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Archive for July, 2010

2011 Cross Roads Custom

‘Tis the new model season and earlier in the week Victory Motorcycles provided information on its 2011 line-up at a dealers meeting in Orlando, FL.

The Medina, Minnesota-based company has been busy researching how to attract buyers in this challenging marketplace. They’ve been blacking-out components, beefing up engines, recalibrating transmissions, tuning the exhaust, and made ABS standard on several models.  For 2011 the company brings the introduction of 15 motorcycles.

Most newsworthy, however, was the manufacturer’s decision to use the new “Victory Freedom” 106/6 V-Twin in every model.  The powerplant is a 4-stroke, 50-degree, 106 cubic inch (1731cc) V-Twin (compression ratio 9.4:1).  There are two versions of the 106/6 powerplant. The first is called the “Freedom 106/6 Stage 2 V-Twin,” which has a special Stage 2 cam package that boosts its power numbers to a claimed 97 hp and 113 lb-ft of torque.   All of Victory’s cruiser models (Vegas Jackpot, Hammer, Hammer S, Vegas, Kingpin, all three 8-Ball cruisers, and the Zach Ness Signature Series Vegas 8-Ball) will come with this engine.  The second version is called the “Freedom 106/6 Stage 1 V-Twin” which puts out a claimed 92 hp and 109 lb-ft of torque and will power the remaining 2011 motorcycles, including the Cross Country, Cross Roads, Victory Vision Tour, and Arlen and Cory Ness’ Signature Series.

In addition the motorcycle manufacture updated its transmission to a “100K mile” warranty along with modifications aimed to reduce driveline lash, reduce gear whine and to make it easier for riders to shift into neutral at a stop courtesy of a “Neutral Assist.” It’s also said to improve ride-ability and deliver a more appealing-sounding transmission.

The new Cross Roads Custom touring bike will feature air-adjust rear suspension, dual disk front brakes and inverted forks.  The company also announced a new custom program, which allows a consumer to select the bike color, saddlebag style, highway bar style and possibly a windshield. All totaled, the consumer can select up to 48 possible combinations.

Photo courtesy of Victory Motorcycles.

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Barricades outside The View studios on West 66th Street

There are more than 13 MILLION people unemployed.  You can’t trust the prognostications as we’re in a state of chronic joblessness. Two wars, the BP oil slick, housing implosiong, poll numbers down and imaginary racism (Shirley Sherrod & Arizona Immigration) is up – so it’s a good time to go on “The View” for a little “Chatty Kathy” with friends.  Huh?

I’m speaking of President Obama who made the unpresidential decision to appear on The View! Given all the hard hittin’ questions about – his iPod playlist, Mel “The Raging Ranter” Gibson, Lohan’s jail stint, his fav colors and Snooki!   Who?  Was this a Tiger Beat interview?!  Next up in the fluffy daytime TV demographic has to be a Jerry Springer special to break through directly to those people who think dignity’s out of fashion.

The only item missing was a well-placed Harley-Davidson commercial break espousing “What Women Want” from a cruiser motorcycle – just after that Mel Gibson question.  The media spin was classic.  Let’s talk about needing to govern vs. campaigning as he sat there on the sofa promoting himself and his agenda to the daytime talk show demographic – a bunch of mindless women who talk a lot about nothing everyday.

In order to have time to visit the “den of gossip” the president snubbed the Boy Scouts and their l00th anniversary jamboree, for which he was the scheduled main speaker.  Nice!  Obama’s three predecessors have spoke at the event.  No worries.  I’m sure all the Scouting youth will forget the administration snub as they become exceptional (voting age) adults.

And if you’re like me, being subjected to this JayZ and ‘Snooki’ nonsense – all in the same sentence – had me wondering if my mind had turned to mush.  Could  the time not be better served elsewhere?   It was the wrong timing, wrong message, wrong audience and I have no clue why they thought this was a good idea?

We need leadership not lecturing.  Dude needs to do his job.  If not, I hear BP is looking for a new spokesman.

Note: I’m not on a White House watch or changing the blog to rant on political accountability, but this was just “Bush’s” league when it comes to issues of credibility.

BREAKING NEWS: July 30, 2010 —  Snooki gets arrested per US Magazine.

Photo courtesy of Jen Chung.

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Huffington Post Slams Harley-Davidson

I’m talking about the Huffington Post (“Huff-n-Puff”) who went to DEFCON 4 as they strike out against business, again.

