Harley is Starting to Dance With The Gal That Brung it- Again
Just as I was writing this, Harley-Davidson ' s authorized dealers had gathered at the Baird Center in downtown Milwaukee for the 2026 iteration of its annual Dealer Forum- and some smoke signals and insider info titbits were emerging across the Harley dealership community Socials- and most of the news revealed then and since has been positive. My two primary concerns and remarks last month were whether the ' Mo-Co ' would be able to adjust and respond to dealer ' s two most urgent requests fast enough. The fact that it has goes to just how deep Artie Starrs ' influence has already percolated after just 12 months. It would appear that his requirement that the company got used to deploying a greater degree of agility in responding to market conditions has been embraced. In this regard, what has been seen so far is unlike anything any of us have witnessed since well before the 2008 Financial Crisis. There is still a long way for Harley to go before completing its much needed 180-degree volte face. But, as the old saying goes, in the long-term it is the first steps in any new direction kryptonite crafted chains of travel that are always judged to have been the most difficult, and therefore the most important. It has often been said that Harley ' s dealer network is its primary superpower, but for too long it has been the company itself that has been binding them in kryptonite crafted chains. The new CEO ' s model range strategy has had two key and interdependent priorities. Affordability, of course, but without throwing away the lucrative top-end of a range that for too long has been overlong on top-end options but too short on real choice. Drop some of the low-selling topticket models by all means, but never forget that the entry level should be the start of an evolving brand journey. The other and equally important priority is to get back to being the primary custom platform of choice and boost dealer( and ultimately factory) revenues with factory or aftermarket P & A and workshop revenues. For too long the company has failed to dance with the gal that brung it. In what I have seen so far of the MY2027 announcement, the course has been corrected and the direction of travel reset back towards the one that brought it steaming out of the 1980s into its post IPO 1990 ' s and early twentieth century boom time. Just for clarification- that ' s not to say that it was the IPO that ' did the trick ', but it did provide an injection of capital that was much needed at the time. I am still of the opinion that Harley would be best served at this time by returning to private ownership. That is the best way for Harley to access the new injections of capital that it will need- even allowing for the changes at HDFS. We are headed into times in which debtloading and credit market dependency will be destructive. Obsolete. Harley must retain and recycle every cent it can make. From its present $ 2.71bn ' market cap '($ 3.12bn enterprise value), theirs is a minimum 10-year mission if it is to reclaim anything approaching the $ 11bn value it had at the end of 2007. There are two primary ways of getting there, and the CEO has set course on the ' organic ' route with these new announcements. The other would be via the M & A pathway, and Mr Starrs is already on record as saying that acquisitions are something the company will look at on his watch if the right strategic opportunities come their way. Many years ago, Jeffrey Bluestein( CEO 1997-2005) had a model of a destination dealership with multiple brand channels feeding the HDI balance sheet. In addition to the " Bar ' n Shield " and Buell flags fluttering in the breeze of retail opportunity, this dealership also had Ducati, KTM and Triumph flags tempting buyers off the highway. Harley had three attempts at buying Ducati, theoretically had a gentleman ' s agreement to have first dibs if the Bloor family ever decided to sell Triumph and, well, thank goodness the ill-fated and poorly timed attempt to buy KTM crashed and burned with the tape in sight. Not that acquisitions are an automatic short cut to success. The latest news about MV Agusta, is a salutary reminder of what happened when, having failed to bring Ducati, Triumph or KTM ' into the fold ', Harley looked for alternates. Two months before the September 2008 ' Lehman Apocalypse ', MV Agusta was the one Harley did buy, and that brand continues to be one of the motorcycle industry ' s perennial poison pills; one of the primary hills on which good money goes to die. Manageable and strategically apposite motorcycle brand acquisition opportunities are no longer as readily available as they were. These days the competition is the Chinese and Indian manufacturers who have been hoovering up available brands for more than a decade( Bultaco is the latest to go the way of so many others). Mr Starrs may be much more likely to consider acquisitions that change his mind about taking the company private again. For now, by focussing on what he can control, he has put his company ' back in the band ' and given his dealers a better potential supply of dance partners than they have had for 10 years or more. The most welcome surprise for me is to see the new Hero MotorCorp, India built oilcooled SP440 single( described as a ' Lightweight ' class entrant) and the return of the venerable air-cooled XL 883 Sportster in the same slew of announcements. I really thought that, per the snail ' s pace of the recent past, these would be sequential rather than simultaneous. Though at the time of writing( two days before the Dealer Forum finished) the ship dates were not yet publicly confirmed. Add to that the continuing models( including the Deadwood and Super Glide Softails), the return of the Road and Street Glide STs, and a new Softail designation, the FXLB( Low Bob?), touted as a stripped-down price point customisable M8 Softail platform( plus any other changes I had not yet clocked) then it sounds to me like the band has warmed up and is about to launch into a dance tunes frenzy.
Robin Bradley
Co-owner / Editor-in-Chief robin @ dealer-world. com