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2014 Road King

2014 CVO® Road King® FLHRSE

“Life is like that.  There’s always more, always a reveal.”  — Cheryl Strayed (Book Author – “Wild”)

During this week’s launch of the new 2014 models, Harley-Davidson stated it has made a monumental shift in the product development approach with Project RUSHMORE.  There was very little in the way of specific or actionable detail about that new development process.

This absence of any detail is most intriguing.

Shouldn’t the motor company share some insight about their cutting-edge manufacturing processes or renewed focus on quality that will provide an even greater market advantage or leave little competitive oxygen?  Sure, they’re using “chrome dipped” marketing words to describe the core ingredient of a new customer-driven product development effort, but in building a better mouse trap it’s a bit abstract to state that the motor company is working with motorcycle enthusiasts to do a better job of bringing their insights and needs to new motorcycles.  What’s different now versus previous years when they listened and collected rider feedback?

And speaking of new motorcycles, the CVO models launched for 2014 are:

  • CVO® Road King® FLHRSE
  • CVO® Electra Glide Ultra Limited® FLHTKSE
  • CVO® Softail® Breakout FXSBSE
  • CVO® Softail Deluxe FLSTNSE
2013 CVO® Road King® FLHRSE

2013 CVO® Road King® FLHRSE

Let’s take a closer look at the first one on the list, the new 2014 CVO Road King.  I’ve got a riding buddy who purchased a 2013 CVO model and I’ve been around this style motorcycle a good bit on various rides.  I’ve also been a long term rider/owner of a Road King and can state it’s a nice bike!  One of the key selling points (print and online) for the 2013 CVO Road King was the high-performance audio system.  It was a FIRST on a non-fairing motorcycle and included a 200 watt amplifier to drive speakers in the fairing lowers in front and the saddlebag lids behind.  A cocoon of audio on a Road King!

The first thing I noticed in looking over the stats of the 2014 CVO Road King is that MSRP dropped $1500 from the previous year.   The 2013 is $29,999 and the 2014 is $28,499.

Huh? 

On average, pricing on 2014 models went up 3.5% (yr/yr) and reductions in price rarely happen unless it’s technology/PC related.

The mainstream motorcycle media and press picked up on the Road King price reduction.  But, it was reported as if some kind of magical process appeared at the Harley-Davidson factory and reduced the price.  I’ve scanned numerous reports and NOTHING was written about the – big reveal – fairing lowers and front speakers were removed.  Along with the saddlebag speakers.  And that 8GB iPod – gone.  Or how the 200W high-performance audio amp was removed along with the handlebar controls. 

I’m not trying to be snarky, but did Project RUSHMORE (that new customer-driven product development effort) provide rider feedback that CVO Road King riders felt choked by the lack of bag space on road trips?  Were Road King riders depressed about the lack of space?   Did the CVO Road King owners tell the motor company that it was too difficult to operate the audio system?  Should non-fairing motorcycles be about wind in the face and never have an audio system period?  It would be very interesting to know the facts and what feedback translated into the re-engineering and removal of the audio system.   I suspect that rider feedback had little to do with this decision.

When the 2014 Harley-Davidson marketing collateral states “the road trip will never be the same” they truly mean it for the CVO Road King owners!

Photos courtesy of H-D.

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2014 Ultra Limited

2014 Ultra Limited

At the Harley-Davidson dealership meeting in Denver this morning, the company introduced eight new motorcycles for 2014. 

Proclaimed the largest new model launch in the company’s 110-year history, the eight new motorcycles feature improved power and braking performance, enhanced rider ergonomics, and styling updates.  The eight new models are the Road King®, Street Glide®, Street Glide® Special, Electra Glide® Ultra Classic®, Ultra Limited, Tri Glide® Ultra, CVO Ultra Limited and CVO Road King®.

2014 StreetGlide

2014 StreetGlide

All these motorcycles fall under a new product development moniker (“Project RUSHMORE“), announced about four years ago, with the intent to bring new bikes and features to the marketplace faster.  The key areas of RUSHMORE are:

Control:  The motorcycles will pass faster, stop quicker and allow riders to see farther at night.  Some models feature the new Twin-Cooled™ High Output Twin Cam 103™ while others get the new High Output Twin Cam 103™ powertrain – both with fuel injection.  Reflex™ Linked Brakes with ABS (Anti-Lock Braking System) is new for all models and the new Daymaker™ LED is also standard on some models while others get new Dual Halogen lighting.  The Linked braking, means braking with the front and rear wheels is synchronized and the system will automatically calculate the amount of braking that’s necessary under the existing conditions.

