What s up guys! It s Jason here and welcome to my YouTube channel, Motorcycle Insight!
Are you ready for a roadtrip? Our exciting video today is a discussion about hogs. Before
you switch channels please know that it is not about the hogs found on an old McDonald's farm
that have a long snout or a squiggly tail or even the hogs that go oink oink. The hogs that we will
be highlighting are found on interstates, highways and roadways around the world.
If you guessed that our adventure focuses on Hogs that have two wheels, a clutch, gear system,
shiny chrome and allow the rider to straddle 150 horsepower or more and are manufactured by
Harley-Davidson USA, then you guessed correctly. This iconic and premier brand of motorcycle has
thrilled a multitude of generations, survived the Great Depression, helped to provide victory
in various war efforts, and starred in a number of adventure movies. Harley Davidson is one of
the most interesting and fascinating companies to me because the company faced a huge boom
followed by a bust where the brand was no longer relevant to millennials and the Gen Z audience
anymore with big expensive old school bikes. Even though the Company has been staging a huge
comeback in the past few years, stiff competition has been eating away like the rise of competitors
like Ducati and Chinese copycats and new technologies like EV bikes. Today we ll explore
the Rise and Fall of Harley Davidson and what will happen to Harley Davidson USA in 2022.
But before we begin, I need a quick favor from you. If you wouldn t mind just hitting that LIKE
button for the YouTube algorithm, I d appreciate it. As this is a brand-new channel I started this
year, it helps me out a ton and it allows me to continue to make great videos like this! Thanks
for doing that and now let us continue on with the why Harley Davidson is in trouble in 2022.
History of Harley Davidson Rather than re-create the wheel,
for the full history of Harley Davidson USA prior to the last five years, check out the
Company Man video on the Rise and Fall of Harley Davidson. This video, in following up to the
production provided by Company Man, will build on the history of this company, the spectacular role
that this iconic bike has played historically and address the concerns raised about the future.
In fact, two of the comments in the viewer's section shared humorous thoughts capturing
the future challenges faced by Harley Davidson and their aging customer base. One individual
suggested that Harley Davidson explore the production of motorized wheelchairs
with another suggesting that meetings of Harley riders resembles an AARP meeting.
A lot of people have very strong opinions and views on the brand.
[Kev, pls read comments below]
Keeping the Motor Running Finances It is safe to say that Harley Davidson
has traditionally been the king of the road amongst motorcycle enthusiasts,
leathered and non-leathered bikers, and leaving its competitors eating Harley's dust.
However, like most global companies, the last 2 to 3 years have reflected business navigational
road hazards. This challenge has been due to the world's economic environment, the surging
Chinese economy and the economic strategies that nations have taken to compete financially
against the Chinese financial powerhouse. Add into the mix the global pandemic that is still having
repercussions on a number of business and you have a "perfect storm" that has negatively howled
against national, global and local businesses. Despite Harley-Davidson's reputation
as the gold standard for motorcycles, they have not been immune from the detours and potholes
of the economic road that they travel on. From the years 2017 to the current financial climate,
sales have suffered and consequently so have the profits and their stock price until March
2020 falling from $60 a share to $15. Ouch. [Show 5 year graph https://yhoo.it/3ptaERA ]
Like the open highway of peaks and valleys, revenue for this motorcycle business machine
has seen a decrease in revenue over fiscal years 2018 to 2020. This decline reflected
income of roughly $5.7 billion in 2018 to annual revenue of $4 billion in 2020.
The bottom line is that Harley Davidson USA experienced a 29% decline in revenue over the
last three fiscal years. The largest deficit difference in income earned over the previous
year was 2020 reflecting a 24% decline. Obviously, like a slow leak in a tire,
the company can't continue to realize this sort of sales decline year after year.
Staying Between the Lines. What happened? In order to arrive safely on the commerce roadway
it is important to stay between the income and expenditure lines marked on the business roadway.
Harley Davidson is endeavoring to navigate between the lines and not going off the road.
Harley Davidson needed to stop the oil leak of losing their place in
the market share of motorcycle sales. In order to do this Harley needed to sell
their motorized product and endeavor to get more Harley's on the road. In 2018,
there were a total of 228k bikes sold, in 2019 there were a total of 218k bikes sold and in 2020
sales reflected the selling of 180k bikes. Out of all of the market places that Harley
Davidson motorcycles are sold, the only "shiny chrome" highlight was in the Asia Pacific Market
with bike sales of 28k in 2018, sales totaling 29k in 2019, and 27k bikes sold in 2020.
The other markets of the United States, Canada, Europe, and Latin America, were in decline.
Competition for Harley Davidson. Electric Bikes.
The Company was facing huge competition from competitors that didn t even exist in the market
before. Competitors that appealed to the younger generations with new and innovative products.
