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Posts Tagged ‘Polaris’

2018 CVO Lineup

It’s arrogant at best and obscene at worst.

I’m talking about the CVO pricing that Harley-Davidson management approved for the 2018 models.  Now that we’ve had a couple days to digest the euphoric feeling of the new 2018 models, we’re left with a gnawing and burning sensation in our stomach that even a spoonful of sodium bicarbonate won’t put an end too.

I can’t help but wonder if the new head of design, Brad Richards, who replaced Willie G. after more than 40 years is singing that new Taylor Swift single, “Look What You Made Me Do,” after going full-tilt Goth and dripping black on so many of the new designs.

2018 CVO Street Glide

Unless you’ve won the lotto, you’ll be crunching numbers very late into the night to learn how to squeeze a new Harley CVO into the garage without breaking the discretionary entertainment budget!  They are expensive!  In a small way, we have Polaris to thank for exiting the market with Victory motorcycles and reducing Harley-Davidson pricing pressures.

I’m reminded of the Mylan EpiPen scalping gone wrong in the pharmaceutical industry.  Will we see the motor company deploy industry “experts” to justify the value of overtly expensive models and purport to quantify the net social benefits of belonging to the riding “lifestyle?”  If they do, it’s likely to be based on a complicated economic model and include scholarly speeches, articles, blogs and conferences to lend prestige on the whole “we’re doing everything in manufacturing to keep our prices down” lobbying blitz.

2018 CVO Road Glide

The fact is, Harley-Davidson is a luxury brand cleverly disguised as a blue collar, workin’ man’s brand.

Millions of marketing dollars are spent every year on campaigns to drive home the point that it’s name is synonymous with regular, working class folk.

But, have you seen their luxury price increases on the 2018 CVO models?  Harley-Davidson has exceeded the price range of BMW and Ducati, two brands with a public perception of being expensive toys for the upper-class.

Most of us will never get to experience the CVO results of Harley-Davidson’s labors for ourselves, thanks to prices ranging from $40,000 to $43,000.  Specifically the MSRP pricing is:

2018 CVO Road Glide — $41,399 (not available in 2017)
2018 CVO Street Glide — $39,949 (+$2150 above 2017 price)
2018 CVO Limited — $42,949 (+$1950 above 2017 price)

2018 CVO Limited

I’ve written about Harley-Davidson’s sales and marketing woes.  Much of it outside their control, but we can’t absolve the motor company of any responsibility for these arrogant price hikes.  Harley-Davidson owns this one.  The pricing backlash has already begun across the motorcycle forums and the whole thing leaves a bad taste in consumers’ mouth — of all age groups!

For example, the CVO Limited jumped $1950 from 2017 to 2018.  Beyond paint, there are NO significant upgrades on the 2018 model.  Looking at web pages indicates the only “NEW” item was the addition of a Bluetooth wireless connection module to the stereo.  This may have been as simple as a firmware update to the BOOM stereo system.  Let’s assume it was a hardware addition.  A Cardo bike-to-bike intercom with dual handsfree to connect up multiple bluetooth-enabled mobile phones retail for less than $300.  That would mean the price increased $1650.

Let’s look at the 2018 CVO Street Glide — Harley-Davidson removed the radiator and abandoned water cooled heads as the lowers now have speakers along with another power amp to drive the sound “bubble.”  They’ve provided similarly configured models in the past.  The company added Bluetooth wireless connection to the stereo and created a “NEW” Gun Metal grey paint, however, they jacked the price up over $2100 above the 2017 model.

The CVO Road Glide is a bit trickier to do a price comparison as the last time they offered a similarly stripped down version of the CVO Road Glide was back in 2013 (remember the Cat Whisper paint stripe scheme which was priced at $33,999?) and it was based on the old 110cu.in. engine, old radio and outdated fairing, frame etc.  Harley-Davidson skipped a year and then for 2015 they offered up that behemoth CVO Road Glide Ultra at $36,649 which included all the accouterments which was based on ‘Project Rushmore’ enhancements that other touring bikes received.  It’s not a pure apple-to-apple comparison, but this basically equates to a $7,400 price increase over a 5 model year period.  Which is incredible given the low rate of inflation and manufacturing cost reductions.

Are the financial analysts really scratching their heads wondering why riders don’t line up to lay down these $$ on a motorcycle?

