Tuesday, September 05, 2006

Paint Yourself Into A Corner

I've got a few friends who ride Harleys and, although I'm not a big fan of the marque, I do admire how HD has gone from near bankruptcy under AMF's lead in the early eighties to being über-profitable thanks in large part to Willie G. and Vaughn Beals. The quality has gone up, as have the prices (exponentially so). And of course, people are still lining up to get a Hog; but not as much as they were a few years ago. The big-4 Japanese manufacturers are coming out with bikes designed to steal HD's thunder: Yamaha's Roadliner is more powerful yet lighter than most of HD's offerings, Kawasaki shook everybody's boots with the massive 2-litre V-Twin in their Vulcan 2000, and now even Suzuki who has been lacking in the cruiser department has come out with the M109, a rather modern looking machine with plenty of power to slap many a' Hog's bottom.

The biggest problem I can foresee for poor old HD is how to evolve without losing its fanbase. Sure, the whole VRSC series is new; but then again the feedback from hardcore dyed-in-the-wool HD aficionados was anything but pleasant when it first came out. Many were dismayed that the Harley badge would be afixed to a water-cooled 60-degree V-Twin engine that was designed in large part by Porsche - a german company. However, marketing got the best of everybody and the V-Rod and its various offspring are selling rather nicely.

But what if the design team at HD wants to go further? I'm sure that there are sketches of more modern looking bikes in the desk drawers at HD, and I wouldn't be so quick to blame Willie G. for holding them back. In essence, Harley has created a monster that they can't seem to overcome: their own customers. A big chunk of HD's clientèle are the recently retired baby boomers who either had a bike "before", or have always dreamed of getting one. Check out any Harley advertisement and it's rather obvious who they're aiming for. It's the American Dream: freedom of the open road, no rules, no schedule... Essentially, pure unadulterated fun - exactly what the doctor ordered after a lifetime of sitting behind a desk.

But the boomers aren't dreaming of Ninjas or Gixxers - they want the bike that stirred their souls when they were kids, and the only brand still available is Harley Davidson. And wouldn't you know it; they're still producing practically the same bikes that were cool back when Dad still had hair. Take the money you've been saving for a rainy day and buy one off the showroom floor; then show your individuality by customizing it with accessories from the official HD catalog (the same catalog that all your other HD friends are buying from).

So what happens to the younger crowd, generation x'ers like me: thirty-something DINKs (Dual-Income, No Kids) that don't buy into the melancholy marketing because we simply weren't born back then and couldn't give a damn about Captain America. That's your generation Pops, not mine. There's money in our pockets and we're looking to spend it, but HD doesn't have the product. We simply go to whatever else is out there; be it Japanese, Italian, Deutshe or British. Even ancient manufacturers like Triumph have managed to keep one foot in the past to keep the traditionalists happy (ex. Bonneville), while looking towards the future with more modern machines for the younger crowd (ex. Daytona 675) - and they've still managed to retain their identity in the process.

So how does Harley break out of the paradigm? Well, Buell is a step in the right direction. HD found an ingenious young motorcycle designer and partnered with him (i.e. more or less bought 'em out) to start producing sportbikes. There is one broken tooth in the cog though; it's a given that Erik Buell's designs are truly original and forward thinking in many aspects, but the heart and soul of these bikes, namely the engine, is simply out of the tired old Sportster's parts bin. The "Evolution" V-Twin is not exactly what I'd call cutting-edge technology, which would explain why most Buells will get left in the dust when up against Japan and Italy's finest.

So maybe the movers and shakers at HD should take it one step further and start yet another spinoff brand. A hypothetical name could be "Freedom Motorcycles" or maybe "Liberty Bikes", I mean just about any word judged to be patriotic could do the trick - no matter. They could distance themselves a bit more from this sub-brand, and the advantage to this duality would be two-fold. On one hand, they could pull in a younger demographic who never would've considered getting an HD, and on the other hand this would prevent upsetting the more traditional crowd. Maybe then they could start producing bikes that would really compete with what the rest of the world is offering right now. How about designing a small V6 engine to power a sportsbike? Think it sounds crazy? Well, maybe you remember Mazda's 1.8 litre V6. French custom bike builder Ludovic Lazareth built a frame around it and turned it into something special. Heck, I'm sure the same engine would be easy to fit into a true luxury touring bike to compete with the Goldwing and K1200LT. Or maybe they could design a smaller V3 to fit in some naked bikes. They could stick in some technology that the older generation wouldn't consider kosher; stuff like ABS, variable valve timing, shaft drives, and the list goes on... Whatever - the slate is clean. They just wouldn't have to concentrate on cruisers anymore; they've already got that segment covered.

Anyhow, I'm just thinking out loud... Maybe somebody over at Harley Davidson headquarters in Milwaukee will come across this blog and it'll spark a few ideas? Here's to hoping that the spark catches!

5 comments:

James - Whybike.com said...

Wow, geat post. No bias, no pedjudice, no BS. Lay out the facts and let the reader make up their mind. Keep it up.

Lucky said...

Thanks James,

I've picked on HD before, but not so much the bikes as the whole "brotherhood" that has been built around it. For what it's worth, I also pick on GoldWings, sportbikes, scooters, etc... Heck - nobody's safe!

Like I said in the post, I'm impressed by HD's comeback in the past twenty years; I'm just wondering if they can keep up the momentum into the next 20 years while selling the same old snake oil. I personally would never consider buying a Harley, because they don't have anything that interests me. When they come out with something that has +100hp, upright seating position, respectable lean angles and plenty of comfort for a full day of 2-up riding - I'll be listening. Until then, others are already offering what I want.

Cheers,
Lucky

Gary said...

This is a pretty comprehensive analysis. HD is certainly weighed-down by the myths and legends of it's past, but that doesn't seem to be hurting the bottom line any.

If they tried to move into other market segments, while still being made in USA, they would have a serious pricing handicap to overcome.

Their current clientele aren't as interested in function as they are in form. At HD, the Form is Holy. It is the Tradition, and the Heritage that define the brand.

It would be interesting to see Willie G.'s response to this post...

Ride well,
=gc=

Gary said...

Sorry Lucky, but another thought occurred to me...

Having been an HD "biker" back in the early 1980s, during the transition period, I have owned both AMF and Evo bikes. I have also roadraced Ducatis and other sportbikes, both on the street and track.

By far, the most dangerous activity was the latter. What HD has going for it is the image of danger, without so much of the substance. You can LOOK like a badass without having to BE a badass.

That is the essence of the HD appeal these days: Image over substance.

Ride well,
=gc=

Lucky said...

Hi Gary,

I agree that HD is somewhat enshrined in lore and legend, but I still don't think this should be an inhibitor for them to evolve the brand. And although their bottom line is stable, it would seem as though their stock has stalled since mid-2000; it certainly hasn't risen as meteorically as it did in the preceding decade. I don't see why they would have a price handicap when trying to compete in other markets; after all, Triumph ain't doing too bad and their prices aren't that far off par with Japanese offerings (ex. Daytona 675 - $8,999).

My observation was simply that HD seems to cater moreso to a specific demographic, and with that group aging I'm not sure if they're ready to tackle what's next. I have noticed that they've been offering more options to women riders; which I think makes excellent business sense considering how fast that segment of the market is growing.

I've got no problem with people who buy bikes specifically for the look and lifestyle; but personally it isn't my thing. This should be rather obvious as I ride a V-Strom; largely considered ugly by the same people who ride it!

I believe that HD could try to create more modern bikes that would still offer a fair amount of image along with a healthy dollop of function; I was just suggesting that maybe they should check out some different images.

Cheers,
Lucky