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Uneasy Rider: Harley swerves to avoid demographic wall
Wed Mar 15, 2006 1:10 PM GMT
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By James B. Kelleher

CHICAGO (Reuters) - Harley-Davidson Inc., the U.S. motorcycle maker, insists it isn't nervous.

But analysts and others who watch the company say it's in the middle of a coming-of-age drama that might be called "Uneasy Rider."

As the Baby Boomers who transformed Harley's rumbling, lumbering bikes from countercultural totems into American icons enter their senior years -- the leading edge of the generation is turning 60 this year -- they're increasingly in the market for knee and hip replacements, not Harley's notoriously bone-shaking bikes.

That's forcing the Milwaukee, Wisconsin-based company to scramble to find new customers among women, blacks and Hispanics -- groups that have not been traditional Harley-Davidson riders.

The quest has involved the development and rollout of new products, like the 883 Sportster Low, built for smaller, lighter riders, and new marketing efforts, like Harley's TV ad campaign during the NCAA tournament this spring.

And the effort is showing some signs of success. Female ridership has quintupled in recent years. Today, women like Janeen Wingo, a 33-year-old resident of Calumet City, Illinois, who bought a Harley-Davidson 1200 Sportster last summer, account for 1 in 10 of the company's sales -- up from 1 in 50 just 15 years ago.

But as Harley-Davidson tries to adapt to the changing marketplace, analysts say it needs to avoid the pitfalls that other Baby Boomer-favored businesses like Levi Strauss & Co. have fallen into as they tried to navigate a similar transformation.

"How do they do it without hurting existing customers and destroying the brand?" says Geoff Meredith, the president of Lifestage Matrix Marketing, a California consulting group that specializes in aging baby boomers and has worked with Levi's. "That's the $64 million question."

For manufacturers of recreational vehicles, like Forest City, Iowa-based Winnebago Industries Inc., the aging of the nearly 80 million Americans born between 1946 and 1964 represents the beginning of a golden age.

For Harley-Davidson, it represents the end of one. While the company has been making motorcycles since 1903, it only really became part of popular culture -- and the popular imagination -- after World War Two. Two events stand out: the demise, in 1953, of Hendee Manufacturing, its sole remaining domestic competitor (and the maker of the Indian motorcycle), and the popularity, in 1969, of Dennis Hopper's classic countercultural road movie "Easy Rider."

"Half their demand is from guys 40 to 50 years old," says Bob Simonson, an analyst for William Blair & Company in Chicago.

But that cohort, Simonson and others says, can no longer be counted on to support the bike maker. "In the 13 years ended 2004, that group was growing at a 1 to 4 percent rate every year," Simonson says. "Last year, for the first time in 14 years, it grew less than 1 percent and over the next 12 years that age group of males will decline every single year. They're going from having the demographic wind at their back to having it in their face."

Joanne Bischmann, vice president of marketing at Harley, admits, "The demographics are changing" though she insists the change isn't as dramatic as some have suggested. "But that doesn't mean there aren't other populations we don't want to tap into."

To reach out to the black community, Harley has begun sponsoring the nationally syndicated show of Tom Joyner, an African American radio host whose program is heard by as many as 8 million U.S. listeners. Harley is also advertising during the nationally televised college basketball tou

 

Not just a problem for the MoCo but all retail manufacturers from TV's to Cars to Boats to Bikes etc etc.......I am right in the peak of the boomers (1953) and what I & my peers buy in the next 10 years is pretty much the crest of the wave so to speak......then it's downhill from there. Prices will fall dramatically on all this stuff.....including coastal real estate once my peers purchase their retirement home. For me......I still have a 8 year old at home.......I'm dying with my black Harley Davidson boots on. And they can have my motorcycle when they pry my cold dead fingers off the handlebars.

 

I dunno... I go to the dealership and I see a LOT of younger guys/gals.... The old fellers are the people showing up to the local HOG meetings... I went to Raleigh HOG and felt like I was hanging out with my mom and dad's friends. Just felt weird.

I don't think Harley is out of the younger crowd because it does not appeal to the age.. I think it is because the price point is murder on younger people...

