Born to be wild - that's what the Harley Davidson story has been, and the past few Seeking Alpha articles are reinforcing the notion as a company on the up and up. Alas, all the puffery in the world cannot hide the demographic time bomb facing Harley's image in addition to the 300 million in loans due to none other than Warren Buffet next month. This company is in serious trouble.
I am not a Harley hater - I speak as a former Harley Davidson owner. I bought mine through the PX while oveseas in Iraq in 2005. Harleys were always popular with Army Special Forces soldiers, being one of the stereotypical things every one of us bought with their re-enlistment bonus (that and a Rolex, and a pickup truck - but I digress). Upon returning stateside and being a bit unfamiliar with the Harley culture aside from common image, I went to Laconia Bike Week in New Hampshire in 2006 to see for myself what they were all about. The Harley owners I met, both then and now, are an honest, well meaning, decent bunch of guys - if a bit older. But at the time I was 39 and one of the younger riders present. That point was painfully emphasized upon noticing a table vendor pushing Viagra. Viagra? Um, yeah... ...so much for born to be wild. What's next, I thought - adult diapers? If Harley were selling Winnebagos, I might not be so worried - the average age for the motor home buyer is closer to 60 years old; but Harley's customer base is right behind them. Yet they sell something that's supposed to be a youthful product.
Let's face facts - the average age of a Harley buyer was 39 in 1990; it soared to 49 by 2000 - the same pig (hog?) moving through the python. Along the way they lost the young military market too - that generation much prefers sport bikes and trail riders to old fat man bikes. There, I said it. Harleys have become too associated with a group the young folks simply do not aspire to become part of, regardless of how the company continues to dress up the same hackneyed image and dated technology.
What's more, the other day I noticed a lottery scratch ticket for sale with the Harley logo and a picture of one of the fat man bikes on it. I'm not sure if Ducati ever does something similar over in Italy, but I suspect not. I damn sure have never seen a Ducati scratch ticket for sale here in the US. So, now we have a target market which is not only older, but less educated and financially foolish too (admit it - that's who buys lotto tickets - degenerate gamblers). This demographic is unfortunately borne out in the low credit ratings of their Harley Finance customers too, as they finance their bikes at close to 20% interest. Harley takes this spin even further with high margins on their gazillion accessories, most of which are made in China (to the surprise of many Harley owners) and not always of great quality.
Replacement mechanical parts are fluffed up with marketing BS too - example: a "Harley" spark plug for my bike cost $5.95, but that plug was actually a Champion branded with a Harley logo. The same model from Champion cost about $.60. To make matters worse, my experience with Harley dealers was always as if I were doing them a favor bringing my bike to them for service - whether the work was in or out of warranty. I got better treatment from the Honda dealer when I brought in my used Nighthawk for work - not that it needed it very often.
Ok, fine, maybe they make money licensing out their trademarks to state lotteries and fleecing their dwindling customer base with a cult-like brand, but where is the growth for the core product line? How will they attract new blood, this year and beyond? Though their bikes are generally well built and have come a long way since the days when their bikes were flat out unreliable, taking a look at their most recent product lines, I'm still not convinced that Harley gets it.
Harley ditched their only connection to the sport bike crowd when the sold Buell a few years back, and the V-Rod series only divide preferences among their mostly older white male demographic. Compounding any plans to tinker with their image is the growth of overseas markets - they built three dealerships in Mexico and an assembly plant in India. The "Born to be Wild image might still be a seller while it deflates at home - but is this enough to save the company and/or can they maintain two distinct markets: one riding on past successes and one totally dedicated to the future?
The plan is to forget pure sports bikes for now and offer the Street 500 and Street 750, hoping to capitalize a bit on the Cafe Racer trend and the retro feel in general. It's a good segment and price point (sub $10,000). Time will tell, but I'm not sure either of these bikes meets the mark in the way that say, the Honda CB1100 does, or the Triumph Bonneville, or the V7 Stone from Moto Guzzi. Why?
Old Triumphs, Hondas, Moto Guzzis, etc. and their modern reincarnations are, dare I say it - cool. Old Harleys unfortunately still involve fat old white guys at the dealership sneering at the Sportster 883 and calling it a chick bike. Meanwhile, I saw a lot of those Sportsters in Paris not only because of their lower MSRP and tariff, but they are a heck of a lot easier to park on crowded city streets than a big twin. So perhaps this new generation of liquid cooled retro-esque Harleys will find a niche in Europe, but if soft sales of the XR1200 are any indication, their marketing team still has work to do domestically.
Oh - what did I ever do with mine? Sold it in 2010 for about half what I paid for it - then I bought a used Ducati.