Congratulations Harley-David
As revealed when Harley-Davidson released its Q2 2018 fiscals ( July 24 ), the Motor Company subsequently was due to unveil what it trailed as its “ accelerated strategy for growth ” a week later - and subsequently did so on July 30 - it was smart to put some distance between the two announcements . The Q2 fiscals were not , actually , quite as bad as many analysts had been expecting and produced a $ 4 to $ 5 bounce in the share price straight away ( to the $ 45 mark ). What was unveiled a week later was one of the most profoundly important strategic planning announcements in the 30 plus years since the company went public in the mid-1980s . Of itself it didn ’ t ( yet ) produce quite such a marked stock market response , but there is now reason to believe that , at worst , Harley has bought itself the time needed to be in with a fighting chance of staving the sharks - bait no more - not for now anyway . Given that much of the funding for new plans is going to come from “ good housekeeping ” rather than splashing the cash or , worse , needing to use someone else ’ s , would appear that Harley ’ s ( entirely appropriate ) caution is being matched favorably by that of investors , because the strategic thinking they unveiled and the likely ROI it is slated to yield within five years certainly hasn ’ t spooked the markets . The ‘ More Roads ’ strategy has added much needed flesh to the bones of CEO Matt Levatich ’ s January 2017 announced plans . Those plans were to launch 100 new models and train 2 million new riders in the U . S . A . in 10 years , massively grow its international dealer network and see some 50 percent of unit sales coming from ‘ international ’ markets . Remember , that latter announcement pre-dates this strategic leap forward and the whole Kansas , tariffs and Thailand matrix of issues . All these worthy objectives were to be achieved in environmentally appropriate ways while sustaining balance sheet integrity and shareholder value . Ambitious ! So , has Harley managed to put flesh on the skeleton in a convincing and forwardthinking way ? One that can see the reach , the consumers and opportunities they will represent in the next 20-30 years ? Does ‘ More Roads ’ provide a platform from which the company can get creative and responsive ? Well , yes , I think it does . At the worst , Harley has given itself a convincing startpoint down a path that will provide a foundation from which to emerge from under the shadow of engineering conservatism and 20th century legacy . Whether the path broadens out into ‘ Roads ’ remains to be seen , but provided the twists and turns of the market and wider economic and geo-political issues aren ’ t harboring shocks of seismic proportions then , again , yes , there could well be those broad , sunlit uplands ahead . Even if many of the riding options on sale 20 years from now bear only a passing resemblance to those envisaged at this stage , Harley ( and the wider market for us pilot fish ) does now have a foundation . The company has given itself the allimportant pathway for future first time Harley buyers to grow with the brand . Provided Matt Levatich can carry sufficient of the forward thinkers in Milwaukee with him , sufficient of the dealer network and sufficient Wall Street credibility for
‘ Middleweights ? Hurrah !
the plans , then there ’ s no question that we are now firmly into ‘ game on ’ territory at long last . Of course , any slew of initiatives with this breadth ( if not yet depth – focus on the strategic thinking , not the styling or tech at this stage ) is going to have required senior management to have been coming off a “ long run ”, but the radio silence in the meantime has been deafening to outsiders and , no doubt , deeply frustrating to insiders . Maintaining competitive advantage by keeping the powder dry has , of course , been justifiable in terms of minutiae , but the vacuum that has opened up since Levatich unveiled his worthy , but so far seemingly hollow responsive manufacturing thesis has handed much of that competitive advantage to competitors . truth is that Harley still has a long way to go before it really is seen to be a The more responsive and agile business , and as he observed at the time , it certainly
does need to get into a much smarter place when it comes to exploiting market opportunities . It needs to be able to change or add engineering practices at an even greater speed than it has previously managed to change or add paint jobs … it needs to be able to pirouette on a dime ! In the 30 years I ’ ve been commenting on the Motor Company , the long since discarded Buell and MV Agusta initiatives aside , it has instead been more like watching an aircraft carrier attempt a three-point turn in a swimming pool . But I don ’ t want to be churlish . That gripe aside ( personal opinion ? The value of unions , politicians and regulations to society are vastly overstated and have little or no place in a business environment that sets a premium on flexibility and response to customer opportunities .), the plans unveiled are a foundation , and after all these years , the mis-steps and the wasted chances , watching Harley wake from its long slumber and inhale deeply of the sweet scent of opportunity is going to be a wondrous thing to behold . The core of the strategy is to bring their E-bike plans to market , as already announced , with ‘ LiveWire ’ as the first of an evolving program of ‘ new gen ’ urban riding solutions in 2019 . But here is that flesh - it will do so before entering the Adventure Touring segment in 2020 ( late , but hurrah !), doing so with a new 500 to 1250 cc displacement modular engine platform that can also allow the company to launch some very different factory customs ( excellent !) and embrace some ‘ streetfighter ’ styling interpretations ( also a tad late , but welcome nonetheless ). That modularity of platform and , no doubt , the manufacturing flexibility and responsiveness that consolidation at an expanded and re-tooled York , Pennsylvania , facility ( with matching engineering processes overseas ) should permit the company to … drumroll … get a share of the already burgeoning ‘ middleweight ’ market ( more hurrah !). Some have questioned Harley ’ s interpretation of the displacement and price sweet spot of that growing market , but better to come to the party than pass it by altogether ! Going further , the real value in the investments internationally will be to allow Harley to get a share of the lightweight displacement market , especially in Asia