Harley-Davidson Explores The Unexpected

Harley-Davidson® Pan America™ motorcycles

A lot has been written in the motorcycle media with photos of high mountains, plateaus, deep forests, beaches along the Pacific coast, fantastic riverbeds and deep mountain lakes that provide an epic backdrop for an exciting motorcycle launch.

Of course, I’m talking about what has been labeled the “real deal”—a highly capable, uncompromising large-displacement Adventure bike—the Harley-Davidson® Pan America™ motorcycle.

Harley-Davidson® Pan America™ motorcycle

Journalists cheered… remotely of course.  There were tears and applause, then more tears as the press fell apart during the historical motorcycle launch. Even Jochen Zeitz, chairman, president and CEO Harley-Davidson, made a cameo as a film actor riding — yes, RIDING — an actual motorcycle.  It was in the scenic landscape of Kenya, Africa no less.  The narrative is how he traveled to the vast wildlife preserves to lasso the twin Adventure Motorcycle and bring it back to America!

It’s the new AMERICAN adventure touring motorcycle that the motor company wants you to grab a tent stake, a Jetboil camping stove and join in on the outback camaraderie. Even the NY Times marked it as a “New Era” for Harley Davidson.

Not only were journalists drooling to throw a leg over the new Adventure Bike, Harley executives were exuberant for “knobs and tread blocks” to throw some dirt on the competition and share with the world what they’ve teased out for several years now. In this under two minute video you even get to meet workers from the H-D factory in York, Pennsylvania — the talented folks who assemble the new motorcycles. It’s pretty cool!

You might recall the new Adventure (ADV) model was revealed during an onslaught of online-presentations, keynotes and of course streamed worldwide across every social channel platform. It also included Jason Momoa (“Aquaman” actor) talking about his epic riding adventures.  Because who can’t relate to a Hollywood produced video of a multimillionaire actor’s motorcycle experiences? If you missed the initial launch you can replay it HERE. Or if you have time at work and want to watch a 25-minute video with dramatic musical overdubs about how this isn’t Harley’s first dirt rodeo check it out HERE.

I’m not sure about you, but I’m challenged to recall the last time I shipped a motorcycle overseas and tasted the bright red African soil on Kenya roads humming the tunes from the soundtrack of the Disney’s “Lion King.”

But, I’ve really wandered off the trail.

BMW R1250 GS

In this post, I’m NOT going to pontificate on the tsunami of Pan America jaw dropping impressions. I’ve previously posted on the Pan America engine HERE.  I promise that I’ll cover the Pan America motorcycle spec sheet in a future post.

I want to review the BMW Group with its four brands BMW, MINI, Rolls-Royce and BMW Motorrad. Harley-Davidson is going up against the world’s leading premium manufacturer of automobiles and motorcycles.

For nearly 3-years, (since early 2018), Harley-Davidson has been “pissing” on BMW Motorrad’s parade without the courtesy of calling it rain!  Using a drip, drip, drip teaser marketing strategy, while pre-broadcasting their intent to enter the Adventure motorcycle segment.  The same segment that BMW Motorrad owns. It’s important to note that BMW achieved it’s 2nd BEST sales result in company history in 2020 and doing so during a world-wide pandemic!  Sales stats are below.

BMW R18

After a couple of years listening to Harley’s ADV bluster, BMW launched their own salvo at Milwaukee with the new BMW R 18: a nostalgic touring and supreme cruising motorcycle. BMW borrowed from the famous R 5 models for both technology and visual impact, shifting the focus back onto the motorcycle essentials: purist, no-frills technology and the most powerful “Big Boxer” engine (1802 cc) as the epicentre of riding pleasure. This happens to be Harley-Davidson’s wheel-house.  The motorcycle features and stats are impressive, but equally important is the BMW collaboration with Roland Sands Design, Mustang seats and Vance & Hines exhaust systems.

