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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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Harley-Davidson, Inc. (NYSE:HOG) reported the third quarter 2019 financial results in a press release HERE.

Key indicators the motor company reported was revenue from motorcycle and related products fell 4.9% Y/Y to $1.07B in Q3.  Motorcycle shipments were down 5.8% to 45,387 and gross margin fell one point to 29.9% of sales.  The company stated it expects shipments of 38,500 to 43,500 motorcycles in Q4 and 212K to 217K for the full year.

In other interesting financial sound bites; Harley’s Q3 marketing spend was up over 30% with efforts on the LiveWire and LowRider S television spots running in major markets across the U.S.  International retail sales were up 2.7% driven by growth in both developed and emerging markets.  In addition, Harley-Davidson gained 2.2 percentage points of market share during the quarter within the Touring and Cruiser segments, which represents approximately 70% of the total 601cc plus industry.

In the attracting more people to riding and keeping riders riding space (i.e. the 2027 strategic imperative) — in Q3 the company gained deeper analysis and insights on why people engage, participate and disengage from riding.

Lets call it a “participation lifecycle!”

H-D Marketing and Brand Amplification

Harley-Davidson now has an acute focus on how to influence each customer at their buying decision points to build the total number of committed Harley-Davidson riders.  By 2027,  the company will expand to 4M total Harley-Davidson riders in the U.S., grow international business to 50% of annual HDMC revenue, launch 100 new high impact motorcycles and do so profitably and sustainably.  Lastly, Harley added Amplified Brand as a growth catalyst in the More Roads to Harley-Davidson’s growth plans.

For example Harley-Davidson refreshed their brand look at major events during Q3 including Sturgis, World Surf League and Spartan races and recently announced we will be the presenting sponsor at next summer’s hotly anticipated Hella Mega music experience tour featuring Green Day, Weezer and Fall Out Boy.  The Hella Mega Tour being promoted by Harley-Davidson is the co-headlining tour of rock bands Green Day, Fall Out Boy, and Weezer. The tour was announced on September 10, 2019 and includes dates from March to August 2020.

Navigating Section 301 Tariff Process

You can’t have a finance report these days and not talk about TARIFFS!  The dizzying series of trade and tariff events over the last few months has pushed the trade war front and center into Harley-Davidson.  How to navigate the Section 301 Tariff process, prepare for any impact etc., is a challenge in of itself.  For the full year 2019, Harley-Davidson now expect impacts of recent EU and China tariffs to be approximately $105 million. This is a $5 million increase from prior expectations and is driven by an increase in Section 301 tariffs, which continue to shift with the breeze as part of global trade negotiations.

It appears that some developed nations will slip towards recession, and governments and companies keep hoping the signs of economic weakness in China would push all the parties to a “deal” table faster.  Harley-Davidson looks to continue mitigating the impact of tariff increases through tariff classification, tariff engineering, first sale, and other methods.  Some of which may have an impact on U.S. manufacturing jobs.
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Q3’19 Press Release:  HERE
Investor Slides:  HERE
Transcript of Q3’19 Financial Call:  HERE
More Roads Plan:  HERE
Hella Mega Tour:  HERE
Section 301 Tariffs:  HERE
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Photos courtesy of Harley-Davidson
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All Rights Reserved (C) Northwest Harley Blog

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Harley-Davidson LiveWire

The Harley-Davidson LiveWire electric motorcycle was officially unveiled in January 2019 at CES.  A lot of marketing hype surrounded the unveiling of the motorcycle with claims of it being the start of “a new focus for the brand that would inspire the next generation of riders.”

Then yesterday, Reuters broke the news that Harley-Davidson had stopped production and delivery (temporarily) of the LiveWire electric motorcycles, after discovering an issue related to the vehicle’s charging equipment. It was reported that the company discovered a “non-standard” condition during the final quality checks of LiveWire, which it already started shipping to dealers in late September.  There were glitches found in the product which has prompted additional testing and analysis.

Interestingly, Webster defines glitches “as a sudden, usually temporary malfunction or irregularity of equipment.”  A glitch like this is not something riders want in a $30,000 purchase!

The LiveWire motorcycle uses a Combined Charging System (CCS), which is a single connector pattern that offers enough space for a Type 1 or Type 2 connector, along with space for a two-pin DC connector allowing charging at up to 200 Amps.  As part of the announcement, the motor company informed current owners to NOT charge the motorcycles through standard home outlets and use only ChargePoint (direct-current stations) charging stations at authorized Harley dealerships to reload the battery.

Well isn’t that “a jolt” of inconvenience?!

