Harley-Davidson Hardwire strategy Pays Off! But For How Long?

Harley Davidson have made somewhat of a comeback over the last year with latest figures suggesting revenues to match those of pre pandemic era.

Second quarter figures due to be released today in the USA where stock market analysts expecting revenue profits more than doubling that of a year ago.

H-D stock prices had seen much volatility over the last year due to poor sales and the failures of some of the Street models to capture the imagination of next gen riders, however the Hardwire refocus strategy directed by CEO Jochen Zeitz to raise desirability whilst curtailing supply to increase demand has seen the stock price rise to a 3yr high of $51.96 in May 2021, however it has since regressed back 15%.

With the latest motorcycle models, Pan America, helping the resurgence and the latest LiveWire One being launched from their new spin off company; LiveWire and of course the very latest Sportster S unveiling too, it is expected there will continue to be gains not only in terms of stock performance but also in sales revenues and profitability.

However whilst expectations will see revenue rise to $4.34 billion for the full year and that being a rise of nearly 40%, these encouraging signs must be tempered with caution.

The pandemic skewed figures and the customer base willingness to reach deep into their pockets to buy new motorcycles, parts and accessories. There has also been a supply and distribution problem which has hindered riders being able to buy parts for a considerable time too. Motorcycle and parts starvation has caused an inflated demand and interest in the brand, coupled with the world starting to awaken once more…and the rise is to be expected…but for how long?

Some analysts are suggesting that the supply reduction strategy and increasing unit prices may have short terms gains but create long term problems for a company that has apparently abandoned the notion of getting many more of their bikes into wider demographics and notably the young.

With the More Roads program, the company under former CEO Matt Levatich really aimed to evolve the brand to make it more accessible to younger riders and those on lower incomes too around the world, however when his tenure ended, the Rewire program started to refocus efforts. This led to the Hardwire which has a clear plan to produce motorcycles at premium prices with questionable premium standards and levels of technology when compared to other motorcycle brands.

Over the last years or so many dealerships around the world have closed down and more are to follow, with the company expecting more than 200 to follow. Indeed some global markets have been closed entirely and H-D’s official presence in India was brought to an abrupt halt too…now they have teamed up with another Indian manufacturer to act as their agent and distributer in that country and perhaps to even release a lower capacity single cylinder 338cc motorcycle, but that has not been confirmed as yet.

These dissenting voices, whilst optimistic for the near future are clearly indicating that the More Roads programs was the best method for long term success. The company focus of premium products and higher cost point may still attract the older gen riders, but does nothing for those aspiring to own a branded product.

The next few years will be interesting times for the company as we find out if their methodology will pay off or will see them sink. The Electric vehicle market will no doubt boom in years to come and they are perfectly placed with their LiveWire subsidiary to ride that wave too, but it is their more traditional models and this new era of using liquid cooled engines in the Pan America and the Sportster S, that will ultimately decide whether their customer base will stick or twist…and whether potential or future prospects will just swerve the brand all together.

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