Capital is the Ficklest of Mistresses
My remarks last month , concerning the palpable disappointment that might reverberate around Wall Street if the second half of Harley ' s MY2024 model announcement and 2023 Q4 and Full Year Fiscals failed to live up to expectations , has been borne out . I am writing this piece some three days after getting back from the excellent Drag Specialties and Parts Unlimited Parts and Dealer Expo at Louisville . The second part of Harley ' s MY2024 announcement had dropped , but as is often the case , this edition will have gone to press 10 days before the financials are disclosed . Featured at length in this edition , the ' Louisville ' show was very well attended , and as a bellwether for the year ahead , the sentiment was a great deal more positive than might have been expected . Vendors and dealers alike appeared to be accepting of the variables that they are faced with and determined not to let fear and uncertainties shape their outcomes . There was more , newer product in evidence than in recent years - though still not quite yet a return to pre-pandemic levels of R & D creativity - but overall , the " trend data ", emotional and practical , appeared to be headed in the right direction . Which , regrettably , is less than can be said for Harley at this time . Last month I was anticipating that the " Dawn of a Brand-New Era " that Harley had been pimping must mean , at the very least , that the VVT and larger displacements introduced with the CVOs last summer would now start to trickle down to the mainstream of the Touring platform . But alas , no , not yet . I had also been hopeful that Harley would leverage the good start ( in terms of industry reaction if not sales so far ) that had greeted its long overdue entry into the ADV ( aka ' Dual Sport ') sector would see it respond to that sector ' s direction of travel with a lower displacement version of the Revolution Performance 1250 . But alas , no , not yet . The ' newest ' of the so-called new models , the CVO Road Glide ST , leverages its King Of The Baggers success , and likely justifies its CVO $ 38k price tag with a 127 horsepower , 145 ft lb torque High Output version of the 121 " M-8 . Though it will always remain a ' thing ' with me that an 800 dry weight can conceivably represent a " reduced weight " version of any motorcycle , least of all a trackderived example of the breed . Nonetheless , I am sure it will sell well , as will the CVO Pan America ( despite its extra weight and less than stellar spec ) and the " new " Street and Road Glide models will no doubt be well received too - despite being on the 117-inch M-8 and without VVT . While in and of themselves they are unlikely to be available in large enough numbers to materially add to the showroom overstock problem that many dealers currently have , it would appear that the Harley board ' s Hardwire strategy of ( initially ) reducing inventory availability to increase scarcity and desirability ( AKA price ) has backfired so far . Why anyone can think that those two strategies are automatic bed fellows was beyond me from the get-go . They can live in perfect harmony and drive each other towards a happy-valley balance sheet , but not because they are intrinsically linked
scarcity and desirability not intrinsically linked
or functions of each other . Manufacturing has been littered with examples of scarcity not driving desirability , and of plentiful supply in fact driving desirability . Indeed , such outcomes are way more commonplace than the tricky play that Hardwire had committed Harley to , and its approach to that play has not proved to be convincing yet . The day after the MY2024 announcement , the Harley share price was down at around $ 33.42 , which is up from the 12-month low of £ 25.88 plumbed in October last year , but down ( rather than up ) on the immediate pre-announcement level , down on the $ 37,25 seen just after Christmas 2023 and still way off the 12-month high of $ 51.72 seen in January 2023 . New model range launches for a brand such as Harley need to be aspirational , inspirational and motivational , but to the outsiders that it needs to convert to insiders , it has been none of those things . The launch video was , instead , superficial , shallow and patronizing . Harley is back to the absurd proposition that all you need in order to give your life purpose and value is to swipe your plastic or load up with debt . It was as if Harley ' s view of its potential new customers are men and women who are unable to build their own storybook without the help of a lifestyle councillor . That they are incapable of making a rational and informed decision on product feature grounds . That rather than being an expression of individuality the brand now needs to be defined by groupthink . That its customers cannot be leaders , but only sheep . That is not clever , that is condescending . Top-ticket CVO models may feed the balance sheet , but it is Royal Enfield 650s and Bullets , Ducati scramblers , Triumph triples , R nineTs , Honda Nakeds , KTM Dukes , Suzuki SV650s and Yamaha MTs and Ténéré 700s that are inspiring imaginations , driving desirability and feeding the riding souls and stories of the future-critical 21-35 YO cohort . The reliance on used examples as the new brand entry-level was always destined to only ever be an interim solution to growing the next generations of customers . Maintaining a focus on $ 30 grand plus bikes simply reinforces the perception that Harley can only ever be an older rider ' s brand . I realize that in the short-term , it was emissions compliance ( especially in Europe ) that drove the decision to can the EVO Sportsters , for example , but it was also cowardice . You ' re Harley-Davidson ffs , or at least you used to be ! You should be engineering your way out of such corners . A high price-point solution may suit investors , dealership groups and quarterly bonuses , but can never work for all potential customers . Capital is a very demanding mistress - they who live by the investment generally find themselves being skewered by the investor sooner or later .
Robin Bradley
Co-owner / Editor-in-Chief robin @ dealer-world . com