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Archive for the ‘Dealer News’ Category

Let me start off by saying I like Indian motorcycles. I really do.  I’m digging the variety of styles and the attention to detail on each build.

But, my heart is with Harley…

In a previous post I discussed the Indian “Challenger Challenge,” a campaign that invites motorcyclists to test ride the Challenger and the Harley-Davidson Road Glide® Special back-to-back for a head-to-head comparison.

It’s brilliant.

It’s worth pausing for a moment to consider how this campaign would’ve worked out if Indian used any other motorcycle in their lineup vs. the Road Glide — one of Harley’s bagger cash cow.  It’s dangerous to make assertions about “might-have-beens,” or what analytic philosophers like to call “counterfactuals,” because no evidence can exist that fully demonstrates the falseness of such an assertion.

But, I’ve digressed.

A “bake-off” for the preeminent bagger, demonstrates a battle for supremacy in the public mind.  It’s also a battle for cultural supremacy, not a judgement about features, technical prowess or achievements.  It’s the subtlety of Indian craving the appeal of that, what makes a Harley, a Harley.  That ineffable something (that je ne sais quoi, if you need a phrase to go with your cappuccino).

So, in classic Harley fashion, and only 5-months in the role, Jon Bekefy (GM of Brand Marketing at Harley-Davidson) calls BS and snapped back at Indian.  Mr. Bekefy uploaded an agency polished Instagram post and in the process scorches Polaris. (Bekefy Twitter)

In other words, “Anything Polaris/Indian can do, Harley can do better.”  Clearly the General Manager of Brand Marketing at Harley-Davidson doesn’t want to get upstaged.

We all know that Harley-Davidson is not just a bike, it’s a choice.  An existential decision and the life that follows upon it.

Wait.  That statement may not be as defensible, since Harley is now promising to be another “transportation” manufacture delivering a Chinese 338cc bike where affordability remains paramount to the upscale EV future of two-wheel transportation and includes all bicycle types in between.

As Indian and Harley arm wrestle each other over boomer-centric models, it has a limited lifespan and is unlikely to generate a lot of new riders, but it’s pure theater and fun to watch!

Photo courtesy Instagram.

All Rights Reserved © Northwest Harley Blog

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Indian Challenger vs Harley-Davidson Road Glide

Earlier this week, Indian announced the “Challenger Challenge,” a campaign that invites motorcyclists to test ride the Challenger and the Harley-Davidson Road Glide® Special back-to-back for a head-to-head comparison.

It’s not the typical, behind-the-scenes advertising effort by Indian to sell a product in its own time and in its own way.  Instead, it’s a high-visibility campaign marked with in-your-face marketing which proclaims — the Challenger will absolutely “smoke the competition.”

That’s a blue-collar craftsmen and beer-bellied “motor-head” inflammatory call to battle!

Will Harley-Davidson laugh and say, ‘Good try, bad result‘ expecting it to reinvigorate the Road Glide sales or will the Milwaukee gurus sit up and make a hard-eyed comparison of the competition’s strengths?

I’ve posted previously that motorcycle growth rates domestically are decelerating.  Wall Street is worried that the motor company has tapped out demand for their line-up as sales cool.

Challenger Challenge Stats

My initial reaction of the Indian campaign was, it being reminiscent of the 1980’s when commercials were a sign of the times — desperate, struggling times that car manufactures hoped would turn prosperous.  You might remember, “If You Can Find a Better Car, Buy It” ad campaign?  The face behind that familiar slogan was Ronald DeLuca — the advertising whiz hired by Chrysler Corporation chairman Lee Iacocca to turn around Chrysler’s late-1970s death plunge in a recession-weary America.

Indian has the not-so-simple task of convincing Americans that the motorcycling passion isn’t an archaic lifestyle teetering on the edge of the toilet bowl.  Or if Millennials are truly killing motorcycles, then why not ride it out in style with a new Indian Challenger!

Carey Hart and Big B

The Challenger Challenge is set to launch at Daytona Bike Week on Friday, March 6th.  The product demo tour will visit Indian Motorcycle dealers around the country, as well as select motorcycle rallies and events, including Sturgis in August. In addition to the national tour, select Indian Motorcycle dealers will have a Road Glide on hand to ensure that any customer who visits their dealership can take the Challenger Challenge.

Of course there will be a full-court press with social hashtags and digital media including a video series where Carey Hart and Bryan “Big B” Mahoney, pit the new Indian Challenger against the Road Glide Special in a series of rubber burning tests that showcase power, torque, braking and handling.

