Friday, November 8, 2013

An Aging Company Selling an Aging Product Tries Again to Broaden its Appeal.

Harley-Davidson announced the other day that they would make another attempt to attract a few customers from their rivals, e.g. Honda, Suzuki, Yamaha, BMW etc. The super-heavyweight bikes that H-D sells are facing a declining customer base, particularly for new bikes (between dealers, E-bay, craigslist, etc. there are hundreds of thousands of used Harley's for sale).  So, management has decided to try to sell a "lighter" bike (“These new bikes are leaner, yet still have a mean streak,” Mark Hans Richer, a senior vice president at Harley-Davidson, said in a statement. “They’re the real deal, made of real steel.”)

This attempt to attract a new customer base was tried before: in 1998, the Buell Motorcycle Company became a wholly-owned H-D subsidiary. This infusion of technology allowed H-D management to bring out the Buell Blast in 2000. It was, at 360 lbs and with a 492 cc engine, management's idea of an entry-level training bike and was used in H-D's "Rider's Edge" rider instruction schools.  However, the Blast (and other Buell models) never sold that well and under the cover of the 2008 financial crisis, in late 2009, Harley management shut Buell down. In a rare show of humor, H-D released an ad in July 2009, showing a Blast destroyed by an automobile crusher.

Yet this 10 year Blast experiment (selling a lighter, sportier bike for first-time purchasers) is now going to be repeated with the Street 500 and Street 750 models. Before marketing even begins, one  obvious problem with this approach is that a 500cc bike is too powerful for beginners...so who is going to buy it - certainly not riders in the market for the more sophisticated Japanese models. And it's unlikely that this bike can find much traction in the already mature Indian motorcycle and scooter market.

2 comments:

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