Infotainment: The Boom! Box infotainment systems feature voice recognition and touchscreen for music, GPS navigation and phone in motorcycling, with audio, Bluetooth® connectivity, text-to-speech technology, plus support for intercom and CB communications in a single module.  H-D integrated the vehicle information in a single electronic touch screen.  There are five-way joy sticks on the left and right motorcycle hand controls for most of the system’s functions.

Feel: Aerodynamics and ergonomics are improved – with a new Batwing fairing with splitstream venting, which reduces head buffeting and with wider and deeper seats and new back and arm rests.  The motorcycle hand controls have been redesigned, and the number of dash gauges have been reduced from six to four — with temperature and oil pressure readouts moved to the electronic screen and the gauges made larger for better visibility.

Style: The function of several components are improved such as the larger Tour-Pak® and saddlebags with convenient One-Touch latches, sleeker fenders, lighter cast aluminum wheels and intuitive hand control switches.

Other changes in the 2014 lineup include anti-lock brakes on all five Sportster models, a new CVO Softail Deluxe that comes with a detachable windshield with GPS navigation, Daymaker LED lighting and detachable saddlebags.  Also, the Twin Cam 103 engine is now standard equipment on the Street Bob and Super Glide Custom models.

On the surface the changes look positive and bring H-D more in alignment with the competition.  It’s peculiar that the motor company goes to great lengths to hype part of the “new” development process that now includes formal focus groups and events like motorcycle shows and music festivals, and simply chatting with customers!

Huh?  Is H-D marketing implying they didn’t have product focus groups prior?

I’m looking forward to getting a look at the bikes at the 110th Anniversary in Milwaukee.  I wonder how much difference the additional head cooling makes on the engine?  The new Boom! Box infotainment radio with improved connectivity and text-to-speech technology is a welcome update because the old radio was dated and in serious need of an update.

Photos courtesy of H-D.

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Seattle Motorcycle Unit Selects Harley-Davidson Electra Glide

The Pope blessed a couple of motorcycle tanks earlier in the month in prep for next years  110th Anniversary ride in Rome and now the Seattle Police department has selected a new ride.

Does it get any better for the motor company?!

As background, the primary duties of the Seattle Motorcycle Unit are traffic complaint enforcement, high congestion traffic control and enforcement, accident reduction enforcement, escorts, and special event traffic control.

Motorcycle officers are assigned to geographic districts throughout the city on a daily rotation. The use of traffic districts is intended to give the motorcycle officers a more thorough knowledge of the traffic problems in the varied City neighborhoods and to provide consistent traffic enforcement citywide.

There were five motorcycles evaluated by the unit: the Kawasaki Concours, the Honda ST1300PA, the Harley-Davidson Electra Glide, the Victory Commander and the Harley-Davidson Road King. Thirty-one officers helped narrow down the selection by riding each one of the five motorcycles for one week and evaluating them.   The department chose to stay with Harley-Davidson, but switched from the Road King to the Electra Glide.

Analysts project that quarterly revenue for the motor company will fall 19% year-over-year and this new purchase can only help earnings.

Photo courtesy of Harley-Davidson, Electra Glide

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Every time that a gallon of gasoline starts to approach or break the $4 a gallon mark, you see an increase in the number of news stories about people running out of gas.

I’m not sure why that is, but the device that most of us interact with every few days was first unveiled this week in 1905 — the gas pump.  Sylvanus Bowser of Fort Wayne, Indiana made the pump for a customer, basing it on an earlier design for pumping kerosene. And according to the Census Bureau, in 1997 there were about 127,000 gas stations in the U.S. and that dropped to 121,000 in 2002, and to 114,000 by 2008 of which the majority now also have convenience stores.

But, if you’re like me, you hate to admit that you’ve ever run out of gas on a motorcycle ride, right?