Will the blue-and-white roundel aggressively defend its Adventure segment sales crown?  You bet, because BMW appeals to a youthful and more dynamic consumer and making money is important to any business.  But, lets get one thing out there on BMW immediately; I’ve encountered numerous riders who claim they used to own BMWs but switched brands due to the absurdly high cost of everything—parts, service and the motorcycles themselves. We could debate that Harley-Davidson follows the same premium parts, service and motorcycle strategy too.

BMW R 1250 GS Adventure – Edition 40 Years

Clearly 2020 was a tough year for the motorcycle industry, but let’s double-click on BMW.

BMW Motorrad delivered 169,272 BMW motorcycles and scooters to customers. However, the German brand sales dropped in 2020 (the first in nine years), which they considered a positive result considering the pandemic circumstances. The Bavarian press team is busy spinning its 2020 motorcycle achievements with market launches of thirteen new models and sales figures being the second-best sales (previous best year: 175,162 vehicles) result in BMW Motorrad’s history (which they are), though the success varies greatly by region.

BMW R18

In Europe as a whole, BMW Motorrad saw its sales volume drop by 5.3%, though Germany (27,516 units) and France (17,539 units) both had record years for motorcycle sales, posting 4.7% and 1.4% gains respectively. Those gains were offset by significant losses from Italy, Spain, and the UK/Ireland. BMW Motorrad didn’t provide the 2019 figures for these countries, nor their percentage drop, in its 2020 sales press release, but scrapping the internet and through mathematical deductions in my HP 12C, these sales numbers follow percentage decreases: Italy (-10.7%), Spain (-12.5%), and UK/Ireland (-23.9%).

We also know from past reports that the BMW R 1250 GS and R 1200 GS models claimed top honors as the bestseller in the lineup and the company is market share leader in the Adventure segment. In terms of motorcycle models, the GS is supreme, with over 59,000 units of the company’s boxer-twin ADV bike (R1200GS / RS1200GSA) sold in 2019. You read that correctly.  Just one model with two variants accounts for one-third of BMW Motorrad’s sales and in the U.S. it accounted for around 7.6 percent of BMW’s global motorcycle sales.

Oh, did I neglect to mention the BMW racing crew with first podium finishes in the FIM World Superbike Championship (WorldSBK) and the successful entry into the Endurance World Championship (FIM EWC) with the new BMW S 1000 RR?

And, I haven’t even started comparing the Ducati Multistrada V4 S Sport, KTM 1290 Super Adventure, Honda CRF1100L Africa Twin or Triumph Tiger 1200 lineup.

You’re likely thinking about now… Mac, you’re just one of those doubters.  That’s fair, but after reading a significant number of top tier media reports, watching a fair amount of YouTube interviews with motorcycle magazine writers, I have just one question. Why did so many riders/writers have unplanned dismounts?  Several of the riders laid down their 574 pound Pan America on the sandier trails during testing at that remote camp in the Mojave Desert, about 100 miles north of Los Angeles.

Did a year of the pandemic downtime diminish their riding skills or is it the motorcycle?

Harley has been enjoying about half of all new motorcycle sales in the U.S. over 600cc, but I remain a bit skeptical that the motor company can enter a new market segment where the Bavarian manufacturer dominates even with how good the Pan Am motorcycle is right out of the crate!

I hope to test ride the Pan Am soon.  Today, I’m having an expresso, but tomorrow I could be heading out on the TransAmerica Trail.

Photos courtesy of BMW Motorrad and Harley-Davidson.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Harley-Davidson Announces New Movie Telling Origin Story Of Adventure Motorcycles

It’s real, and it’s spectacular. Fastest I’ve ever clicked “buy.”

Wait! Not so fast. What are you talking about Mac?

Today was historic. The original film starts out greeting thrillseekers, music lovers and conversationalists all across the frozen plains.

You had me at; “You’re here by the grace of your lineage.”

But, I’ve wandered off the main trail.