In fairness, Harley-Davidson does make some decent, affordable bikes in their Street lineup.  But they still have a bit of that stigma — which is backed up by most of their current lineup — of putting heritage before innovation and that’s turning some of the riding youth away from the brand.  Harley isn’t as strong a competitor in terms of bang-for-the-dollar with the likes of Triumph, Ducati and the Japanese manufactures.

Even the blue collar, workin’ man who can afford a nice bike will certainly take a look at the local Indian dealer and realize that the competition is making all-American cruisers that indeed have an appeal and nearly every model is priced less than a new Harley-Davidson.

It boggles the mind how according to Harley-Davidson management, the new 2018 motorcycles are less expensive for Harley to manufacture, with simpler frames and more commonality of parts yet they’ve rolled out what looks like an orgy of price scalping.

Photo courtesy of Harley-Davidson

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screen-shot-2017-01-09-at-11-15-09-amPolaris, the MN-based maker of motorcycles and all-terrain vehicles announced today that it’s winding down the Victory brand effective immediately to concentrate on its better-performing Indian Motorcycles business.

Polaris said it will assist dealerships in liquidating inventory and will supply parts for another 10 years and honor warranties in place.  Victory motorcycles are primarily manufactured in Spirit Lake, Iowa.

The first Victory motorcycles rolled out in 1998, yet never took much market share from Harley-Davidson Inc., in the cruiser-bike category. Indian Motorcycles, which Polaris relaunched after a 2011 acquisition, has performed better, however Harley’s market share remains at 48 percent to Indian’s 3 percent.

Polaris Industries Chairman and CEO Scott Wine stated, “This decision will improve the profitability of Polaris and our global motorcycle business, and will materially improve our competitive stance in the industry. Our focus is on profitable growth, and in an environment of finite resources, this move allows us to optimize and align our resources behind both our premium, high performing Indian Motorcycle brand and our innovative Slingshot brand, enhancing our focus on accelerating the success of those brands. Ultimately this decision will propel the industry-leading product innovation that is core to our strategy while fostering long-term growth and increased shareholder value.”

Photo courtesy of Victory/Polaris.

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Saddlebag Drawing

Saddlebag Sketch

This is more than a simple saddle bag retaining clip that takes less than 10 minutes to replace.

Harley-Davidson is facing steep competition.  Not only from less expensive motorcycles imported from Asia, but electric motorcycles from Zero, Brammo (now owned by Polaris) and also from core customers who look for a mainstream gasoline cruiser from Indian and Victory.  Polaris will undoubtedly be first to market with a chrome-plated electric cruiser given the previous discussion by CEO Matt Levatich.

In addition, it’s not clear that Harley-Davidson is getting much of a sales bump from the decision to double-down on support of outlaw biker gangs as part of their marketing pitch.  The hard-edge reference is NOT about the one-percent patches, rather licensing support of TV shows like Sons of Anarchy (SOA) and other Hollywood fluff.  Trying to appeal to people who don’t have much adventure in their lives with a TV show prescribing on the road escapism… well it escapes me!   Meanwhile they try so hard to alienate and re-write the Baby Boomer chapter!

But I’ve digressed.

Harley-Davidson reported slipping revenues for Q2 2015.  U.S. market share is below 50% for the first time ever!  The company is betting on its name recognition and motorcycle quality.  They even choose to muster up some brash swagger and declined slashing prices as a subtle way of saying “our bikes are better!”

And on that quality topic, Harley recently issued a saddlebag recall – campaign number 15V-427.  The motor company is the poster child for the “land of recalls” sans Chevy.  So many, that owners find it difficult to recall when their bikes didn’t!

Snarky comments aside, all manufactures have issues, but Harley-Davidson is unique in acknowledging and using quality as a key differentiator and strategy for increasing sales.  I’m not sure how well that will work for them.

Meanwhile the Dealers are replacing the 4 (2 on each side) saddle bag pin retaining clips free of charge. The motor company issued a recall stating that the saddlebag mounting receptacle, P/N 10900009 on some model year 2014 and 2015 Touring family vehicles (see drawing #1 above) may not adequately secure the saddlebag to the motorcycle during use.  If this condition remains undetected, the saddlebag may become separated from the motorcycle while it is in motion, possibly creating a hazard for other motorists including your riding buddy’s in formation behind that “separated” bag.

If this happens there is a good chance you’ll be picking up a new “road rash” painted saddlebag and dirty laundry strewn across the roadway!