We will know soon enough if the campaign is more about finding new customers who don’t necessarily want to own a motorcycle or boosting the Indian public image and extending the brand’s good name.

Photos courtesy of Indian Motorcycle.

All Rights Reserved © Northwest Harley Blog

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2020 CVO™ Road Glide®

Mid-way through the motor company 2020 model year — Harley re-introduces a CVO™ Road Glide®.

Similar to the 2019 model, the re-launched 2020 CVO (Custom Vehicle Operations) motorcycle is packed with aesthetic and performance features.  Of course, there’s the 117-cubic-inch Milwaukee-Eight Big Twin (includes color accented Rocker Box Lowers), a heavy breather air cleaner with a factory rating of 128 lb.-ft. of torque which is five percent more than 114-inch engine.

The CVO Road Glide’s sub-27-inch seat height will provide a wide variety of riders a solid feel in the saddle.  There is a high-output BOOM!™ GTS infotainment system, as well as a 21-inch front and 18-inch rear wheels, finished in Gloss Black and Contrast Smoked Satin.  New for several 2020 touring models and now included on the CVO Road Glide is the subscription-based cellular connectivity, where you can connect to your bike through a smart phone using the Harley-Davidson® App and check the bike’s vitals including fuel level, get tamper alerts and stolen-vehicle tracking, and more.  The motorcycle is complemented with the “phat” heated Kahuna™ collection hand grips and controls.

CVO™ Road Glide® Heavy Breather

What might be behind this un-typical launch?

It’s called twelve consecutive quarters of U.S. sales decline. As previously reported, Harley-Davidson motorcycle sales slipped again in 2019 despite new models and expanded overseas operations.

In addition, it’s part of their “More Roads to Harley-Davidsonaccelerated resuscitation plan for growth and part of the 2017-2027 Objectives — Launch 100 new high-impact Harley-Davidson® motorcycles — which allows management to check a box for investors on a “new product.”

The good news is that if you want a 2020 CVO (only available in Sand Dune) parked in your garage, it’s going to cost you LESS!  Yes, less. The MSRP is $40,999.00, a reduction of $1,340.00 than last year.  The MSRP on the 2019 CVO Road Glide was $42,339.00 and for comparison the 2018 CVO Road Glide was $42,949.00

CVO’s are the badge-and-shield brand’s shining beacon on the hill!

It’s a borrowed analogy from John Winthrop, the first governor of Massachusetts who, upon setting sail for New England in 1630, wrote that, “We shall be as a city upon a hill, the eyes of all people are upon us.”

The eyes of motorcycle enthusiasts are upon Harley-Davidson…

Photos courtesy of Harley-Davidson

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The motor company gets beat down by critics for lack of technology advancements and then they’re pummeled on social media by customers every time they sway off from tradition.

In this category, the rock and hard place are A) the need for change and B) the danger of following the buzz.  And, in an increasingly social media driven world it is easy, and tempting, to mistake the buzz and savvy social pundits for a real business opportunity.

Simultaneously, the Wall Street view of Harley-Davidson’s move into electric motorcycles being an enduring trend will likely come up dry.  Then the industry analysts believe the U.S. motorcycle market is in terminal decline and are not influenced by a “fun appliance” and the More Roads to Harley-Davidson plan.

But, for many riding enthusiasts, the motor company has introduced so many changes over the last few years its difficult to know where to start.  I’m not talking paint colors, rather engineering developments, i.e. water-cooled engines, Reflex Linked Brakes with ABS,  Reflex Defensive Rider System (RDRS), subscription-based cellular connectivity, advanced electronics with Bluetooth connectivity, voice recognition (microphone/headphone fitted to the rider’s helmet), text to speech technology, sophisticated GPS navigation system, wind tunnel designs to reduce head buffeting, LED lights, revised manufacturing processes, 131 cubic inch Screamin’ Eagle® Crate Motor and the first great-looking electric motorcycle (LiveWire) along with a large number of smaller updates.

The list goes on and on….

Other than the fact that the motorcycles are not inexpensive and in several instances most everyone would consider as very expensive, there’s not much else really to grumble about.

Yet, Harley-Davidson stated yesterday in the Q4 2019 and year-end financial report that its motorcycle sales slipped again!  Despite multiple new models, electrification, expanded overseas operations and Brand strategies to resuscitate demand.