This time round they demonize Harley-Davidson.  The poster-child of everything that’s wrong with American business.  Disregard the “mother of recessions”… they’re slammed as an irresponsible corporation for seeking profitability.  OMG!  Of all things…imagine an American company wanting to be profitable so they can continue to serve their customer base and shareholders.  What’s the world coming too?!  Then adding insult to injury they suggest that all motorcyclists heading to Sturgis need to send Harley a message – CREATE JOBS – independent of the new normal – just bolster hiring and production!  Wear a “Jobs First” button, post YouTube videos… do anything and everything to send a message is their rally cry.

Bill Scher, Executive editor of LiberalOasis.com wrote the scathing article and cites his partner news publication (a.k.a. NY Times) who reported that H-D had a $71M profit in Q2’10, yet continues to shrink its workforce.  True enough.  Many companies are focused on cost-cutting to keep profits growing, and in many cases the short term benefits are largely going to shareholders instead of the broader economy, as management needs to conserve cash rather than increase hiring and producing more product which isn’t selling.

I don’t often rush to H-D’s defense and I’ve been critical of H-D focusing too much on cost-cutting to keep profits growing at the expense of innovation and new products.  But Mr. Scher and his send ‘em a message drum beat are off tempo.  Nowhere does he state that $60M of the $71M in profits for Q2’10 came from H-D’s financial services arm.  The first time they’ve made money from this division in 2-years!  He doesn’t discuss the union cost issues, the increasing state tax issues and the list goes on and on.  Many have been reported on in this blog.

Bottom line is that H-D is not irresponsible.  For them to stay in business the next 100 years they have to resize to match the realities of the economy.  It’s the “new normal.”  Blame the housing bubble, the economy or the competition, but the fact is Harley-Davidson overall sales have fallen every quarter for 3 years.  Yet, it’s fixed costs like infrastructure, commodities and rent remain the same.  Clearly H-D has yet to crack the code of a successful industrial turnaround and have been in scramble mode.  They need to continue shrinking the business to a size that’s defendable, and growing off that lower base, else they risk being restructured into oblivion.

Sure I’m frustrated over the weak American economy, and angry at the lack of support for manufacturing in America.  I’ll be one of the hundreds of thousands of bikers in Sturgis and will have a chance to send a strong message to Harley-Davidson.   I plan to thank them for doing unnatural acts while trying to remain profitable so they can continue to serve their customer base.  You and I!  Then I’ll remind them they are behind on innovation.

Mr. Scher I’ll be in Sturgis… wearing the “I Heart Harley” button.  If you really want to help “win back America” consider purchasing a new 2011 Harley, ride it to South Dakota and spend some of that ‘how-to” book money at a Sturgis vendor booth.

Photo courtesy of Huffington Post.

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H-D CVO Road Glide Ultra - 2011

Harley-Davidson released their 2011 model lineup at 10am (pacific).

There are minor feature improvements across the board and three new bikes: the Road Glide Ultra, Sportster SuperLow, and XR1200X.  In addition,  for select touring models new in 2011 is an optional $1,995 PowerPak package, which adds ABS, a security system, and bumps up the 96 cubic inch motor to 103 cubic inches. Touring models also receive a narrower seat with revised cushioning. Softails receive new hand controls with a single hazard button and trip switch, and the larger odometer which adds gear and rpm info.

On the CVO front, H-D is building one new model (CVO Road Glide Ultra) and three models return for 2011: the Street Glide, Ultra Classic Electra Glide, Softail Convertible.  All are powered by Screamin’ Eagle 110 engines.  The models are:

  1. CVO Road Glide Ultra — Priced at $35,999, and gets an upgraded BOOM! bagger audio speaker system.
  2. CVO Softail Convertible — Priced at $29,599, and features a new mini-ape handlebar, larger saddlebags, a two-speaker stereo with an iPod, cruise control, and ABS.
  3. CVO Street Glide — Priced at $32,499, and gets to wear a 19″ front wheel (the largest ever on a touring Harley)
  4. CVO Ultra Classic Electra Glide — Priced at $36,499 and it includes a Road Tech zumo 660 navigation system, a power locking system, ABS, and a new dual-heated hammock-style suspended seat.

The new lineup features a drop from last years 38 bikes to 32 motorcycles, with four of those comprising the CVO lineup.  There is a lot more information and photo’s on Basem Wasef motorcycle blog.