Our “movie hero,” Jochen Zeitz, chairman, president and CEO Harley-Davidson, was an actor riding — yes, RIDING — an actual motorcycle.  That in of itself might be a first?!  There he was in the scenic landscape of Kenya, Africa no less.  Traveling to the vast wildlife preserves to lasso the FIRST twin Adventure Motorcycle and bring it back to Made in America!

Nothing to see here Buell owners.

The emotional exhaustion of this past year must have gripped Mr. Zeitz’ soul, as he peered out onto the Segera Retreat, where a herd of zebra graze, swishing their tails in unison to keep the flies away.  Where a long giraffe at the outer edges of the garden keeps him company as he ploughs through a lengthy to-do list waiting for the Milwaukee employees to wake up.

Today Mr. Zeitz must be just thrilled of simply being alive and to share his wisdom with the motorcycle adventure world.

At the film preview, Journalists cheered… remotely of course.  There were tears and applause, then more tears as the press fell apart during the historical Harley-Davidson Pan America launch today.  Harley-Davidson told a syrupy sympathetic story with dramatic musical overdubs on how the motor company always made off-road bikes. The film narrator described that this isn’t Harley’s first dirt rodeo. You might recall, that back in the 1960s and 70s, Harley offered a variety of small dual-sports, and even briefly got into the motocross game. Harley filled the gap in their lineup by purchasing the Italian motorcycle manufacturer Aermacchi. Not too long after, Harley gave up on the idea of small dirt bikes and sold Aermacchi, which eventually became the company we know today as Cagiva.

It’s fairly evident that the motorcycle press has become nothing but “exhausting love letters to consumerism.” I’ll save my cynicism as a more legitimate response to a product launch once I have a chance to fully review the stats vs. just post another emotional reaction.

We all know that Harley-Davidson is trying to break into the popular adventure motorcycle scene with the 2021 Pan America 1250 and Pan America 1250 Special. The motorcycle and dealer network will compete with some of Europe’s top players, including the BMW GS 1250, KTM 1290 Adventure, and the Ducati Multistrada V4. Harley-Davidson pricing begins at $17,319 for the base model and $19,999 for the Special. The models will arrive at Harley-Davidson dealerships in spring 2021.

For me, it was an immense privilege both physically and spiritually to witness the Pan America launch via film/video. #sarcasmalert

Image courtesy of YouTube: Harley-Davidson Original Film (25:45 minutes)

All Rights Reserved © Northwest Harley Blog

Read Full Post »

The H-D 21 Virtual Launch

H-D 21 Virtual Broadcast

The H-D 21 virtual broadcast was an all digital event to announce new 2021 motorcycles, parts and accessories.

The new model launch yesterday came less than a year after the motor company reported plans to streamline its product portfolio by 30% while overhauling its launch timing (historically every August) and go-to-market practices for maximum impact.

As soon as the media, dealers and consumers logged into the Harley-Davidson online portal, I knew this year’s product launch was going to be … different.

The event opened with a long video montage on the joys of the motorcycling experience.  I watched Jason Mamoa gush about his Harley family, or “Ohana” — you’ll remember him as Aquaman.

As someone who has served time in the trenches creating marketing campaigns, this was the traditional entertainer-as-a-promotional vehicle initiative.  The idealized figure introduced Harley-Davidson CEO Jochen Zeitz who teased the audience with a number of motorcycles and projects that he apparently can’t speak about yet.

Huh?

As the motorcycle launch wore on, with a selection of motor company smooth-talking prognosticators from various departments sharing bits of information about updates to Cruiser, Touring and CVO models, the value of an all-virtual Harley-Davidson product roll-out actually became less clear. The new products, which we usually look forward to, felt less exciting. It’s hard to determine the viability of any product by watching a slick video about it in a browser. The discussions about the Harley-Davidson future of motorcycling felt less like revelatory conversations and more like a TED Talk that I’d scroll past in my Twitter feed.