For most riders, you’d like to start your day fully charged!  Meaning home charging is normally done at night while you eat, play with the kids, watch TV, and sleep!  There are two Harley-Davidson dealers in the Portland, Oregon metro area that have installed ChargePoint stations.  Finding an alternative direct-current charging station to reload the motorcycle battery on the way to work and then waiting for a couple hours is certainly not ideal.

Charge Locations – Portland, Or. Metro

There are couple of things to know about public charging: the 3 different levels of charging, the difference between connectors and the charging networks.  Riders can go directly to a dealer or try and locate charging stations using ChargeHub.

Knowing your motorcycle’s capabilities is very important and consult the dealer if not understood!

Public Chargers Levels:
Level 1 is the standard wall outlet of 120 volts. It is the slowest charge level and requires tens of hours to fully charge a 100% electric vehicle.
Level 2 is the typical EV plug found in homes and garages. Most public charging stations are level 2.
Level 3 chargers, also known as DCFC or DC Fast Chargers are the quickest way to charge a vehicle. Not every electric vehicle can charge at level 3 chargers.

In general, electric motorcycles are in a phase of adoption known as “the chasm,” (See: Geoffrey Moore’s technology adoption curve) a gulf separating early adopters from the majority of consumers.  It’s a treacherous position in the life of new technology/products, and often determines their success or failure.  One could debate that Harley-Davidson is targeting a market that does not really exist: young, “green” and affluent first-time motorcyclists.

This unattractive “glitch” will be over soon enough, but it does little to promote value creation and owning a Harley-Davidson electric motorcycle.

UPDATE:  October 16, 2019 — An unidentified H-D source tells Forbes:  “This is an issue with the 120v [charging] system, which includes an on-board charger, so it could be a vendor issue with that charger, a wiring harness issue, etc. The point I’d make is that the QC [Quality Control] process worked…there’s an issue, it was discovered before the bikes were shipped to dealers and customers, and I assume it will be fixed.”

UPDATE: October 18, 2019 — TechCrunch reported that Harley-Davidson has resumed LiveWire production.  “After completing rigorous analysis this week, we have resumed LiveWire production and deliveries,” Harley-Davidson said in a comment emailed to TechCrunch. “Customers may continue riding their LiveWire motorcycle and are able to charge the motorcycle through all methods. Temporarily stopping LiveWire production allowed us to confirm that the non-standard condition identified on one motorcycle was a singular occurrence.”

Photos courtesy of Harley-Davidson and ChargeHub

All Rights Reserved (C) Northwest Harley Blog

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Somewhere on CA. Highway 139

Somewhere between Bieber and Sheepshead on CA. Highway 139, you’ll find yourself in the middle of nowhere.

Add to that being kissed with semi-warm September sunshine and you’d be in a place that many of us on motorcycles call happiness.

Sure we could set the cruise control on Interstate 5, but the fun ride to Reno, Nevada for the fall Street Vibrations Rally is coincidently also the shortest route leaving Portland to Eugene (Hwy 58) to Klamath Falls then on OR39 which becomes CA139 through much of the Modoc National Forest and Tule Lake to US 395 into Reno.

Interestingly, OR39 runs through the mixed-up little town of Hatfield.  The California map says it’s in California and the Oregon map says it straddles the state line, which at least in practice, it does.  The actual location of the state line is a bit confused, because Hatfield is an unincorporated community in both Siskiyou County, California, and Klamath County, Oregon.  At any rate, the junction of Oregon Route 39, California State Route 161, and California State Route 139; all three routes terminate at a four-way junction in the community.

If you live in the Northwest you know that the Oregon summer ends and autumn starts for many motorcycle enthusiasts by making the pilgrimage to the 25th annual Street Vibrations Rally.  It’s often the last nice weather ride of the season.  Nothing replaces wind in the face on the Harley-Davidson, a playlist with heavy bass, and a distant horizon when needing a little adventure.  Some may argue that the make and model of the motorcycle doesn’t matter, that the joy comes solely from the open road—frankly, they’re right.

Street Vibrations officially closed on Sunday.  Over five thousand people were expected to attend the multi-day event and from my vantage the number of riders in town for the celebration exceeded that estimate.  There were over 250 vendors with motorcycle gear, food stalls and six stages of great live music!  Most notable was Heartless—a tribute to Ann and Nancy Wilson of Heart and they delivered the sound and spirit of the sisters classic rock-n-roll songs.   Video snippet below:

 

On Friday we rumbled along the 26-mile route from Reno to Virginia City—called Geiger Grade Road—with thousands of other riders who cruised into the historic mining town.  The route offers several curves along a cliff side and views of rolling hills with sagebrush to the pine tree-covered mountains.  It’s a thrilling experience, but the road routinely catches riders off guard and can become an accident quickly.