Take for example, Can-Am On-Road. With bikes starting at just $9k
going up to $24k, they cost only the fraction of a Harley with innovative Y
shaped designs with 3 wheels that make learning to ride a piece of cake!
Niu electric mopeds, with both the Revel and Lime were simple electric scooters and e-mopeds that
are cost efficient and easy to use for the city while other companies like Zero Motorcycles were
capturing the performance category with innovative electric motorcycles like the Zero SR.
Of somewhat of a concern for Harley-Davidson USA was that their market share for customers
purchasing motorcycles in 2018 dipped slightly below 50% and settled in at 49.7% of the market in
motorcycle sales. Like the revving of the powerful Harley engine turning the heads of others, this
prompted leadership with the company to implement a new and engaging marketing strategy.
In response to the challenge of an aging customer base and endeavoring to engage younger riders
into the world of riding a Harley, the company inaugurated a marketing plan called "More Roads
to Harley-Davidson." Under the aggressive and bold plan to put more Harley's on the road the
four year plan was launched in 2018. By year's end of 2022, the goal was to have 4 million
riders which reflected the adding of 1 million riders to the already established 3 million.
Their dual focus, like their dual exhaust systems, was not only focused on building
quality bikes but now building riders as well. As a result of this concerted marketing effort,
they were able to net 52,000 new riders to the Hog. In 2018, in the United States, 527,000
riders joined the chopper fleet and brought the grand total to 3.5 million riders in 2019.
Shift in Harley Davidson Demographics and Covid Impact
The specifics of the road map included marketing the appeal of Harley-Davidson motorcycling,
focusing on Generation Z, working more closely in partnership with the dealerships,
provide attention to growth overseas and make the actual experience of the ride more appealing.
This would be accomplished by strengthening the various biker communities that have a
love relationship with their bike. When the pandemic hit, surprisingly,
it was a boom for the company as more and more Americans were looking for outdoor adventures.
During this time, the company brought in a new CEO, Jochen Zeitz, who previously ran
Puma the athletic company and Kering the luxury group of Gucci, Bottega Veneta and the likes.
This really transformed the company and turned the ship around.
The Road Ahead for 2022. The Pan America.
So how is Harley Davidson doing now in 2021 and 2022? The other added focus of shifting gears
to make the riding of a Harley more appealing was the introduction of versatile middleweight,
smaller motorcycles and electric bikes. This push of manufacturing smaller and more
personal motorcycles aimed at attracting new customers with several models was launched in
2021. Also, Harley is introducing into the market place electric
bicycles with aggressive expansion plans. So what is the most popular motorcycle 2021?
Under the new leadership of CEO Jochen Zeitz, the Pan-America Harley-Davidson model has
been introduced. This bike, a complete riding adventure on wheels, is known as an adventure
touring bike or dual sport bike or ADV (abbreviation for adventure) bike.
It is street legal but also can be ridden off road and is designed for long distance journeys,
has the capacity to carry luggage, and everything needed for maximum self-sufficiency far away from
paved superhighways. The Pan-America features a whole new engine, a 150 hp liquid cooled V twin
known as the revolution max motor. This new bike is a sequel to the electric motorbike that was
manufactured by Harley through the introduction of the Live Wire, an all electric Harley-Davidson,
which was introduced to the media in 2014 and released to customers in September 2019.
In Q3 2021, Harley announed that the Pan America was the No. 1 selling adventure touring model
in the U.S. since its launch, making it a huge success. It also just released the Sportster S,
another motorcycle with a sticker price under $20,000. Goetter said "we have seen very strong
sell-through" on the new model, though with an introduction at the very end of third quarter,
full-quarter metrics on Sportster S sales aren't yet available.
So after a very tumultuous journey, Harley Davidson is still on the road
shaking off years of decline. The engine of the company continues to be productive, the wheels of
strategies to be competitive are still turning and gears are shifting to be innovative and relevant.
It wouldn't be an Easy Ride(r) but Harley Davidson has the product, the brand and seemingly the power
to move forward in 2022 and beyond. Personally, I have a lot of respect for
Harley Davidson. The brand has a strong history that s been through adapting through the decades
through different culture shifts and times. Let me know what you think of Harley Davidson in the
comments below. Do you think they can keep up the comeback in 2022? Thank you so much for watching
my video. There was a significant amount of research, production and motorcycle riding
that went into making this video possible. If you enjoy videos like this, please click the subscribe
button and hit that notification bell! The more subscribers we get the better and the more content
I can continue making. Have you seen my video on the Kmart s comeback in 2022? How about the
Rise and Fall and future of Blockbuster Video. That one s my personal favorite. As always,
stay happy and healthy and stay tuned for another episode of Company Insight next week.