<<< Continued from cover Anybody from outside the company who has tried to have dealings with Harley in the past decade or more will be painfully aware of just how sclerotic the corporate bureaucracy in Milwaukee ( and elsewhere in the organization ) had become . As remarked upon before , Zeitz is clearly aware of this and the company says that its " New Operating Model " is to be one of " Reduced Complexity and Increased Speed ," and that it has already " eliminated duplication and complexity across global operations , resulting in significant expected ongoing SG & A savings and vast improvements in agility and efficiency . " The company also refreshed the leadership structure and team with most of the leaders being new to their roles and many bringing new perspectives and capabilities from outside the company . " Harley-Davidson plans to concentrate on approximately 50 markets , primarily in North America , Europe and parts of Asia Pacific , that represent a high percentage of the company ' s expected volume and growth potential . The company ' s international business has been significantly reset and refocused with investment and resources aligned with projected market potential . Under the new participation model , approximately 36 highest potential markets will remain , with the resources and autonomy within a clearly defined framework , to best drive growth and profitability . Some " 17 markets will transition to more cost-effective distributor models . This includes India , where Hero MotoCorp will be the exclusive Harley-Davidson distributor " and be " licensed to develop and sell a range of Harley-Davidson motorcycles ." Of the remaining global markets that Harley is currently in , 39 " will be exited due to volume , profitability or potential that does not support continued investment ." Additionally , the company says it has " streamlined its planned product portfolio by 30 percent and overhauled launch timing and go-tomarket practices for maximum impact and success ." Highlights of the new approach will include " further streamlining - eliminating optional offerings in the product portfolio with low customer uptake ; sharper focus - reducing complexity and directing resources toward the highest priority and core stronghold products ; priority - deliver Harley-Davidson ' s first Adventure Touring motorcycle in 2021 ; outsource - new venture created for eBicycles with minority equity participation for Harley- Davidson " to be marketed as " Serial 1 , Powered by Harley-Davidson ."

Income statements in THREE MONTHS ENDED NINE MONTHS ENDED $ 1,000s ( except share ) 2020 Q3 2019 Q3 2020 Q3 2019 Q3

United States 25,284 25,572 69,359 101,481 PRODUCT MIX 2020 Q3 2019 Q3 2020 Q3 2019 Q3

In terms of its seasonal realignment , plans are underway for a " virtual , new model year launch for dealers and consumers in Q1 2021 - shifted from August to be closer to the start of the riding season ." Addressing the dire state that Harley ' s marketing has been in for the past 10 or more years the company appears to be embracing the blindingly obvious with " Marketing that drives desirability - the company executed new marketing campaigns featuring Jason Momoa , and Ewan McGregor and Charley Boorman , stars of The Long Way Up , generating significant leads and growing awareness , excitement and desirability for the Harley-Davidson brand and products ." Highlights include 500 million + views of ' United We Will Ride ' video by Jason Momoa ; 56 million + views of The Long Way Up trailer ; 92,000 visits to The Long Way Up page on H-D . com and 105 million + positive media impressions of Long Way Up . To drive growth , Harley-Davidson has established new business units for Parts and Accessories ( P & A ) and General Merchandise ( GM ) " that enable each to invest resources to establish new channel strategies and better product assortments ." The P & A Strategy will " better leverage opportunity to inspire riders through customization ; synergize with motorcycle product strategy ; improve pricing and inventory strategy ; reduce SKUs by 15 percent for 2021 and enhance training and field support to drive sales growth ." Its GM Strategy will " realign product in critical categories ; build category management plans ; re-establish design principles centered around authenticity , brand heritage and quality ; sharpen focus on the most profitable SKUs and reduce GM SKUs overall by 25 percent for 2021 ." Adapting the playbook that served Jochen Zeitz well at Puma and at the parent Group that eventually became the Kering luxury goods empire ( Printemps , Gucci , YSL , Boucheron , Alexander McQueen , Stella McCartney etc .), " Zeitz places a premium on Protecting Value ." Harley says it is now operating with a " remodeled approach to supply and inventory management with a focus on a powerful dealer network to better preserve the value and desirability of Harley-Davidson motorcycles for customers . Some initial outcomes of this approach as of the end of the third quarter include a reduced price gap between new and used Harley- Davidson motorcycles in the U . S .; a reduction in global dealer inventory by over 30 percent " and , essentially , " eliminating promotions and discounting with a focus on brand building ." Harley says that " a strong network of profitable dealers is essential to delivering the most desirable Harley- Davidson experience . The company continues to optimize its network to strengthen priority markets and provide an improved and integrated customer experience ." The company says it " continues to proactively manage its business through the pandemic and has maintained robust protocols to keep workers safe in its factories . Most nonproduction workers will continue to work from home at least until the end of the year . " Included in the company ' s broad cost and cash savings measures are SG & A reductions , curtailed capital spending , suspended discretionary share repurchases and a prudent approach to dividend payments . The company

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6 AMERICAN MOTORCYCLE DEALER - DECEMBER 2020 www . AMDchampionship . com