For me the serendipity of discovery was gone. One of the most exciting parts of a product launch has been finding out about something or learning about something new through pure chance. At a virtual H-D 21, that’s a virtual impossibility.

Street Bob 114

But, I’ve digressed.

Cruiser Updates
Harley stated that the Street Bob 114 is the lightest Softail model to be equipped with the Milwaukee-Eight 114 engine. The legendary Fat Boy receives refreshed styling for 2021, getting brilliant chrome instead of satin chrome on the engine and exhaust, the front end, the rear fender struts and console.

Touring Models
The 2021 Touring lineup includes three baggers that feature the Milwaukee-Eight 114 motor: Road King Special, Road Glide Special and Street Glide Special. The Street Glide Special and Road Glide Special get new two-tone paint options, and a choice of a blacked-out or bright chrome styling treatment – a choice between dark and sinister, or brilliant and more traditional.

Fat Boy

Road King Special and Street Glide Special models get a new brilliant Daymaker LED headlamp. All Harley-Davidson Touring models that are equipped with the colour touchscreen Boom! Box GTS infotainment system that now have Android Auto and Apple CarPlay compatibility. The feature requires a wired connection to a smartphone rather than going through Bluetooth.

CVO Models
Custom Vehicle Operations (CVO) motorcycles are the poster child for Harley-Davidson’s styling and performance. The Milwaukee-Eight 117 V-Twin engine is exclusive to CVO models as standard equipment. For 2021, the CVO Street Glide and CVO Road Glide models receive all-new Harley-Davidson Audio provided through an exclusive partnership with Rockford Fosgate.

CVO Limited

The audio systems, featuring speakers and amplifiers, were designed specifically for Harley-Davidson motorcycles. These components will also be made available through Harley-Davidson Genuine Motor Parts & Accessories for 2014 and newer Touring models equipped with a Boom! Box infotainment unit.

The 2021 CVO models (CVO Street Glide, CVO Road Glide, CVO Limited and CVO Tri Glide) all feature new paint options and styling features. All four CVO models are also equipped with RDRS safety equipment, including Cornering Enhanced Electronic Linked Braking, Cornering Enhanced ABS, Cornering Enhanced Traction Control, Drag-Torque Slip Control, Vehicle Hold Control, and Tire Pressure Monitoring System.

Pan America 1250

Pan America Global Reveal
The upcoming and over exposed Pan America 1250 adventure tourer was previewed in the virtual launch broadcast, but the most important details weren’t provided as it’s official launch is set for February 22nd. Mark your calendar and register for the event HERE.

It will be interesting to compare how this virtual launch broadcast performs in attracting potential motorcycle buyers and if it will drive demand for products or make an emotional connection to the Harley-Davidson brand.

It’s been my experience that: “People don’t buy “what” you do, they buy “why” you do it.”  — Simon Sinek

Photos courtesy of Harley-Davidson

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Harley-Davidson Q2 2020 Financial Results

Jason Momoa (i.e. “Aquaman”) collaborates with Harley-Davidson

How often have we recently heard… “We continue to face challenges during these unprecedented times.” — Harley-Davidson CEO Jochen Zeitz opening statement during the July 28, 2020 financial call.

I’m not a grammar nerd, but “unprecedented times” is a tiresome word.  Stop saying it Mr. Zeitz – and it’s also inaccurate!

We are not in an “unprecedented” time.

This isn’t the 1930’s Great Depression, the worst economic downturn in the history of the industrialized world. There’s been no dot-com bubble (i.e. Internet bubble) that was caused by excessive speculation in Internet-related companies in the late 1990s. It’s not the real estate bubble of 2008 and the follow-on market crash, recession and unemployment that was linked to the “subprime mortgage crisis.” There is no automotive industry crisis of 2008–2010 where declining automobile sales and scarce availability of credit led to General Motors, Chrysler, and Ford facing insolvency without major government intervention. It’s not the 1918 flu pandemic, which killed 675,000 Americans and the worldwide death toll was estimated at 100 million. One pandemic death is too much, but the COVID-19 deaths are currently nowhere close to that, thankfully.

