Where Have All The Flowers Gone ?
As this edition went to press ( January 11 , 2024 ), Harley-Davidson had not released the ' meat and potatoes ' of its MY2024 plans - merely a January 3rd dated statement that the continuing 2023 models were already in dealerships . Nether had it yet confirmed when it would publish 2023 Q4 and full year financials . There was no new model information in the release at all , yet confusingly they promised that " more new model information " would be released in a video on January 24 - one promising the " dawn of a new era ." Personally , and in common with investors and analysts , and I dare say most of the Harley dealers too , let us hope that it does turn out to be something substantial and truly interesting . Something that really will create brand excitement and , in particular , bring ' Fresh Feet ' into the showrooms . Because Harley desperately needs that . Harley dealers desperately need that . It is time for all stakeholders to be able to " see the beef " of the Zeitz era . To have their faith in the Rewire / Hardwire renewed . My recent return to deep dive scepticism about Harley ' s direction of travel isn ' t to denigrate the hard work that the many hundreds of talented people and thousands of hard working souls put into their work . Quite the reverse . As much as anything else , it is born out of frustration on their behalf that all their efforts must at times feel like that never ending tunnel where the daylight just never seems to get any closer . The past five years in particular have shown that even after the boom and bust of the post 1980s stock float era , Harley has had , and has still got , some remarkable engineers . Professionals who can mix it with the best if they are given the space and backing . For all its idiosyncrasies , the M-8 is a way better platform than the Twin Cam . In turn , that was a quantum leap on the Evo , the 60-degree V-twin Revolution Max and the Pan America models ( especially ) and Sportster it powers , has been another major step forward - ' potato-potato ' has had its day . Sorry ' n all , but as the late , great Alan Sputhe kept telling those who would listen , Harley could never compete effectively in the wider international motorcycle market while it cleaved to 100-year-old concepts like 45-degree layout cylinders . So , maybe 60 degrees throughout is the new era that will dawn ? But no , not likely . The adoption of Variable Valve Timing in last summer ' s CVOs was another major leap forward . As with entry into the ADV sector , one that takes Harley further down the path of admission to the ' Big Boys Club ' of the mid-21st century . The scuttlebutt that I ' ve been picking up is that this is closer to the mark - the start of VVT migration into the Touring range . But even so , while welcome , essential even , it still smacks of the kind of conservative incrementalism that has so often held Harley back . Is it really the dawn of a brave new era ? For me it is kind of like dipping one foot in the water , one toe at a time . While its share price is up from the October $ 26 low , it is still continuing to stagnate way off the current 12-month high of $ 51.71 ( February 2023 ) and triggering a dangerously low level of market capitalization ( below $ 5bn ) that I for one never expected to see again after the worst of the 2008 financial crisis . Remember when Matt Levatich derided Polaris ' $ 5bn market cap ? From the lofty
One more road to nowhere ?
near $ 10bn perch it was sat on some 12 years or so ago ? Hubris never has been an attractive look . Without the injection of some serious horsepower into its financial performance , by the time you are likely to be reading this , the January 24 announcement will have dawned , and we will either be doffing our caps at the inscrutable , pokerfaced wisdom of a very smart play , or waiting on the compound effect that a disappointing product range announcement and disappointing 2023 numbers will have on the share price . Regardless of the positive talking points that may be able to be mined from the data , the headline figures will not be the kind that investors and their analysts , or dealers and Harley employees need as the Zeitz era starts to edge ever closer to the final year of its 5-year strategic objectives . In February 2021 , Hardwire was touted as a plan for " profitable growth and brand desirability ," targeting " increased profitability and low double-digit EPS growth through 2025 ." Well , we are now past topdead-center of the Hardwire five-year cycle and still awaiting and hoping for " the dawn of a new era ." When the activist 2019 investor triggered the boardroom coup that eventually saw Zeitz replace Levatich , I was an enthusiastic supporter of the change . Right up to a year or so ago I remained convinced that a plan that appeared to put brand desirability and shareholder returns ahead of unit numbers deserved an open mind . I never subscribed to the implicit perspective in the new plan that appeared to lay at least a portion of the blame for Harley ' s then malaise at the door of its dealers . However , there certainly were bigger-picture strategic issues to resolve before a sounder financial foundation could be built . One that would allow the company build a truly competitive and future-proof model range position for itself in the fast-changing global motorcycle industry , which it needed to face-up to . Sadly , in the past 12 months I have found my faith wavering . I have found myself less convinced about the execution of what had appeared to be a robust plan . Less able to sustain the optimism I ' d originally had about that plan . It has been starting to look shallow and short-term . Long-term readers will remember me spending several years concerned that Harley was vulnerable to a hostile takeover , and that delisting might be the smartest play . Having already aired that concern once already in passing in the past year , for the first time since that 2019 changing of the guard , I do now find myself genuinely concerned that without the kind of impactful MY announcement and convincing set of fiscals that are required , we may well be headed back into that uncertainty .
Robin Bradley
Co-owner / Editor-in-Chief robin @ dealer-world . com
4 AFTERMARKET MOTO DESIGN - FEBRUARY 2024 www . AMDmag . com