So what are your thoughts about the 2011 Harley-Davidson model lineup?

Photo courtesy H-D.

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Triumph -- Jolie -- Salt

The persona projects a take-no-prisoners ferocity along with unapologetic James Bond intelligence.

I’m talking about Angelina Jolie and her movie ‘Salt‘, a spy thriller where she plays Evelyn A. Salt, a rogue CIA agent who tries to clear her name after being accused of being a Russian sleeper spy.  The movie released this past weekend to fairly positive reviews and attendance figures.  Being a mom of six you’d think taking the kids to see Toy Story 3 would be the goal of the day vs. getting back to gunslinging and fistfighting while clinging to the side of a building, leaping from a balcony or racing a motorcycle.  But actors need to earn a living too and this is a chance to show off the action-star talent again in what many see as another franchise – can you say ‘Salt 2’?

Scoring a major product placement opportunity in the film was motorcycle manufacture Triumph.  Jolie was filmed in a motorcycle chase scene as the ‘Salt’ character rides a 2009 Triumph Street Triple R in the film.

Photo courtesy of Triumph

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Harley-Davidson Facebook "Wall"

“Messy” Jesse wants to reunite with Sandra.  Mel “The Raging Ranter” Gibson is on the phone, again [THREE EXPLETIVES DELETED BY THE EDITOR DUE TO BEING VULGAR!!].  Bristol and Levi are back together.  The American Idol summer tour starts soon and The Bachelorette is close to selecting her dream man!  As if there is such a thing because Maricar “The Whip-Cracking” Dominatrix has been passed around more than a lumberjack camp salt shaker!

I’m thinking that free speech isn’t free because I have to REALLY work my brain to tune out all of this so-called “news”…

And speaking of short attention spans.  Yesterday, Facebook hit a new milestone; it reached 500 MILLION monthly active users (i.e. within the last month, 500M unique users have logged in).  That’s not the same metric as the number of registered users/accounts on a system i.e. Twitter’s 100M registered users, it’s 500M monthly active users.  That’s huge.  Also from the stats zone approximately 70% of Facebook users are from outside of the U.S., they average 130 friends, are connected with 80 pages (groups and events), post 90 pieces of content each month and spend over 700 BILLION minutes per month on the site.

Harley-Davidson Facebook "Info Page"

In a world of readily-available stimulation, where you can flip the remote or click a different link if you don’t like what you’re experiencing now, it’s really darn difficult to keep the attention of the public with mediocre product.  Motorcycle companies address this problem by adding bells and whistles, by doing their best to dazzle web surfers.  But this is akin to a wreck on the highway, you slow down to check it out, then you forget it.

So what about Harley-Davidson’s social media activity?  Is it an original that sparks rider inspiration or do you think it’s just another rendition of syndicating corporate messages?  I became interested in that question which brought to mind whether social media and specifically the Harley-Davidson Facebook page makes riders dumber?  Or smarter?  The H-D Facebook page has more than 956,000 fans.  I don’t think it’s a big stretch to suggest that some of the interaction with/or the overzealous status updates reflect more on folks who are in self-destruct mode, either by being excessively confessional or who foolishly post the bizarre and want to be in the limelight for 5-minutes of fame as dumbing-down riders.

Harley-Davidson Facebook "Events Page"

Don’t get me wrong, I like Facebook, I’ve reconnected with old friends and can easily keep in touch with current ones.  But motorcycle companies are fighting for your attention.  And people get angry if you jump in front of them with classic “stiff” marketing and demand it.  It’s like begin cut off on the highway.  You want to beep the horn or project the middle finger, you’re anything but open to being nice to the driver.  The internet democratizes access to information.  Suddenly the largest cost driven American motorcycle manufacture looks no better than a smaller independent motorcycle manufacture or the one-man customizer.

Yes, if someone’s truly interested, if they’re hooked, they’ll give you untold hours of attention.  But you’ve got to be good.  People don’t dedicate time to train wrecks, they invest in quality.  But that’s harder to come by.  Which is why some companies seem to blame the audience rather than look internally at their mediocre offering.

Photos courtesy of H-D and Facebook.

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Harley-Davidson issued a recall notice on certain model 2010 FXDF motorcycles with fork leg assemblies (LH P/N 48622-08, RH P/N 48623-08) manufactured from February 9 through February 29, 2010.

