ducati running scared, it isn't, and it wouldn't have been.
Neither am I unrealistic about the relative business opportunities that the two sectors - Streetfighters and Adventure Tourers - represent for a company such as Harley, especially given the largely rural and suburban spread of the existing (though soon to be shrunk) dealer network.
The fact is that Adventure Tourers are selling well and Streetfighters never really have done - they have always been a niche bike ever since they first appeared in Germany and the UK in the early 1990s - and there's another clue, they aren't exactly a contemporary concept.

Adventure Tourers are Pure Americana

Then again, as the original rutted cart track, hill climbing bike style of the earliest years of 'American motorcycling', it could be said that Adventure Tourers aren't exactly 'Rad' either - but if a company like BMW can sell zillions of them (there's not exactly a lot of Atacama Desert in Bavaria!), then in a market where more than 50 percent of the land isn't developed at all (no urban development, no agriculture, no gas stations), then if that isn't a domestic business opportunity for a domestic made motorcycle that is designed for domestic riding, then what is?
So there is compelling short to medium term business sense to Zeitz' plans (and goodness knows, the Harley balance sheet is going to need some of that!) and the more so since, as it happens, downtown is as much their native habitat as off-road - they're not called Dual Sports for nothing. Anything up to 80 percent of the miles done on Adventure Tourers are in fact urban and suburban, whereas Streetfighters are a ticket magnet on the open road, a liability in traffic and need twisties.
In many ways, Streetfighters are as idiosyncratically European as, in reality, Adventure Tourers are pure Americana - go anywhere, good at everything muscle. That said, Streetfighters do have demographics on their side, especially in the context of Harley and the need to bring new entrants into the tribe.
So far Zeitz has proven to be an interesting paradox. In corporate terms, he is the ultimate Renaissance 21st century man. Yet, so far, he is also proving that he is just as capable of being cognizant of legacy and the core customer, as one would think he would be of 'outreach', and the eternal search for 'fresh fish'.
And, with being a man with an international perspective, one would have thought he'd have been all over the Bronx. The one thing, hopefully, that he will be all over, needs to be displacements of the new, modular Revolution Max engine.
Paradoxically, his decision to press ahead with the Pan America, but stall the Bronx, means Harley is going to be continuing to major on large displacement machines at a time when middleweights and lightweights are the 'choix du jour'.
Lightweights are generally defined as being in the 200 to 500/550 cc bracket, with middleweights coming in at around 600/650 cc, up to around 975 cc - which is where the first iteration of Harley's middleweight, the Bronx, was going to live. Generally speaking, heavyweights are regarded as starting as soon as you get into four figures.
If Zeitz' game plan is to husband resources and focus on one new 'fresh fish' at a time, but has up his sleeve multiple displacements of Pan America quite quickly, then kudos.
Yamaha, Triumph, Honda and BMW have found that the future of the Adventure Tourer is as much on highway as off, especially downtown. They have already been going down the route of lower displacement Africa Twins, Ténéré, GS and Tigers, all having initially flooded their dealers' showroom traffic with big brothers.
Being discretely hidden away and socially distanced in the forests of Eastern England hasn't stopped our being able to hear the jungle drums or see the smoke signals, and we have been hearing that the Revolution Max will come in four exciting new flavors - the 1,250 and the 975 we all know about already, but 750 and 500 cc iterations have also been planned, or at least muted.
Does Zeitz' 'Rewind' involve multiple flavors of Adventure Tourers eventually, and an improved, lighter weight, more contemporary chassis for the Bronx once the engines have proved themselves in the Pan America? Such a long-term strategy would be more practical than the one tried for with 'More Roads' - especially if it meant that Harley could also renew the Sportster engine platform (overdue) and dump the Street, even if Australians can't get enough of them!
Finally, we are hearing that Harley's Indian manufacturing and Brazil CKD facilities will be toast, but that it might be stuck with the China deal.