We soaked up the 81°F day and continued riding the loop to Carson City Harley-Davidson for more motorcycle accessories, themed art, crafts, apparel, music and ended the day back through the Carson (“wind tunnel”) Valley.  Mainstream meteorology suggests that “windy” conditions are anything sustained above 15 miles per hour, but we joked later that our helmets began inflicting what felt like a wind concussion on that segment of the ride.

I-5 Return Route With Cold, Rain and Wind

Speaking of navigating hazards… they are part of everyday life for motorcycle riders—we’re experienced riders, and typically get the local weather forecast before riding. If extreme temperatures are predicted, we might consider a different route and/or a different departure day if it’s practical. It was clear from Friday’s weather reports we’d be riding through less-than-ideal conditions—read MUCH COLDER and wet.  What?  Rain at Street Vibrations!  We enjoyed the 80°F temperatures  Wednesday through Friday, but now fast-moving storm along with a freeze watch was in effect with heavy rain expected Saturday mid-morning and all day Sunday.  In addition, the Oregon passes would receive snow down to 3500 feet and we had at least two major mountain passes to traverse above that altitude.

Postponing our departure wasn’t an option so, we opted to end the festivities early and leave on Saturday and avoid the worst of the early winter storm.

Estimating wind chill is a complex calculation involving ambient temperature and wind speed.  It goes something like:

Temperature’s Influence = ( ( Predicted High Temperature – ( Temperature Base = Your Minimum Acceptable Temperature – ( Predicted High Temperature – Your Minimum Acceptable Temperature ) ) ) / ( Your Ideal Temperature – Temperature Base ) ) * 100 then factor in Wind’s Influence = ( ( Low, High and Gust Wind Speeds Averaged – Your Minimum Threshold For What’s “Windy” ) / ( Your Minimum For What’s “Hazardous” – Your Minimum For What’s “Windy” ) ) * 100 and finally there’s Precipitation Influence, Minimum Visibility and the wildcard algorithm of Road Conditions.  When in doubt always multiple by 100!

If you tracked all that, then you’ve likely developed a customizable motorcycle weather application for the iPhone and already talking a “deal” with the motor company.  I’m not a mathematics wiz, but I know for a fact that warm and comfortable riders have more fun!  Thirty minutes outside of Reno did not fail to disappoint—bringing heavy black clouds, cold torrential rain, hail showers along with snow on the higher elevations of the Plumas Mountain Range.

Riding in the rain doesn’t make me unique—it’s one of the things you do on the road.  Motorcyclist spend the money on riding gear with features or materials to keep warm(ER) and dry.  But, very cold temperatures and the first major rain of the year in Nevada means the oil rises to the top of the highway in a soapy like mess and combined together makes a person go from “Get your motor running” to “Sux2BU” pretty quick.

No one thought we were “cupcakes” just because we didn’t want to ride in the cold/rain/snow.  Fortunately Harley’s heated gear has gotten far more user-friendly over the last ten years and we pressed through the worst of the weather for 560 miles and now have another story to tell.

Arrest Stats for 2019 Street Vibrations.

Photos take by author.

All Rights Reserved (C) Northwest Harley Blog

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UBCO 2×2 Electric Utility Motorcycle

I like watching the proverbial fire and brimstone post-apocalyptic movies as much as the next person (think: Mad Max, Twelve Monkeys, The Book of Eli, I Am Legend etc.,), but the Hollywood creations often incorrectly portray motorcycle transportation with flashy visuals and entertainment over realism.

Speaking about realism, September is National Preparedness Month (NPM) which highlights a time to focus attention on the importance of preparing families and homes for disasters that might threaten our lives and property.  It’s spearheaded by the U.S. government and this year’s overarching theme is “Prepared, Not Scared.”

I’m not sitting here eating peaches from a can and going all Eagle Scout on you, but being prepared when potential disasters occur by developing and practicing a family emergency response plan, assembling a disaster supply kit, signing up for alerts on mobile devices, setting aside emergency savings, and maintaining adequate insurance policies for our homes are important steps for disaster preparedness and valuable for everyone.

National Preparedness Month (NPM)

You’re likely thinking, hey Mac, the Harley is full of fuel, it get’s nearly 50mpg and I’ll just grab my “Bug Out Bag” and hit the road when the time comes.  But, what happens in a major crisis when the fuel production and distribution stalls or ceases?  Meaning Bob,  the local tanker truck driver is going to stop making his rounds to the gas stations and go find his family so no new fuel is distributed.

