There was a saying back at height of Detroit’s dominance of the auto industry: “As GM goes, so goes the country.”
The company was a behemoth that employed not only thousands of workers, but also supported hundreds of suppliers, sub-contractors and DEALERS. We would argue that for the motorcycle industry, GM can be interchanged with Harley-Davidson.
By this point, everyone knows how Harley’s woes with selling new bikes and finding new customers has trickled down to just about everyone in the powersports industry (except perhaps the UTV market). Lack of new riders really puts a damper on the hopes of banner new unit sales in 2018. We don’t mean for this to sound so downbeat, but it is what it is until we find some solutions… and fast! Industry insiders and assorted OEM experts have been weighing in on the topic recently. Harley’s CEO Matt Levatich even gave a keynote speech about the lack of younger riders at AIMExpo in October. Polaris/Indian CEO Scott Wine also voiced his concerns and offered some solutions as well. However, if you heard what they said, you would note that there really was not a silver bullet solution. Consensus is that we all have to “work together” as an industry to pull in new riders.
Harley’s reaction to the market slowdown was to announce they are taking on the mission of training 2 million new riders and introducing 50 new bikes over the next five years (and 100 bikes by 2027). The Motor Company also plans to fill in for the reduced domestic sales number by expanding overseas business by 50 percent. That’s a tall order, even for Harley, but desperate times call for desperate measures.
Levatich noted that the industry is competing with “everything that distracts… virtual things that compete with what is for real. We all love the hardware, but our future must be more about the software… not digital code software, but people and how they think, why they ride and in fact, why they don’t ride.”
Bob Kay believes AIMExpo’s Custom Culture initiative is more closely aligned with the younger generation of riders in part because it is all inclusive instead of simply focused on V-Twins. “Personalization is an outward reflection of their lifestyle, as opposed to identifying their lifestyle around the legacy custom scene,” explains Kay. He says evidence of this can be seen at today’s bike shows such as Born Free, Mama Tried, The One Moto Show and Garage Brewed, to name a few.
One of the biggest headlines to hit the V-Twin market was Polaris’ 2017 decision to pull the plug on Victory, which had been struggling to achieve profitability. The acquisition of Indian Motorcycles, which came with a compelling story and growth potential, meant that this decision was practically inevitable given the current market conditions. “This decision will improve the profitability of Polaris and our global motorcycle business, and will materially improve our competitive stance in the industry,” Wine said.
“Our focus is on profitable growth, and in an environment of finite resources, this move allows us to optimize and align our resources behind both our premium, high-performing Indian Motorcycle brand and our innovative Slingshot brand, enhancing our focus on accelerating the success of those brands,” Wine added. “Ultimately this decision will propel
the industry-leading product innovation that is core to our strategy while fostering long-term growth and increased shareholder value.”
After the Victory shutdown, many dealers were left holding the bag, and they weren’t happy about it, and neither were their customers, according to MPN columnist Rick Fairless of Strokers Dallas. “The Victory shutdown is still unfolding and our customers are still spitting mad over it,” noted Fairless in his column last year. “I try to explain it to them that it is a business move, but they don’t care. They are passionate about their Victory Motorcycles and they hate to see Vic go away. But, they can still enjoy riding their Vics until the cows come home. We are actually selling some new Vics since the announcement.”
While Fairless said he will continue on as an independent, he also said he is building more choppers now than he has in years. “We have five ground-up custom bikes we are building right now and they are all CHOPPERS!” Fairless said last year. “I think choppers are making a comeback.” He is seeing the big wheel bagger trend slowing down a little lately as well. “It ain’t dead, but it’s not where it was a few years ago either.”
Don Argent of Avon Motorcycle Tyres North America noted they used to be the king of the wide tire, but now there’s not as much demand for them. He agrees that choppers may be making a comeback, but also points out that they are not much fun to ride. “They look cool on social media, but to ride one for any distance can be a chore,” he added.
Most people we spoke to say the V-Twin market has contracted significantly. One marketing rep we said that they are struggling to see where to put their marketing dollars because the number of media outlets is smaller than ever and the money they spend to go to shows is continually increasing. The V-Twin Expo by Easyriders that was held in Cincinnati, Ohio, for the past 18 years is the latest victim of the V-Twin market shrinkage and show officials announced that they were canceling the event, which had been the only trade show exclusively for the V-Twin industry.
Seth Woolf, who writes MPN’s Market Intelligence Report, says that the dealers he surveyed in October see weakness continuing. He does note that used bikes continue to perform well in the heavy weight V-Twin segment. “The most interesting aspect of recent H-D commentary is the fact that the unbridled optimism that was associated with the new Softail platform has begun to wane,” Woolf said. “In our view, this is reflective of the fact that the broader demand environment is simply weak and consumers remain price-sensitive, which works against Harley, as the OEMs’ new model year prices increased. Said differently, most respondents expect the used market to outperform new bikes for the foreseeable future.”
As Harley-Davidson goes, so goes the motorcycle industry? As an enthusiast, it’s probably a great time to buy an old bike, however it is a difficult time for a dealer, especially a Harley franchise holder since The Motor Company doesn’t discount its products. Will they continue to bleed market share to Indian because of this? Rather than battling with Indian for a dwindling marketshare, let’s hope Harley succeeds with its investment in new riders and bikes that appeal to them pays off. t
Scot Harden’s Plus 1 New Rider Initiative
AMA Motorcycle Hall of Famer Scot Harden has launched his Plus 1 initiative, an effort to encourage motorcyclists to become evangelists for the lifestyle. Harden, a motorcycle industry consultant, has outlined several simple actions motorcyclists can take to help non-riders better understand the appeal of the motorcycling, whether for recreation, competition or transportation. Harden outlined his concept in an article for the American Motorcyclist magazine:
Here are just a few things we can do as motorcyclists to turn people onto motorcycling and perhaps convince them to give it a try:
1. Share your passion with others. Expose non-motorcycle friends to the sport. Use your motorcycle(s) as props to promote discussion about motorcycles.
2. Attend an event. Invite your non-motorcyclist friends to a motorcycle show, race or rally.
3. Take a friend for a ride. It doesn’t have to be all day. Take them to lunch or for coffee. Let them experience the fun and enjoyment of riding.
4. Teach someone how to ride. Get them over their initial fears. Show them it isn’t as complicated as it looks. Encourage them to take a rider-training course.
5. Invite your non-motorcycle friends for dinner and a movie such as The World’s Fastest Indian, Long Way Around, The Motorcycle Diaries, On Any Sunday or Take It to the Limit. Anything to inspire them to want to give motorcycling a try.
6. Share the experience. Tell your co-workers about your latest motorcycle trip or adventure.
7. Invite non-motorcycle friends to go camping with you and experience the outdoors.
8. Visit your local motorcycle dealer and invite your non-motorcycling buddy to tag along.
9. Target social media. Share pictures of yourself enjoying the sport. Share posts you come across that are inspiring and show just how much fun motorcycling is.
10. Reach out to millennials. For all you baby boomers out there, make an effort to reach out to your children’s friends and acquaintances.