The fork leg assemblies may have been incorrectly assembled using the wrong springs and as a result the motorcycles containing the wrong springs will have reduced effectiveness which can cause reduced traction on irregular road surfaces and will also create an irregular lean angle when parked on the side stand.  The condition may increase the risk of a crash.  The recall effects potentially 70 units.

The recall notice is NHTSA campaign ID number: 10V329000  N/A.   Motorcycles with the wrong springs will be notified by Harley-Davidson and they will repair the affected motorcycle free of charge.  The recall is expected to begin on or about July 26, 2010.  Owners may contact Harley-Davidson at 414.343.4056 or the NHTSA web site or hotline at 888.327.4236 for more information.

Photo courtesy of H-D.

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The jester who stole the kings crown…Bob Dylan.

He rode a 1966 Harley-Davidson Shovelhead and loved to ride to get away.  Once when riding through the countryside, he commented that “The police are really friendly around here; they are all waving at me.” Later he learned they wanted him to stop because he had no helmet on.

And speaking of getting away.

It’s about time to load up for the long haul and head east where the thunderclouds hover over grain bins on soybean fields.  I’m talking about the Black Hills Motor Classic, which most of us just call Sturgis.  And the jester himself is playing at the Buffalo Chip on August 10th!

Road-to-Sturgis Game (circa: 1989)

Getting on the “Road to Sturgis” reminds me of that video game by the same name which Harley-Davidson released in 1989.  The game is about a biker who’s trying to get to Sturgis for the annual biker event, unfortunately it’s only days away and you are on the other side of the country. You’re main objective is to get to Sturgis within days, but to gather enough fame to become legendary as the ultimate biker.  You start off the ride determining wealth, charisma, riding ability, mechanical ability and brawler skills…in case you need to work as a bouncer along the way.  After selecting your stats you begin outside a local bike shop where you can spend some of your money to upgrade your bike. Sound familiar?!  Things like brakes, springs and even whole engines can be upgraded but every Harley has to be unique and you have to make it look different.  You’ll also want to buy some extra sturdy clothes because being on the road on a motorcycle is not easy.

Unlike the real world, the riding sequences had very little scenery and were quite lame.  The game suffered from a very limited appeal and these days it’s a challenge to find much of any information about it.  The game did have something that made people want to come back, probably the idea of riding alone on a motorcycle from coast-to-coast is something that appeals to a lot of us.

The Sturgis rally was started in 1938 by the Jackpine Gypsies Motorcycle Club as an event for Harley riders and their families.  Until he died the founder of the club, J.C. “Pappy” Hoel, would oversee everything, right as rain.  This year it’s the 70th Anniversary and no place in western S.D. will escape the roar and hum of the motorcycle engines.

If you’ve got a few extra bucks on you and can get your scoot to I-90 and exit 32 you’ll be in for a real treat.

Photos courtesy of H-D.

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Polaris Industries -- Victory Motorcycles

Creativity.

There is a fascinating and quite boring article in ‘Newsweek’ about the creativity gap, how creativity is declining in America.  Reading it I couldn’t stop thinking about the motorcycle business and specifically Harley-Davidson.

Given it’s earning season; H-D announce earnings HERE, now it’s Polaris Industries Inc. (NYSE: PII), makers of the Victory motorcycles turn who reported its Q2’10 net income of $25.6 million.  By comparison, the 2009 second quarter net income was $17.5 million.  Sales for the second quarter 2010 totaled $430.9 million, an increase of 25% from $345.9 million recorded in the year-earlier period.

Scott Wine, Polaris’ CEO stated:

“Polaris maintained strong momentum in the second quarter, driven by solid market share gains, sales growth and margin expansion. Innovation and execution enabled us to deliver another quarter of solid operating results in an overall economic and powersports industry environment that remains sluggish.”

Yeah, but you’re likely saying that’s all ATV and snowmobile sales, right?  True the lions share is off-road sales, but specific to sales of the On-Road Division, which primarily consists of Victory motorcycles, they saw an increase of 48% during the second quarter of 2010 vs. the same period in 2009. The N.A. heavyweight cruiser and touring motorcycle industry remained weak during the quarter, but Victory motorcycles had strong retail sales during the second quarter, increasing more than 10% in N.A. compared to the second quarter last year, resulting in overall market share gains and retail sales growth for the third consecutive quarter. The increased demand reflects the popularity of the new 2010 Cross Country and Cross Roads touring models.   The N.A. dealer inventory of Victory motorcycles declined 32% in the Q2’10 compared to 2009 comparable levels. The sale of Victory motorcycles in markets outside of N.A. continues to accelerate, with sales reaching 25% of total On-Road/Victory sales for the year-to-date period.  And lastly the income from Polaris financial services was $4.2 million for Q2’10 compared to $4.0 million in 2009.