Well my time occurred last year in route to the Laughlin River Run.  The posse had a fun night in Las Vegas and the next day we had a leisurely mid-day departure heading toward Laughlin on Hwy 95.  At the Boulder City/Laughlin exit we did a quick inventory of fuel at the stop sign thinking we could make Searchlight without any issues.  What we hadn’t planned on was the fierce and gusting headwind which resulted in the ‘ol Road King running out of fuel about 7 miles to soon!

There we were… the posse was pulled over on the shoulder of the road.  We removed a siphon tube from one of the tool kits, sucked the air out of the tube and nearly choked on a mouthful of fuel.  Finally with the gas flowing into a small water bottle we transferred some fuel from one of the newer bikes which had 6+ gallon fuel tank.  Not a great experience!  You can read a full accounting of that road trip HERE.

However, the point of this post is to inform you about a device called the Fuel Tool (MSRP: $99.99) which takes all the pain out of this type issue.  One of the riding buddies purchased a Fuel Tool before our epic summer ride this year and was telling us how handy the device seemed to be.  Then when we were in Sturgis we received a personal demo from the company owner and got a chance to use it on the demo tanks.

The tool is one of those products that when you see it in action you go why didn’t I think of that? It’s designed to work with all fuel-injected Harley-Davidson motorcycles that come with a quick-connect check valve at the bottom of the tank.  With the exception of the V-Rod, most made after 2001 have this type check valve.  You connect it to the host motorcycle (the one that has the most fuel!) then you use the nozzle to pour fuel into the empty bike.  It’s a one piece design that features an aluminum/brass constructed fuel nozzle wrapped in rubber.  It has 54 inches of high-pressure chemical-resistance fuel line and a nickel-plated, solid brass fuel line adapter and fuel release tool.  All of it coils up inside the included pouch and can easily store in a saddlebag using very little space.

Not only is the device great for helping stranded bikers, but it’s useful if you plan to winterize your motorcycle and drain the fuel tank.

Fuel pump photo taken by author on Arizona – Route 66.  Fuel Tool photo courtesy of company web site.

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At Sturgis 2012 and the marketing spin on the delayed launch of new 110th Anniversary models.

A couple weeks back, Harley-Davidson announced its 2013 model lineup.

I’ll cut to the chase.

What the marketing department portrays as a launch at the intersection between craft, art, and technology… it is in truth mostly carryovers and there is little to stimulate excitement other than a new paint scheme.  Adding fuel to the excitement starved debate is how H-D was late to release the 2013 motorcycles compared to previous years.  Why did the motor company avoid the traditional opportunity to showcase the new models at Sturgis?  Instead having a wooden crate on display with the launch date stamped on it for later in August.  I was disappointed and thought it was a bit lame, but it likely stopped people from asking the pesky question of where are the ’13 models, over and over of the Sturgis staff.  They could just point to the box…

Post Sturgis and as expected (and previously blogged HERE) there are a number of 110th Anniversary models receiving the press attention. Understandable, given its the kick-off celebration of the 110th Anniversary.  Recently at the Harley-Davidson Museum, and then in a Europe continuation of the festivities at European Bike Week in Faaker See, Austria, on Sept. 4-9, 2012.  However, the ‘official’ Harley-Davidson Anniversary Celebrations will unfold in Rome, June 13-16, 2013, and in Milwaukee, Aug. 29-Sept. 1, 2013.

H-D vendor area at Sturgis 2012

There will be ten models available as part of the 110th Anniversary Editions.  They will have unique serial number plates and Anniversary Vintage Bronze/Anniversary Vintage Black paint (CVO models get Diamond Dust/Obsidian paint).   Each will feature commemorative solid bronze fuel tank badges plated in black nickel and then distressed to highlight the bronze. A bright gold-tone Bar and Shield cloisonné is inserted in the main body of the “single wing” badge along with special anniversary badging and trim.  All of the Anniversary Editions will be loaded up with factory-installed options as ‘standard equipment’ including a premium price between $665 and $2,495 over the non-Anniversary models.

