Harley Davidson, the Milwaukee motorcycle maker, has restarted its factories in Wisconsin and Pennsylvania but will make only its most popular models for the rest of this year and offer only a limited range of options.
It also has told about 70 percent of its 698 dealers they will not receive any new bikes from the company this year. Harley is restricting its production volume to “drive exclusivity,” the company says, hoping to appeal to people who desire hard-to-get products.
Harley also is revamping its product line.
Former CEO Matt Levatich had set about creating a future for the company based on a wide range of newer, cheaper models meant for millennials, women, and especially foreign markets.
With the company in decline, as we have been noting in the Trends Journal, Levatich was forced out of in February and replaced by Jochen Zeitz, a long-time board member and former CEO of Puma, the German athletic-apparel company, who said the expanded product line made factories too complex and drew the company’s attention away from its most profitable models.
The strategy is squeezing retail dealers, most of whom have been closed for several weeks.
Some will be unable to fill waiting orders or will be forced to do so by buying bikes from other dealers at inflated prices.
Dealers also are hoping to acquire used Harleys to sell. The price of used Harley cycles has risen about 20 percent since March.
Harley Davidson’s stock price rose 7.3 percent on 20 May after news of the reopening was announced.
TREND FORECAST: Harley’s new strategy is to make bikes that will appeal to higher-end customers who will pay for premium brand levels: “Our strategy to limit motorcycle products in the showroom is purposefully designed to drive exclusivity,” said the company’s director of product sales.
The market sector they are targeting, aging boomers, is dying and going broke. Had Harley moved forward with the previous plan of making cheaper bikes to appeal to broader, lower income consumers across the globe – with updated performance levels and styles – they would have been on-trend.