For that type of scenario a small, efficient electric motorcycle might be a great option — yes, you guessed it — I’m suggesting that you purchase a new $30K LiveWire Motorcycle that Harley-Davidson introduced last month.  Let’s call it the masterfully disguised “Prepper Bike” vs. an urban ride.  I can even envision a Harley-Davidson  marketing campaign to include a free survival knife and bandana when you purchase the motorcycle!

I’m being sarcastic, and was thinking about the UBCO 2×2 electric utility motorcycle.  It can be charged from solar panels in an off-grid location, which offers good range and maneuverability.  It has a lot of interest with those who need to bug out and want to keep a low profile.  Any motorcycle enthusiast who grew up riding the Honda Trail 90, will instantly relate to the 2×2.  The UBCO bike will only do 30mph, but it can carry up to 400 pounds (including rider) and cover 50 to 75 miles per charge. It’s nearly silent, and uses a 2-wheel-drive system for improved off-road performance — a feature that’s reminiscent of the classic ROKON gas-powered utility bikes. The battery packs are removable and interchangeable, so you can carry a spare to double the range. There are even USB ports and a 12V outlet for charging other devices such as your phone, GPS, lights, or tools.  The UBCO 2×2 starts around $7K and a spare 48Ah battery pack is $2K.

A sidebar:  The concept or story behind UBCO started in New Zealand.  UBCO had been actively visiting and investigating the U.S. market when it was contacted by Technology Entrepreneur Bob Ralston.  An investment opportunity was consolidated with Spring Capital in Eugene, Oregon and a dedicated distribution company was established in Eugene.  The idea of a Utility Electric Vehicle (UEV) that would transform the way people ride, work and play rolled out.

Even if uninterested in the EUM (electric utility motorcycle), discover your inner Scout and learn about the 130 Survival uses for a Bandanna that you are likely already wearing!

I’ve said it often, and will say it again: emergency preparedness is valuable for everyone!

Photo courtesy of Ready.gov and UBCO

Preparedness Resources:
Off Grid:  NPM 2019
Ready Gov:  September 2019
Preppers Bandanna: 130 Uses
Financial Preparedness: Finances
Community Preparedness: Neighborhood Prep

All Rights Reserved (C) Northwest Harley Blog

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Customize It And Stand Out

According to Reuters, Harley-Davidson Inc. has laid off 40 employees in Milwaukee at their general merchandise division.

It’s not a large number of employees, but most unfortunate if your career “rug” was just pulled out from underneath you as someone impacted by this reorganization.

Important to note is that Harley-Davidson’s second quarter earnings report, released July 23, 2019 reported general merchandise sales of $64.6 million, a 5.8% decline from 2018. The company saw a 4.2% decline in the first half of 2019 from 2018 in general merchandise.  It’s also no secret that Harley-Davidson continues to see a decline in motorcycles sales in the U.S. and abroad as it works to adapt to changing clientele.

In the Reuters report the motor company stated the general merchandise division re-org was to manage it’s business with “focus and discipline.”  That statement reads like a quote from the Six Disciplines playbook.  Was the division previously an over-committed reactionary one with no focus and discipline?  That euphemistic “focus and discipline” term seems to be more about flattering management because at the end of the day it’s a “reduction in force,” which is an old school straightforward term.

SAVE, SAVE, SAVE

And speaking of general merchandise — have you noticed the significant up-tick of emails from Harley-Davidson corporate or your local dealer?  I follow Harley-Davidson on multiple channels to stay current on their events and product announcements and always get a number of emails, but I’ve seen a dramatic drum-beat increase over the last couple of months.

It’s starting to have a feel of desperation to survive and meet sales quotas.  Here are a couple recent examples:

Motorclothes, Last Chance to Save Up to 50%…
Harley-Davidson VISA…Reap The Rewards…
End of Summer Sale…
Customize It and Stand Out…
Finance Interest Rate Specials…
Schedule a test ride today…
The 2020 Models are here…
Ride into Fall sale…
Performance Workshop this weekend…

Why is email solicitation so popular?  Because it’s a free alternative to tele-marketing and direct-mail campaigns.  The cost of sending an email is minimal compared to the cost of printing and mailing paper and the email “opportunity” goes directly to your inbox for review.

I predict we’ll see more and more sales email as the motor company works even harder to capture and retain our interest.

Photos courtesy of Harley-Davidson email blasts

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