Harley is going to pare down the production of slow-selling models as its factories spin back up.
Kyle Hyatt/RoadshowHarley-Davidson was in trouble before all of the coronavirus shutdowns, and things haven't gotten a lot better in the interim. But now, as H-D's factories in the US start to get back to work, the company has a new plan to break itself out of its longtime funk.
Part of that involves paring operations back -- specifically production. The company is going to be making fewer models, with fewer available options and in fewer colors, and then they're going to make fewer of them, according to a report published Wednesday by the Wall Street Journal.
It seems Harley's new boss, ex-Puma exec Jochen Zeitz, wants to use this new exclusivity of models at dealers to drive sales. Think of a Ferrari dealership, right? They don't have dozens of cars just hanging around waiting for someone to come and buy them. They have one or two examples of most models, and customers have to order a car. Harley wants to do the same.
That's all well and good, but where does that leave dealers? If the factory isn't making many bikes, that means dealers can't expect to have stocks replenished as bikes sell -- around 70% of dealers in the US won't receive any more new bikes this year, according to Beth Truett, director of product sales for H-D.
If that sounds like a recipe for empty showrooms and possibly struggling dealers, I agree. Harley's answer to dealer concerns over this seems to be to sell more used motorcycles. This is in contradiction with Milwaukee's previous directives that discouraged the practice in the belief that it cannibalized sales of new bikes.
Will all of this work? Will it help to put the brakes on the downward spiral in which America's oldest continually running motorcycle company finds itself? Or will it accelerate it, with dealers unable or unwilling to adapt to the new style of sales and all the changes that it requires? At this point, it's hard to be optimistic, but we'll keep some fingers crossed.
Harley-Davidson didn't immediately respond to Roadshow's request for comment.
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