Harley-Davidson has been forced to take executive action as a result of massive dips in profits.
Old News
Its old news that Harley-Davidson is closing plants in the U.S. The company has been talking about this since early 2015 and a steady decline in sales, along with less-than-favorable profit gains in many consecutive months resulted in the news that the company would be closing the Kansas City plant.
Very Real Troubles
For any company, regardless of size, a net income reduction of over 80% would certainly cause concern. For Harley-Davidson, the world's largest manufacturer of heavyweight motorcycles, it certainly means that the company has to do an immediate and complete revamp of priorities, goals, and strategies. The company has faced steady revenue decline for almost 5 years now. No one wants to think closures and unemployment. However, in terms of business survival, this is often the first step in recovery.
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A Time For Change
The make has been a leader in motorcycle production capturing a large share of the market. However, every business has a cycle and this business not only needs new motorcycles on the market, but also new riders to usher in a new generation of Harley-Davidson enthusiasts. In order for H-D to survive, they need to cater to a younger market.
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Relevance
The motorcycle market itself is growing. Honda, Yamaha, KTM, Suzuki, and others continue to grow as they directly cater to a wide market with different interests and budgets. While Harley-Davidson offers a variety of models, few of them are exactly practical, affordable, and viable for most commuter, student, working, and even recreational riders. In recent years, the company has attempted to appeal to a larger market by offering the Street 750 and similar models.
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A New Image
While the company is attempting to cater to a larger demographic, the "Harley rider image" is also under scrutiny from the up-and-coming generation. Models like the NightRod and the Muscle did little to appeal to a younger generation and these models are still somewhat of a sore subject among the purist in the culture. The conflict between old stereotypes, die-hard bravado, and new-age culture is the real issue when it comes to creating new riders, keeping the existing ones, and growing the community.
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Company Future
Harley-Davidson received undue criticism for its decision to close plants. Of course, that means that good American workers are out of a job, and no one can dispute that it is a bad thing. Strictly from a business perspective, H-D is in a recovery phase - a period of consolidation and strategic moves. Better motorcycles are good, more models and more options are all great. However, it is the forging of a new generation, and how the company goes about creating an environment suitable for new riders to embrace the lifestyle that will define the success of the company in the end. As of today, it is the very much expected release of the e-bike, project Livewire that has many people teeming with anticipation. H-D has made it well known that the new era of the brand begins then.
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