Q2 2020 HOG Earnings Report

So, stop using these new most-hated sayings: “unprecedented” times, it’s the “new normal” and “we are in this together” mantra.

And, who’s the “we” here? The point is “we” are not all on the same team in this pandemic. Everyone is dealing with it in their own way. The restaurant employee who’s been unemployed for months isn’t in this together with a Fortune 500 CEO.  The nurse on the front-line treating pandemic patients isn’t in this with the marketing manager who can work from home.

It’s not “unprecedented” for me to rant about something while being largely sequestered at home for nearly five months. But it is what it is, I guess.

Back to the Q2’20 financial call… and some key comments made during the call:

• The Harley-Davidson culture has suffered. The company has seen five consecutive restructuring’s every year in order to basically chase the downward trend in sales.
• “The Rewire” strategic vision is now being replaced by “The Hardwire.” (more on this at the bottom of the post)
• Extending the 2020 model year through fall (historically launch was late August) and now new bikes will arrive in dealer showrooms early 2021.
• Used motorcycle pricing increased about 6% throughout Q2, certainly, higher than Harley has seen in any previous quarter.
• Harley continues to see strong potential in Adventure Touring and will launch Pan America globally in 2021.
• Harley has streamlined the structure, which now requires approx 700 fewer positions and approximately 500 employees laid off.
• H-D is not willing to sacrifice the strength of their legacy in a quest for pure volume growth going forward.
• Increased recognition on the role of digital technology as a critical priority in the future for Harley-Davidson.
• H-D will focus on roughly 50 primary markets that generate the vast majority of their retail sales and shipments.
• Surprise!  Planning to add a Sustainability Officer to the team who will further H-D commitment to the planet and to society.
• New brand building approach and social media campaign directed by “Aquaman” i.e. Jason Momoa (video of Mr. Momoa touring H-D Museum)

Q2’20 Numbers:

• Harley-Davidson posted a loss of $0.60 per share for Q2’20
• Worldwide retail sales of new motorcycles were down 26.6% versus prior year and Q2 revenue of $865 million was down 47% year over year.
• U.S. retail sales in Q2’20 were down 26.7% versus prior year.
• EMEA declined 29.8%, Asia Pacific was down 10.2%, and Latin America saw declines in Mexico and Brazil and finished the quarter down 51%.
• U.S. market share of new bike registrations was 38.5%, down 8.1 percentage points
• Motorcycle mix shifted from touring to cruising versus Q2’19, which reduced average motorcycle revenue per bike.
• Credit losses were down due to lower delinquencies and lower repossessions helped by H-D offering of payment extensions to certain customers.
• While Q2 results were again terrible, Harley-Davidson was still able to sell over 31,000 motorcycles in the U.S. during a global health crisis that closed off its retail stores.

During the financial call, Mr. Zeitz announced Harley will have yet another roadmap to follow: “The Hardwire,” the motor company’s third visionary plan in two years.

You might recall “The More Roads to Harley-Davidson” plan unveiled in July 2018 which stated the development of 100 new models over 10 years, giving more attention to international markets than in the U.S. market, and putting a much greater focus on electric vehicles.

That plan was largely abandoned earlier this year when then CEO Matt Levatich abruptly left the company and was replaced by chairman Zeitz. The “More Roads” was replaced by the vague and loosely defined “The Rewire” plan, which incorporated some of Levatich’s plan, but would instead focus more on key markets and products to drive the bike maker’s profitability and growth potential.

Now we can look forward to a new 5-year strategic plan; “The Hardwire,” which will be grounded in enhancing the desirability of Harley’s brand and protecting the value (i.e., keep pricing elevated) of the iconic products.” The Hardwire roadmap is expected to take over in the fourth quarter and serve as the strategic plan for the company to follow through 2025.

Photos courtesy of Asphalt & Rubber and Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

Read Full Post »