Is HD Turning Into a Brand for the Super Rich?
Recent business strategies by the Motor Company sideline long-time supporters.
I’m not one of those Harley Davidson bashers, but I am concerned about one major trend: Are they trying to turn the company into a ritzy, high-and-mighty luxury brand? Who’s running the show over there, Jochen Zeitz or Elon Musk?
I caught this the other day, at the very bottom of a story dealing with the Motor Company’s recent finances. It concerns a new financial term HD is using.
It’s called “Unit Profitability” and they have not used it in public very much, as far as I can tell. It means how much they make off of you and me when we buy a Harley Davidson motorcycle.
Big Leap
Turns out, Harley Davidson made a profit of $3,500 for every motorcycle they shipped in fiscal year 2022.
That’s quite a jump from 2019 when that figure was $1,300. The pandemic skewed the numbers in 2020 and I could not locate that measurement for other years.
Why am I bringing this up?
Because it sure seems like it is getting harder and harder for ordinary people to come up with the money to buy a new Harley. Or for that matter, a used Harley.
Oh, Those Surcharges
If you want entree into the Harley Davidson world today, you have to shell out nearly $14,000 for a Nightster after all the taxes, freight and maybe one of those demented surcharges.
The second cheapest bike is a Softail Standard at $14,399 MSRP and it’s cheaper than the Sportster S at $16,399. Seriously, who thought we’d ever see that?
It isn’t just we, the lovers and buyers of Harley Davidson, who are being squeezed out of the picture. This insanity is killing some of those who actually sell the bikes.
So Long, Black Hills Harley
Have you noticed a lot of the old family-owned dealerships are going belly up, selling out to corporate interests?
The latest is Black Hills HD, informal host of the world-renowned Sturgis rally, which recently sold out to Sonic Automotive.
Sonic Automotive is the fifth-largest automotive retailer in the country. Its stated goal is to “fulfill ownership dreams, enrich lives, and deliver happiness to our guests and teammates.”
They could enrich my life and bring me happiness by haggling with me like old times and old friends, not treating me like a “unit.”
Marketing Malarkey
So the old dealerships are being replaced by bright and shiny buildings full of glad-handing salesmen who are just as friendly as the old ones but much less inclined to negotiate with you over the price.
I have witnessed this personally too many times. Remember, they have to keep in mind that $3,500 profit per unit.
It’s all part of HD’s recent Rewire and Hardware strategies. They use terms like “holistic brand experiences,” “enhanced digital touchpoints” and other marketing mumbo-jumbo, but basically it boils down to two things.
‘Out With the Old’
Out with the old and in with the new. That translates into higher prices, bigger profit margins, less willingness to cut a deal and eliminating a lot of the old favorite models and “under-performing” dealerships.
Zeitz, who took over a few years ago as CEO, is well-known in the business world, partially because he revitalized Puma. But there is a huge difference between motorcycles and women’s pink leggings.
I understand streamlining business operations, but it sure seems like he is putting a lot of stock in Millennials, who he expects to be his eager, future customers.
Uber Cool
Millennials don’t particularly want to even drive cars, much less motorcycles, if you believe the polls and surveys coming out nowadays. They’d rather click on their Uber app, sit back, chill and wait for their ride.
Now, I understand prices are going up everywhere, but there are just too many holes in these new Harley Davidson business strategies, and they are losing a lot of loyal customers because of that. I’ve witnessed that personally, too.
And what the devil ever happened to the Bronx Streetfighter?
Photos: Harley Davidson