The ten 110th Anniversary Edition Harley-Davidsons are:

  • 1200 Custom 110th Anniversary Edition (limited to a quantity of 1,500): MSRP $11,699
  • Super Glide® Custom 110th Anniversary Edition (limited to a quantity of 1,450): MSRP $15,999
  • Fat Boy® Lo 110th Anniversary Edition (limited to a quantity of 1,750): MSRP $19,499
  • Heritage Softail® Classic 110th Anniversary Edition (limited to a quantity of 1,900): MSRP $20,799
  • Road King® 110th Anniversary Edition (limited to a quantity of 1,750): MSRP $20,999
  • Electra Glide® Ultra Limited 110th Anniversary Edition (limited to a quantity of 3,750): MSRP $25,999
  • Tri Glide® Ultra Classic® 110th Anniversary Edition (limited to a quantity of1,450): MSRP $33,499
  • CVO™ Ultra Classic® Electra Glide® 110th Anniversary Edition (limited to a quantity of 1,100): MSRP $38,599
  • CVO™ Road King® 110th Anniversary Edition (limited to a quantity of 900): MSRP $30,999
  • CVO™ Road Glide® Custom 110th Anniversary Edition (limited to a quantity of 900): MSRP $33,999

Historically the Anniversary models become a collector item and sometimes retain higher resale value.  In addition, for 2013, the motor company is pushing the Hard Candy Custom program, a shout-out to the styling movement from the chopper era of the 1960s that showcases metal flake paint, and styling details.  The motor company also introduced the new CVO™ Breakout™ model.

Photos taken by author at Sturgis 2012 and courtesy of H-D.

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H-D announced Q2’11 financial results this morning.

In a word – Booyah!

By every financial measure Harley-Davidson generated improvements in the second quarter of 2011, with strong earnings growth, increased shipments and growth in its dealers’ new motorcycle sales both in the U.S. and globally.  Here are some of the stats that CEO Keith Wandell and CFO John Olin reviewed from Anaheim, CA. where the annual dealer meeting and new product launch was in progress:

  • Revenue in Q2’11 was $1.51B (up 15%) with income up 36.8% to $190.6M
  • Motorcycle shipments up 7,769 in Q2’11 vs. Q2’10; Motorcycle segment revenue up $204.6M (18%) vs. Q2’10
  • Touring motorcycle shipments made up 38.3% in Q2’11; up 3.6%
  • International shipments were 36.2% in Q2’11 vs. Q2’10 at 42.5%
  • Shipment forecast for 2011 rose by about 8% and now H-D expects to ship between 228,000 and 235,000 motorcycles worldwide
  • Market segment share (651+cc) is 53.8%; up 0.2% from 2010
  • U.S. dealer network sales of uses motorcycles up 11% through May; Used bikes sales continue to firm up (meaning they offer the dealer a method to help offset the “sticker shock” of new bikes)

Did anything go less positive?  Well that depends on your viewpoint.  From a shareholder’s perspective it’s “Houston, we’re ready to throttle up”!   Stock price set a new 52-week high at $46.88.

As a rider/layman the touring motorcycle shipment increases were offset by the decreases in Custom and Sportster declines.  There were no age demographics quoted in the analyst call, but we’ve been told that typically “youngsters” don’t buy the higher priced baggers.  In addition, the new 2012 touring models that were announced earlier in the month have… shall we say… “lean” engineering innovation compared to previous years.  In a number of cases there we’re only paint palette changes and price increases made up the so-called “new” touring models.  There was about a 1% price increase in the U.S. market.  The lack of innovation is especially troubling (to me) given that product development spending was up $7M in the first half of 2011 which was described as a continuation of their strategy and focus on leaner engineering.  Sure metals and fuel costs are up, but the lack of stronger product changes is not always a recipe for long term success.

Nothing was noted on the call about the recent expansion in India.  Not sure why given that SG&A expenses were up about $13M on the strategy to grow 100 – 150 international dealers by 2014.  Latin America saw a decrease in retail sales which was largely due to all Brazil dealers being terminated.  There was a restart in that country and the new dealers (6) were coming up to speed.

Congrats to H-D on a great quarter!

UPDATE: Full transcript of the analyst call is HERE courtesy of SeekingAlpha.

Photo courtesy of H-D.  Full Disclosure: I don’t own H-D stock

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2012 Paint Palette

Have you been reading the headlines? There was a big earthquake in Haiti. Some men were rescued from a mine in Chile. Oh, and apparently there was a gigantic oil spill in the Gulf of Mexico.

What’s that you say? This all sounds like last year’s news?

