Harley-Davidson CEO Matt Levatich rolled out an aggressive “more roads roads” to Harley growth plan Monday that includes an expanded lineup of lighter motorcycles, smaller urban retail stores, a new digital strategy and an international push as U.S. sales fall.
The company’s launching by 2020 a new platform of 500cc to 1250cc middleweight bikes and a even smaller bike for emerging markets in Asia, the company said in a press release.
“We’re gonna be doubling down on existing products. We’re gonna invest in an all new middleweight platform, which is a modular chassis and a very core engine technology to go in three dramatically different spaces: Adventure touring, custom and street fighter,” Levatich said in an interview with CNBC’s Morgan Brennan.
Harley’s shares have fallen close to 13 percent so far this year and profits have dropped as the 115-year-old company struggles to find a foothold among millennial buyers, which are turned off by the high prices for the heavy bikes.The 0.7 percent gain in international sales during the second quarter wasn’t enough to offset a 6.4 percent in the U.S.
The company’s expanding its push overseas, particularly in India and China, it’s also launching its first electric motorcycle, LiveWire, next year with additional models through 2022. The company’s increasingly investing in production facilities overseas to reduce costly tariffs that can, in some cases, double the cost of a bike.
“We’re only doing that because these are important growth markets for the company that without those investments we wouldn’t have access to those customers, at any kinda reasonable price,” he said in an interview.
In June, the motorcycle manufacturer announced that it would move its European production out of the United States because of retaliatory tariffs from the European Union. While its bikes were once taxed at 6 percent, the new tariffs raised that to 31 percent. Harley-Davidson was already under pressure because of the U.S. tariff that levied a 25 percent tax on steel and aluminum imports.
“When we say this is about building the next generation of riders, this is a community of people that is, in the case of the United States, less than 3 percent of adults ride motorcycles. And that’s all brands and all types,” Levatich said. “So this is about opening up that community, making that community broader using product as a way to do that.”
This story is developing, check back here for updates.
Source : CNBC