I can’t put my finger on it, but there is something missing for me with the Victory motorcycle.  Maybe it’s just the “bar-n-shield” logo and now my bias is showing?  But I balk at comments from riders that claim Victory is NOT a threat or competition for H-D… it just doesn’t ring true.  The cruisers are more roomy, the engine has more HP, the motorcycle is lighter, has a lower seat, larger saddlebags all at a cost of thousands less means Victory is doing a lot RIGHT on the creativity front.

In other words, the Harley-Davidson businessmen look to squeeze all the creativity out in the name of profits.  And now the business is in the hands of the manufacturing line worker, who are always the least creative element in the chain.  The engineers designed out cost, the line-worker built them at the lowest cost, the dealer sold them slightly above cost. Now the company is trying to fix the business, but are flummoxed.  Do they truly think cutting out cost, means somehow people will magically appear?

They’re not and meanwhile Victory ratchet’s up innovation.

Photo courtesy of Polaris/Victory Motorcycles.

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Concert promotion blew up in the ‘70’s during the development and heyday of classic rock.  Stadiums or festivals were where the gigs took place as music drove the culture and everybody wanted to participate.

Thirty plus years later and along comes the internet.  Suddenly everyone is no longer focused on the same thing and niche was king.  Yet the major music labels continue to play the same old tune of trying to get acts TV exposure and on terrestrial radio with 22-minutes of commercials an hour, but the public is sick of being dictated to by music corporations purveying artists only in it for the buck and have tuned out.   The end result?

Is today’s modern concert business where the average person feels fleeced by excessive fees and high ticket prices and have decided to pass on most concerts.  In fact, ‘twenty-ten’ might go down as the turning point year that devastated the concert business.  Look at the signs from SoundScan.  Arizona concert boycotts.  Cancelled concerts by the Eagles, poor showing for John Mayer, Bon Jovi downsizes the number of cities, the death of Lilith Fair, winery offers for Court Yard Hounds, and the ever popular $10 concert cash coupons if you can drink a dozen 1-litre bottles of Diet Coke at $1.49.  The list goes on.

H-D Tent @ Mayhem

Disregarding the external conditions of the concert promotion sphere, is Harley-Davidson marketing.  Their demographic ‘machine’ determined that ‘twenty-ten’ is the year to double down on seeking young motorcycle buyers and do so at…music concerts!   Huh?

It’s true.  They launched their H-D Golden Horse Saloon at the Rockstar Mayhem Festival two weeks ago in San Bernardino, Ca., in an effort to market to young, edgy potential customers.  The third concert of the tour was last week at the White River Amphitheater, in Auburn, Wa.  The festival includes Korn, Rob Zombie, Lamb of God, Five Finger Death Punch, Hatebreed and several other bands. Last month H-D had a similar set-up at the Bonnaroo Music & Arts Festival in Manchester, TN.

Rob Zombie (R) and drummer (L)

The goal of any Harley-Davidson special events marketing campaign is to generate awareness and increase sales among the target audience.  It’s well known in music circles that the concert business is in the toilet.  Sure you can talk about the economy, all the external business factors, but they’re secondary to the acts, the music.  It’s doesn’t matter how great the venue is, certainly doesn’t matter how great the promoter is, it comes down to the quality of the act and whether they can draw a crowd.  Given sky high concert prices and that we live in an on-demand world where you experience only that which you want means this demographic outreach/tactic is unlikely to pay motorcycle sales dividends for Harley.

H-D Demographic -- Young Edgy Potential Customer

One notable item…  Mayhem could arguably be the loudest festival on the planet giving the sparse crowds so much ‘metal’ that many will feel aurally violated after the gig.

Photos courtesy of H-D, Mayhem Festival and Rob Zombie.

Bonus: If you’re into this type of ‘Metal’ music mix there is a free 9-song download via iTunes (good through Sept 30th) using the following code to redeem the songs: 9EL3JJRW3JNF

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