The 4th quarter 2019 net income was $13.5 million on consolidated revenue of $1.07 billion versus net income of $0.5 million on consolidated revenue of $1.15 billion in the fourth quarter of 2018.  That brought full-year 2019 revenue to $5.36 billion, compared with $5.72 billion in 2018.  For 2019, earnings were $2.68 a share, compared with $3.19 in 2018. Adjusted earnings for 2019 were $3.36 a share, down from $3.78.  Harley-Davidson sold 7% fewer units in Q4’19 than a year earlier. The U.S. dealers which account for half of worldwide Harley sales, saw their retail sales fall 3%.

CEO Matt Levatich tried to curb the narrative numbers skid (12th consecutive quarter of U.S. retail sales decline!) in the company’s announcement, saying, “Our performance in Q4 and the full year was in line with our expectations and indicative of increased business stability.”

I am reminded that in matters of business, it’s often the case that the most vehement of corporate assertions are at 180 degrees to inconvenient facts.

The freedom of the open road is all very well, but remaining in the marketplace and growing is key. The motor company should avoid “stooping to compete” with the rest of motorcycling (i.e. chasing buzz).  Harley is iconic because, instead of treating motorcycles as a commodity, it recognizes them as a basis for a lifestyle and a shared set of attitudes

Photos courtesy of Harley-Davidson

UPDATE: January 30, 2020 — added: 12th consecutive quarter of U.S. sales decline.

All Rights Reserved © Northwest Harley Blog

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Harley-Davidson ($HOG) is recalling certain 2019-2020 Trike motorcycles built between 3/12/18 and 11/5/19 with traction control.  The Trike Traction Control System software may respond incorrectly to a faulty rear WSS (Wheel Speed Sensor) signal by activating one of the rear brakes. Unintended activation of one rear brake could lead to an unexpected change in the vehicle direction which may increase the risk of a crash.

The potential number of units affected is 12,624.  The component manufacture is Robert Bosch LLC.

The remedy is for dealers to update the traction control system software, at no charge to the customer.  The recall began December 2, 2019. Owners may contact Harley-Davidson customer service at 1-800-258-2464. Harley-Davidson’s number for this recall is 0175.  Specifically, the new Electro-hydraulic control unit (EHCU) software download removes or disables the software from recalled component, that causes this unintended activation of a rear brake.

#9 – Traction Control Switch

Affected Vehicles:
FLHTCUTG         ’19-’20
FLHTCUTGSE     ’20
FLRT                 ’19-’20

IMPORTANT: Should riders choose to ride the motorcycle before this safety recall service has been completed, to reduce the risk associated with this condition, the motor company recommends that riders disable traction control on the motorcycle BEFORE each ride per the following procedure:

1. Start motorcycle, but do not begin moving. (Note: The (TC) icon in the tachometer will be flashing.)
2. Press and hold the (TC) button on the left hand control until the (TC) icon remains illuminated (solid) in the tachometer.
3. Do not touch the (TC) button during vehicle operation.

ABS Module (EHCU) (behind right side cover)

Since the system resets with every ignition switch cycle, this procedure needs to be performed at the beginning of every ride until the safety recall service has been completed.

NOTE: While the Traction Control function will be disabled, this does not affect other functions of the Reflex Defensive Rider System (RDRS). Reflex-Linked Brakes with Cornering-Enhanced ABS and Drag Torque Slip Control systems will remain operational.

Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to http://www.safercar.gov.

Photos courtesy of Harley-Davidson and National Highway Traffic Safety Administration

All Rights Reserved © Northwest Harley Blog

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Pan America™

At the EICMA (Esposizione Internazionale Ciclo Motociclo e Accessori), motorsports show in Milan, Italy, earlier this week — Harley-Davidson debuted two new bikes.  Important to note is the difference in the terms “launch” vs. “debuted.”

The Milwaukee MoCo has aimed one of motorcycles at a market segment in which Harley-Davidson has never really participated.

It’s my view that Harley-Davison is slowly trying to build higher walls to keep “enemies” (competitors) from invasion. Marketing types call this “relevance” and “barriers to entry.”  Multiple financial reports from the company clearly indicate a struggle to fire up a new generation of riders.  The growing presence of electric vehicles is undeniable, but the premium-priced electric (LiveWire) motorcycle — is a non·start·er in terms of revenue!

And at the same time, there’s been an invading army (BMW, KTM, Triumph, Yamaha, Honda or Ducati counterparts) of adventure touring bikes (ADV).  Importantly, this segment is where customers seem particularly excited to buy new models year-after-year.  Even Italy’s floundering boutique bike builder, Moto Guzzi, has had to double the workforce in its Mandello del Lario plant to keep up with demand for the new V85 TT adventure bike ($12,990).  It’s simple.  A fresh new design, a fresh new motor, and a capable around town, comfortable on freeways and durable enough for off-road riding gets customers excited to put down money!