UPDATED: July 23, 2015 (1:40pm PDT) — the recall effects 185,000 motorcycles which covers certain 2014 and 2015 Road King, Street Glide, Electra Glide Ultra Classic, Ultra Limited, Police Road King, Police Electra Glide and CVO Ultra Limited bikes. Also affected are 2014 CVO Road King and the 2015 Electra Glide Ultra Classic Low, Ultra Limited Low, Road Glide, CVO Street Glide and CVO Road Glide Ultra motorcycles. No injuries or crashes have been reported due to the saddlebag issues and no information has been provided on the number of “separated” bags.

UPDATED: July 29, 2015 — Polaris introduces its 2016 line up which includes the Victory Empulse TT ($19,999), an electric model which rolls out way ahead of H-D’s LiveWire.  It’s based on the Brammo Empulse R motorcycle produced by the electric motorcycle division of Brammo Inc., which was acquired by Polaris earlier this year.

Photo courtesy of H-D.

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The 2015 Road Glide

The 2015 Road Glide

Harley-Davidson officially “revealed” the 2015 Road Glide this morning along with an updated web site with some additional details.

The “reveal” is a peculiar twist given that we’re a few weeks away from the typical new model launch window.  Here is the corporate press release announcing the 2015 Road Glide.  I’m sure it’s just the first stage of a lot of hype and media buzz planned for the traditional post-Sturgis announcements.

Or being a bit skeptical of marketing motives… maybe this H-D reveal is simply a tactic to take away some of the headlines from the 2015 PolarisIndian and Victory news?

2015 Road Glide Inner Fairing

2015 Road Glide Inner Fairing

Back to the Road Glide.

There are two models.  The Road Glide and Road Glide Special.  Both models include the same specifications from Project RUSHMORE that is currently available on 2014 touring models.  There is the air-cooled, high output Twin Cam 103™ with integrated oil cooler mated to a 6-speed cruise drive transmission, the new Reflex anti-lock braking system (ABS) with dynamically, electronically linked brakes for optimum braking in all conditions.  Both Road Glide models include the redesigned saddlebags for a sleeker look and added new latches that you can operate with one hand.

The 2015 Road Glide Fairing

The 2015 Road Glide Fairing

The 2015 Road Glide Special is basically an elevated experience of riding that includes the new Boom Box 6.5 infotainment system which features a 6.5″ full color touch screen display and it can be operated by convenient new hand controls or by voice command.  It also includes display color options: Orange (default), Blue, Brown, Green, Gray, Purple, Red.

There’s a new handlebar on the Road Glide motorcycle for 2015 that makes the riding position more comfortable for a wider range of riders and the hand grips are now 5 1/2″ closer to the rider.  There is also new gauges which has a 10% larger speedometer and tachometer with 68% wider numbers; 28% larger fuel and volt gauges with 30% wider numbers.

Most distinctive is the new triple-vented fairing that opens and closes to equalize pressure in front and behind the windscreen.  Lastly there is the new dual Daymaker LED headlamps providing better nighttime riding visibility.

I’ll be interested to experience how easy it is to reach and adjust the infotainment system.  Previously anyone under 6 feet tall could have an issue reaching up to the radio system.

I’m looking forward to seeing the new 2015 Road Glide at the local dealer.

Note:  If you’re tracking or curious how accurate any of the previous blog posts were:  Road Glide spy photos HERE.  Early 2014 Road Glide speculation HERE and HERE.

Photos courtesy of H-D.

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photos_large_5Don’t get your underwear wrapped around the axle with that title.

“Off the reservation” is a common phrase, which many people use without considering the context of its original meaning. Namely, that Native American peoples were restricted to reservations created by the U.S. government, and their freedom was severely limited by the terms of the treaties they were often forced to sign.

I’m using it in its literal sense (to deviate from what is expected) and as you might anticipate it’s a reference to Indian motorcycles rampant sales and intractable competition versus the Harley-Davidson Motor Company.

Harley-Davidson posted flat sales for Q2 2014, yet Indian/Polaris posted higher revenues for the second quarter 2014 at $1.01 billion, reflecting an increase of 20% over last year’s second quarter sales of $844.8 million.  Polaris stated that sales at its motorcycles division soared 107% year-over-year to $103.1M in large part due to strong demand for the new 2014 Indian motorcycles.  Clearly they have deviated from what was expected.  One could debate that given Polaris motorcycle revenue is much smaller than Harley’s, it’s easier for them to hit double digit growth numbers, but that would be down playing the strong demand for the Indian products.

