Anyone who thinks my take on Harley ' s 2020 financial
performance was harsh should read what much of the Wall Street analyst community has had to say . They were not impressed - as shown by the dump taken by the share price . As Rich Duprey ( for one ) said on Motley Fool : " After the motorcycle maker ' s thirdquarter report held out hope , the company ' s reworked turnaround plan called The Hardwire might be gaining traction , but the latest numbers show Harley is still mired in the same quagmire it has been ." Equally , anyone who judges 2020 against 2019 or 2021 on the basis that 2020 was ' normal ' is definitely being either harsh or naive . It isn ' t wrong to be worried about new CEO Jochen Zeitz ' actions so far , or about the long-term prospects for his new five-year plan . He really has taken Harley for a walk with ' Hardwire '. He really has ' scorched the earth ' in preparing the ground for hoped for ' green shots of recovery .' Not only has he thrown Matt Levatich and his ' More Roads ' plan under the proverbial bus , but he ' s pretty much thrown the entire past decade or more of Harley ' s direction of travel under it too . The 2020 filing and the transition from ' Rewire ' into ' Hardwire ' are not the final stage in all this for Harley . At best it can only be thought of as that Churchillian ' End of the Beginning '. As this edition of AMD went to press , we were still waiting on the planned February 22nd formal unveil of the Pan America and , though incredibly unlikely , it is not beyond the realms of possibility that there will be another rabbit pulled out of the hat . That previously touted 1,250 cc Custom is still ' missing in action ' and maybe I ' m joining too many dots and making an entirely randomized picture , but the recent EPA filing for what appears to be a cruiser platform under the name of ' REVEAL ' could be to do with another model yet to be ' REVEALED ' for 2021 . Either way , the value that a nuclear grade explosion of positive hype would have to consumer brand excitement in the short-term and the balance sheet in the long-term cannot be underestimated . Kickstarting the turnaround with something dramatic , additional and genuinely new in tandem with the Pan America ( either simultaneously or later in the spring ) would certainly help draw a line in the sand and buy Harley that priceless intangible known as momentum . As Duprey recognized , the annual results indicated that Harley has " a much longer road to recovery than analysts previously thought . Considering Polaris Industries recently reported results that showed sharp sales gains for its Indian Motorcycle brand , investors shouldn ' t expect Harley to come roaring back ." Whether or not he ' s right to do a compare and contrast with Indian is a moot point , but he is right to worry about just how quickly Zeitz can deliver results from the place he has led the company to at this time . Don ' t get me wrong , he really didn ' t have much choice . Without some kind of dramatic decision making , the sense of corporate drift would have been palpable , reigniting the prospects for hostile bids . The call for Harley to consider de-listing , returning itself to private ownership , have grown from siren voices to a chorus now . However , Zeitz has definitively indicated that continuing the focus on delivering shareholder value remains as much of a priority
seed the future with Boomer replacements
for him as it was for Levatich and his CFO John Olin . Without proof of pulse , the stench of negativity surrounding the company will quickly taint the brand values that Zeitz clearly intends to use as his primary escape route . Harley needs to put iron into brand perception . It needs to " roar ." To give context on just how bad it is with Wall Street , " where Wall Street anticipated Harley would post an adjusted profit of $ 0.21 per share , it actually came in with a big $ 0.44 per-share loss from a $ 0.20 per-share profit " in 2019 . Yes , the rebuilding of the Model Year and the deliberate reduction in inventory are vital context to the -51 % decline in motorcycle revenue seen in Q4 ( shipments fell 48 % to under 21,000 units ). Yes , those factors , plus the pandemic , are vital context to the -15 % year-on-year decline in unit sales in the United States in 2020 ( -13 % internationally ), but it must be remembered that Harley has been among the few , if not the only ' major ', to end the year in such poor shape . Yet another entirely new platform family at the same time as , or hard on the heels , of the Pan America could of course be misinterpreted as a lost cause and repeating the same mistakes . But the market is continuing to morph , and the core customer base is aging out . Harley needs to motivate and galvanize a jaded dealer network and recapture the attention of a much changed media landscape that does not consume and channel marketing efforts in the way it used to . Above all it needs ' Halo ' product that will enthuse the motorcycle-buying public at a price-point that buyers are prepared to meet . With the Street having gone , and Sportsters apparently breathing their last in 2021 , there need to be initiatives , not just in the pipeline but about to gush forth ! Harley is right to continue to regard its brand as ' Premium ' and to not want to compromise its status . Harley is also right to not want to directly pursue the ' Alt Moto ' cohort on the basis that it is a rider group principally defined by price ; it is a sector that will evolve as soon as it has enough money to do so . Plus , in the connected world of integrated traffic management in which motorcycles will have to live alongside Level 4 and 5 autonomy , " stripped down " will no longer mean the same as cheap . By all means , let others worry about the $ 6k ( and lower ) market as U . S . manufacturing overheads are prohibitive there ; even the $ 6 to $ 10k market is problematic for Harley - unless they bring in their Benelli-esque Qianjiang and Hero-made Harleys . In the United States and Europe , they need to be dancing with the $ 10 - $ 15k plus Scramblers , Street Trackers and City Scratchers from the likes of BMW ( R nineT ), Ducati , Triumph , KTM / Husqvarna ( Svartpilen 701 anybody ?) and others ( including the strengthening field of Chinese and Indian made legacy brand projects ) if they want to seed their future with Boomer replacements - and doing so real soon .
Robin Bradley Co-owner / Editor-in-Chief robin @ dealer-world . com