FORTUNE -- Harley-Davidson was the feel-good turnaround story of the 1990s and then the poster-boy for brand values in the 2000s. How often did you read that Harley was the only consumer brand whose customers were so loyal they wore the company's logo tattooed on their chest?
But after expanding exuberantly in the last decade, Harley has fallen on hard times. Now it is struggling against a foe that not even cost-cutting nor brand loyalty can overcome: demographics. Its current owners are getting old, and not enough younger ones are coming up behind them.
Harley's core customer is a middle-aged white American male, a group that will contract in the coming decade. As one blogger wrote, "The 60-70-year old riders have trouble lifting a leg over the seat because of arthritis. And finger joints hurt with the cold air and engine vibration." Women represent just 11% of Harley buyers, and penetration in the African-American and Hispanic markets is similarly limited.
Harley's need to readjust its aspirations was driven home this week by the news that the company had forced its Wisconsin labor unions to accept wage and benefit concessions by threatening to move its factories out of the state. New contracts will allow the company to cut 325 employees and convert 150 to 250 other workers to temporary or "casual" status, meaning they have fewer benefits and will work on an "as-needed basis.
The cutbacks come as Harley (HOG, Fortune 500) scales back in the face of a sharply shrinking market. As recently as 2008, Harley built 303,000 motorcycles, nearly double the 159,000 it assembled in 2000. This year it expects to make between 201,000 and 210,000 bikes. Since new CEO Keith Wandell arrived on the scene in May, 2009, Harley has consolidated operations, terminated its Buell line of sport bikes, and sold its MV Agusta Italian motorcycles back to its founder.
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i am 32 yrs old and ride a super glide and personally know 4 other people under 30 that ride harleys
ReplyDeletethier proplem is thie cost, shos gonn abay 20-30 k for a bike when you can get one for less then half that
ReplyDelete10:09 = JR
ReplyDeleteWe're renovating a house in Smyrna, and we've gone back and forth from Salisbury every day...I would say that about 75% of the riders we saw since Thursday were "older"; we saw lots of grey. Of course, not very many young people can afford a $25,000 bike either....
ReplyDeleteThe plain truth:
ReplyDeleteH-D has not updated or innovated like its competitors who make a better product.
Yes good ole harley, cut wages but not cost.
ReplyDeleteHell i will continue to take down the american economy with my new honda.
It is faster , and a much better bike, so until harley cuts there prices instead of there workers, tuff luck america.
Those of you who do pay $25k and up for a harley,no wonder our economy is in the shape it is in, your stupid.
They just need to cut back production to keep the supply and demand closer. They have just been building too many. They need to go back to the days a decade ago where you just couldnt go in and buy one. There are plenty of younger riders out there loyal to HD and face it we are all getting older by the day.
ReplyDeleteAlot of younger riders prefer the smooth power and sporty handling offered by a Japanese 4cylinder. and move up to a Goldwing or BMW motorcycle as they age. Harley bikes seem old and unsophisticated to many riders younger than 40.
ReplyDeleteI own a 2000 Road King that I would not trade for any other bike, the problem I have with Harley is the outrageous prices for apparel and parts in their stores, most of which is NOT USA made. $30 bucks for a tshirt??? come on!!!
ReplyDelete11:55 they charge those prices cause the know the idiots will pay that!
ReplyDeletethe problem is the cost of a Harley. we have the unions to thank for that. the unions have destroyed business in the US
ReplyDeleteI have been riding Harleys for 30 years . The rubs (rich urban bikers ) has done it to harley. Your working rider can not pay $25,000 for a bike.But if the rich want to be a biker they plop down that cash ,instant biker-NOT. Now the rubs are selling theres with trailer miles alot cheaper than new cost . There are alot of RUB deals to be had,just look around. And yes I do have a Harley tatoo and its not to support HD.
ReplyDeletepeople most of the bikes don't cost that much! if i remember correctly all sportsters, dynas, and softails are under 20
ReplyDeleteI am 32 female and ride a 80 shovel head. I plan to buy a newer model in a few years and keep my "Pearl" for special occasions. Would never ride/buy another brand. You just can't duplicate the sound, feel or pride that comes with riding a Harley :)
ReplyDeleteI have always bought American cars and trucks. However I have always bought Hondas. Had more then I can count, they have always been reliable and affordable.
ReplyDeleteOld Fatboys never die....they simply fade away. Their riders too. LOL!
ReplyDelete