We could have a long-debate on why Harley-Davidson spent millions of R&D dollars much too early as part of their electrification strategy and if the mainstream motorcycle market is ready to encourage motorcyclists to switch to electric vehicles.

But, lets return to the point at hand.

The first new motorcycle is an adventure touring bike (ADV) called the Pan America™.  Astute readers are likely to have déjà vu as it looks very similar to the Pan America concept motorcycle teased out back in 2018.

The Pan America has a new liquid-cooled 60-degree V-twin engine labeled the Revolution Max that displaces 1,250-cc and is reported to make 145 horsepower and more than 90 pound-feet of torque. Impressive stats, especially for the MoCo, which typically has built larger displacement engines with less power and more torque.  The new ADV motorcycle differs from traditional Harley models.  The first item, is exchanging the belt-style final drive for a chain drive that allows simpler gearing changes and improves on the ability to repair if something goes sideways on the trail.  The ADV also leverages a rear trellis-style subframe for strength and reduced weight, which allows motorcyclists to mount different types of adventure-isk luggage to it.

Other advancements include new radial monoblock four-piston caliper brake system developed in collaboration with Brembo and an inverted fork setup, which is common on ADV bikes.  From a styling perspective, you’ll either love the bird-beak nose and squinty cyclops-like headlight or not.

Harley-Davidson® Bronx™

The second new motorcycle is a middleweight class and called the Harley-Davidson® Bronx™. It’s reported to have a smaller 975-cc version of the Pan America’s Revolution Max engine and produces 115-horsepower and 70 lb.-ft. of torque.  Style wise, the Bronx looks somewhat cookie-cutter in this crowded “streetfighter” market segment.  From press photos the motorcycle appears to be belt-driven.  Both motorcycles will roll on new co-branded Michelin tires.

Harley-Davidson says that it’s aiming to have both the Pan America and the Bronx in showrooms by the end of 2020.

Huh?!  A year away?

I like the adventure touring bike (ADV) lineup, but if I was in the market to purchase, it’s unlikely that I’d stall buying for a year to purchase an unproven ADV motorcycle.  I also think it will be a mistake if the MoCo expects its Harley-Davidson name to garner an ultra-premium price in this new segment as it has in the EV market with the LiveWire.

The Pan American should launched and be in showrooms in March 2020, not “late” 2020.

Photos courtesy of Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

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It became evident today, that creative instincts, an innovation mindset, deep brand and consumer experience along with bottom-line orientation is no longer enough for Harley-Davidson executives.

I’m talking about Neil Grimmer (Twitter) — a San Francisco-area entrepreneur and previously, the Founder/CEO of a personalized nutrition life science company Habit, joined Harley-Davidson on April 5, 2019 as president of Harley’s global brand development.

200 days later it’s been reported by the Milwaukee Business Journal he is “no longer with the company.”  Of course that is an executive management euphemism for ‘You’re Fired’ — however, in the parlance of our times and to clarify he was — sacked, dumped, bounced out, canned, axed, eighty-sixed, let go, ran-off, given walking papers, given the pink slip, or given the old heave-ho.  To put a more cheery spin on it:  one could say he was “constructively discharged,” or “freed up for the future.”

In a memo to employees it was communicated that Harley-Davidson management received multiple complaints about Grimmer’s code of business conduct.   I’m being snarky, but apparently, those day-long seminars in workplace sensitivity never paid off?!

It’s been my experience that company execs get fired because of poor change management, maybe ignoring customers, or for tolerating low performers, or for denying reality or worse, for too much talk and not enough action.  But, it could be as simple as his ‘left coast‘ leadership style was just inappropriate for the MoCo’s particular culture.

I’m sure Mr. Grimmer is an extremely accomplished executive, but the reference by CEO Matt Levatich of multiple violations is a BIG deal.  The MoCo has a set of core values and principles along with a Code of Conduct HERE for employees and suppliers.

It’s not clear if Harley-Davidson has an executive non-fraternization policy, but clearly they prescribe to conducting business with honesty and integrity.  In addition, they prescribe to providing a workplace free of harassment based on personal characteristics and do not tolerate harassment of employees by managers or co-workers.

Harley-Davidson (HOG) stock was up today!

 

Harley-Davidson Code of Business Conduct:  HERE
Harley-Davidson Supplier Code of Conduct:  HERE

Photo courtesy of Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

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