Additionally, Harley-Davidson stated its share of the market for new heavyweight motorcycles with engines of 601 cubic centimeters or greater slipped to about 50% in Q2 2014 from 53% a year earlier.  Another indicator that competition is weighing on the company.

Financial calls with terms like ‘diluted earnings’ and ‘operating efficiencies’, don’t mean much to riders and it’s not like Harley-Davidson is hurting.  But, it’s good to see Indian doing well with North American retail sales up 15% year-over-year in the second quarter.

Congrats!

Full Disclosure:  I’ve got a riding buddy who traded his H-D Street Glide in on a new 2014 Indian back in January and loves it.  There is no dealer in Oregon yet and he went to the extra effort of buying it from a Seattle dealer.

Photo courtesy of Indian/Polaris.

All Rights Reserved © Northwest Harley Blog

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The heavyweight motorcycle market is approximately a $4 billion market.  Harley-Davidson is the market segment share leader with 2010 revenue of $3.14B.

Last week Polaris (CEO – Scott Wine) announced the acquisition of Indian, the nation’s oldest motorcycle brand. Indian’s best-selling model, the Chief, became known for the Red Indian logo on its fuel tank.  After twice filing for bankruptcy the manufacturing of Indian motorcycles restarted three years ago in Kings Mountain, NC.  The terms of the acquisition from British investment firms Stellican Ltd. and Novator Partners LLP were not announced, but given the strong brand portfolio of Indian I’m sure it didn’t come at garage-sale prices!

Polaris entered the heavyweight motorcycle market about 12 years ago and of the Polaris $2B in annual sales, about $82M comes from Victory motorcycles.  The Indian brand will help the company build on the Polaris’ presence in the market and directly compete with Harley-Davidson in the heritage brand sub-segment with its classic style.

Clearly the motorcycle landscape is changing and if you need further evidence just look at the recent announcement by BMW Motorrad who saw a 12.3% growth in the last financial year and sold 110,000 motorcycles.  They announced that Hero Motors (India company), as the sole supplier who will provide gearboxes for BMW’s motorcycles.  Not only are they the supplier, but Hero provided the engineering and developed the advanced technology for all BMW transmissions.

According to this Sioux City Journal article,  the U.S. production of Indian Motorcycles will shift to Polaris Industries’ Spirit Lake plant later this year.  Polaris is based in Medina, Minn., and they will close the existing Indian manufacturing plant in Kings Mountain in the next two to three months.

Photo taken at and courtesy of Indian booth.

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Riding Through Death Valley

You might not know, but the Laughlin River Run in Laughlin, Nevada is also the location of the first giant coal-fired power plant (Mohave Generating Station) to shutdown.

The closure created economic distress to the Navajo Nation, which supplied coal to Mohave through a slurry line at the Black Mesa Mine.   The motorcycle rally hangs on the skirts of the Colorado River and features large numbers of motorcycle enthusiasts wandering through vendor booths, casinos/resorts all setting next to the river’s edge.  I’m working on a detailed post for the ride down, but thought I’d post up a brief summary on some of the highlights:

  1. Our morning departure out of Portland found rain coming down in sheets and the wind blew like a hurricane.
  2. At one point it cost $24 to fill up a five-gallon Harley.
  3. My first motorcycle ride through Death Valley.
  4. The ‘River Run’ had all the built up energy for a spring rally, but the vendor “cha-ching” wasn’t quite as loud as in some years.
  5. Walked into the Aquarius Casino Resort and had no problem getting rooms without reservations.  Lucky?
  6. Room rates were 5X the typical standard pricing ($39.95 vs. $199.95/night).  Anyone who has made it through Econ 101 knows that the scarcity of a commodity drives its value, but this clearly qualifies as gouging (yet we paid it?!).
  7. The large presence of the Mongols MC members at the Aquarius made for some interesting moments entering/exiting the hotel.
  8. The Aquarius temporarily restricted access to the casino floor Saturday night at the height of the River Run, however, they deny rumors that the restriction had anything to do with the presence of “outlaw” motorcycle clubs.
  9. There was a large, well armed and highly visible Las Vegas Metropolitan Police presence at the River Run.  No major problems were reported.
  10. On Friday, April 29 we witnessed a 45mph+ sustained wind storm.  Number of show-class motorcycles damaged by flying debris.
  11. H-D was absent from one of the largest west coast rallies and relinquished customer goodwill to Polaris and Yamaha.  Why?

We’ve had so much nasty weather in Oregon during April that I’m confident about anything May throws at us will be better.

Photo taken on trip in Death Valley.

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