Well, don’t tell that to Harley-Davidson. The motor company recently introduced 15 new models, which it considered innovative and groundbreaking  products:  a “tubeless” laced wheel option, and six new colors or color combinations on the touring models!   Then in a déjà vu lapse they announced the retention of last year’s integrated branding firm Graj + Gustavsen Inc. to continue advising the company on strategic branding initiatives related to apparel and apparel-related accessories.

It would seem that even Harley-Davidson understands that the touring models have so few innovations that their only hope of differentiating itself from the other players is through paint palettes…. So, the only buying question you’ll have to ask yourself, then, is: Does H-D make a convincing enough “color case” that you should invest about $20K in a “new” touring model?

Here’s the crux of H-D’s argument.  First of all, the new colors or color combinations are beautiful. The mostly unchanged motorcycles from 2011 are even more beautiful in 2012.  The unchanged frame is beautiful, too. It’s graphically coherent, elegant, fluid and satisfying. That, apparently, is the payoff when a single company designs and builds both the engine and frame housing?  The ‘advanced’ Harmon/Kardon radio retains its 1970’s BMW inspired ‘red’ glow and that glossy Vivid black paint — continues to be a magnet for fingerprints, boot scuffs, and unfortunately looks wicked great only in the dealer showroom. I think the words in the H-D press release were “The Legend Lives On.”  The band, Talking Heads, said it best… in the song “Once In A Lifetime.”  The “same as it ever was, same as it ever was” lyrics… really resonates for the 2012 touring models.

It’s been a while since I’ve had a good, proper, Harley-Davidson rant. Part of that has been the adventures of this year; I think it’s softened me and given me more patience, made me a little more graceful. Another part of it, probably closer to the heart of the matter is that I’ve been busy doing other things and a good rant takes time to incubate.

Well a rant has been building and I finally snapped as I read an article in last week’s “Wall Street Journal” (subscription required) where there was a front page story on Hyundai. How it went from a laughingstock to a runaway success in the car market. Now that they’ve solved the quality problem, now that they’ve caught up with Toyota and Honda, the company is confronted with a huge issue going forward, creativity. How do you lead when you’ve spent your entire manufacturing life following? Read WSJ article HERE.

The new Elantra is so far ahead of the market that Corolla sales have stalled and the new Civic has been blasted by critics as it fails to fly from the showroom. Instead of focusing on the econo box look, Hyundai imitated BMW and Mercedes-Benz. And the model was redesigned in four years instead of five, trumping its competitors in the marketplace.  The success of the Elantra is testimony to the change in culture at Hyundai. To one now focused on leading, on creativity.

This leads me to the question of is there a culture of innovation at Harley-Davidson?  When talking about innovation we often define the term too narrowly. In fact, innovation can – and does – occur in every industry of our economy, from consumer electronics to health care.  Yet, when I re-review the 2012 touring models, instilling creative thinking must be a work in progress.

For comparison, a few times a week, video screens around Hyundai’s headquarters in Seoul show a one-minute clip that has become a favorite. It shows an open office where workers wearing the same shirt and haircut are “beavering” away (that’s Oregon slang). Then a new person arrives with a different hair cut. Each time he voices an idea, the others shout him down. Eventually he gets the same haircut and everybody likes him. Then a question appears: ‘Aren’t we stuck in conventional thinking?’

I don’t know if a video loop like that would necessarily fly in a Milwaukee plant with the union workers, but that’s not the point of this post.

It’s about how most every American business is in a mad dash to innovate except for H-D.  The only answer can be the titans at the top are traffic cops sans creativity?  Don’t blame the public or the economy, blame the fat cat executives who are denying they’re the problem like the honchos at Goldman Sachs. What makes the rich believe they’re invulnerable, always right and entitled?   Somehow in the “dash-for-cash”, it’s all about shooting low, to the sweet spot, where most people live so the purveyors can make money.  Good enough just doesn’t cut it and of course there are exceptions, but generally speaking we’re in a low point for H-D touring motorcycles.

It’s a new game. No one gets to rest on his laurels. Making it today is no insurance you’ll thrive tomorrow, look at the carcasses strewn along the highway… OCC, Indian, or Big Dog.

We’ve got endless hype and yet sales are anemic.  Mediocrity thrives at Harley-Davidson because it’s all about the money.  About playing it safe… with new paint palettes!

Photo courtesy of  Hyundai and H-D.

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