I bought my Harley because my wife and I were thinking about moving back to Chicago and me becomming a Fireman... That was over a $70k/year pay decrease for me... So... I bought the Harley now. My reason was simple, "I don't want to be 60 and getting my Harley." I did not want to have to wait and save up for all those years to get one... I broke my back 15 years ago and I am lucky to be moving around at all... I don't even want to think about what it is going to be like in 30 years when I am 60...

But... most people that I work with are more into the speed culture... we make good money and whatnot but they still want to buy the cheaper rice rockets and what not... What a lot of them do not realize (and you have to admit this is true of a lot of people my age) is that by the time they have bought 3 CBR 600 RRs they could have had one harley that is still around and actually worth something to both them and the market place.

But people my age do not look at it that way... it is all about instant gratification... And with Harley it is hard to get to that because of the price. I can buy a comparable sized Honda Cruiser for $8k-$9k right now... Wheras the Harley costs about what a commuter car costs. People like my dad (66) are in a better financial position to get a Harley and make that kinda payment.

Just like a lot of people... I started out on Ricers... I had two Katanas and a Vulcan Classic... Always wanted a Harley... With what I spent on the other three bikes I could have had a Harley a long time ago. What did I know? I am just a kid. =)

 

the thing with uneasy rider is about a month old the L model yes it's new but it is also replacing the hugger they seem not to be hurting to bad they are set to build a new musem they have had the same fan base thru there history the younger has trouble afordding the harley and trying to raise kids at the same time it's been that way for along time except for the hard core who at any cost will buy a harley.if you think i'm making this stuff up go to there web site that shows there stock.

 

I dunno, maybe I'm missing something here. Maybe I'm just not paying attention. It seems to me I see alot of young people riding Harleys. Maybe I'm missing the big picture.

 

My opinion is that, as stated above, many young people are into the "go real fast" thing, so they ride the Kawasuzondaha GSZXRR's. When we're young, mortality is a vague concept- at least it was for me! I did not get into riding until a couple of years ago, at 41. I liked it when I was a teen, but I knew (fortunately) that I would ride very fast, and probably crash. I did some time on a fast bike for the past year, and decided that zinging around mountain roads at warp speed was not only trouble waiting to happen, but also too much work, and not enough fun.
Strangely, I never thought I'd own a Harley, but as I found I was going too fast on my Speed Triple, a couple friends let me ride their HDs, and I found them comfortable, and easy to just cruise. Quickly after that, I sold the S3 (and my '56 F100) and bought my Softail (used). Financially, too, many young people simply can't afford 15k for a Softail or Dyna, and the Sporty has gotten the rep as a "girl's" bike (NO offense to Sportster owners!!!). Unfortunately, for the money, the UJMs go, stop, and handle better than an HD. Harley's are incredibly unique, sort of like hot rods. Either you get it, or you don't.
I hope this has made sense- I tend to ramble at times!

 

you did good and correct when we are young we want to go fast and cheap.

 

Well, it's not all about money. This may come as a shock for you, but not everybody wants a Harley. If you don't want one you don't buy one. Let's face it, if you're into sportbikes you're not going to be happy on a Harley. I also have friends that make alot of money, but they still don't ride Harleys.

I think we will see a decline in cruiser sales in the years to come. Riders starting on sportbikes will probably move to naked sportbikes instead of cruisers when they get older. Those bikes have nearly as good performance as true sportbikes and are more comfortable than cruisers. Cruisers will (of course) not die completely but they will probably less common in the future.

I think Harley are doing the right thing trying to attract new riders to the brand. They probably need to attract young riders early and then try to keep them loyal to the brand. The japanese manufacturers own the sportbike market and thus have the great advantage that when the riders get older they stay loyal and buy something less wild from the same manufacturer. Harley is in a tough situation. They need to attract young people and it won't be easy. Buell is kind of a backdoor into the Harley brand and that's a good thing though.

 

dont you ever belive it check the record books harley is number one.in sales.again

 

I must be getting old. When did Levi's go out of style? I love my Harley and my Levi's.