To fill its tank, Harley must diversify
American company embracing cultural shift due to Trump’s tariffs and aging customer base
The first thing you should do when you meet a Harley-Davidson rider is check the back of his — or her, but let’s be honest, it’s probably his — jacket. The patches tell you whom you’re dealing with.
First, there’s the insignia. It might be a bald eagle atop the company’s logo to let everyone know this is a Harley guy. Not a Honda guy, not a BMW guy, but a red-blooded, flag-waving American patriot. If this particular Harley guy belongs to one of 1,400 company sponsored Harley Owners Group (H.O.G.) chapters around the world, the insignia will be coupled with a second patch that specifies which H.O.G. he belongs to: the Duluth H.O.G.s, the Waco H.O.G.s. or, today, the H.O.G.s of Long Island.
“It’s a different mindset,” said Frank Pellegrino, who on weekdays is a vice-president for a plastics outsourcing company and on weekends a Long Island H.O.G.
Pellegrino got his first Harley for his 65th birthday last year and spends his summer Sundays exploring the back roads of New York and Connecticut with about 25 other Harley guys.
With him today are Joe, Marty, Dennis, Grover, Richie, Bob and his girlfriend Dawn and two Mikes, one with an American flag bandana tied around his head. No one is younger than 45; many are well past 60.
Harley-Davidson recently announced what executives called the most ambitious overhaul in its 115-year history with a plan that, for the first time in decades, wasn’t focused on riders like Frank or Dennis or the Mikes. In the next few years, Harley will release more than a dozen motorcycles, many of them small, lightweight, even electric.
The new Harleys are intended to reverse years of declining sales and appeal to a new rider: Young, urban, and not necessarily American.
Harley wants international riders to be half its business in the next 10 years.
“We are turning a page in the history of the company,” said chief executive Matthew Levatich. “We’re opening our arms to the next generation.”
The two-patch H.O.G. clubs that made the brand famous have saddled the company with an uninviting reputation that Harleys are only for older white men who roam the highways on rumbling, twowheeled beasts.
Young riders, women, people of colour or anyone who lives in a city and wants a motorcycle for commuting rather than joyrides — the bikers send the message that Harley isn’t for them.
And without new customers, the company can’t grow. Nor can it fully recover from the Great Recession. It’s shipping almost a third fewer motorcycles to its dealers than at its pre-recession peak in 2006. After rebounding slightly, retail sales have steadily declined again since 2014, tumbling almost 14 per cent in the U.S. The average Harley rider’s age has inched up to almost 50.
“It’s not just the brand, but the people associated with the brand,” said Heather Malenshek, Harley’s vice-president for global marketing. “We’ve made a tonal shift to think about ourselves as being more inclusive.”
Among motorcycle fans, Harley’s new image has been met with astonished enthusiasm.
“We looked at pictures of the new bikes and were like, ‘Harley did this? That’s pretty wild,’” said Zack Courts, features editor of Motorcyclist magazine. “From a practical perspective, riding a Harley doesn’t make sense. It’s heavy. It’s expensive. But when you talk to Harley people, they don’t talk about how the motorcycle performs. They talk about what it represents.”
In the U.S., motorcycles are generally used as leisure vehicles, costing from $5,000 to $45,000. Harleys average about $15,800.
The baby boomers that want them already have them and since the 2008 recession that price is something younger people — especially millennials, who’re now in their early 30s and should be getting into the hobby — are unwilling to pay. According to the Federal Reserve’s Survey of Consumer Finances, the average millennial household owes almost $15,000 in student loans. Throw in a mortgage, children and frozen purchasing power — it has barely budged for 40 years in the U.S. — and what was once a middle-class luxury is out of reach.
While ridership has declined in the U.S., it’s growing in Europe and Asia. People in crowded Asian cities are turning to small, lightweight motorcycles for daily transportation. According to the Pew Research Center, 80 per cent of households in Indonesia, Thailand and Vietnam own a motorcycle or scooter. Europe is similarly promising. Last year, Harley’s sales in Europe rose eight per cent.
Asian and European riders prefer smaller, leaner bikes, not the refrigerator-size monsters U.S. boomers ride. So Harley started making some. In 2014, it released a line of low-priced street bikes, its first completely new series in 13 years.
Harley is also testing ways to leverage its 115-year history without reminding people of its reputation for making grandpa bikes.
At its anniversary festival last weekend, the company hosted old-fashioned competitions, from “run what you brung” drag races to a 1910sera hill climb race up a ski slope. Its social-media campaigns highlighted washedout, filtered videos of vintage bikes and interviews with people who talk about what Harley means to them.