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Harley-Davidson adopts a new strategy following its sales slump

From Livewire to “Rewire”, Harley rethinks its strategy.

Monzit Purugganan Monzit Purugganan on May 05, 2020
Harley Davidson

Its been a tumultuous couple of months for Harley-Davidson. With a sales-slump exacerbated by the COVID-19 pandemic and management shakeup from the higher echelons of power, its new leadership is now repositioning its strategy just to keep the brand afloat. For the past couple of years, Harley-Davidson has been struggling to keep up with the market as its fanbase is aging and new buyers are just looking elsewhere but Harley-Davidson.

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Harley Davidson in Financial Distress

Before the COVID-19 practically wiped out the sales for Harley-Davidson motorcycles for the first quarter of the year, the old strategy of the brand was coined as “More Roads to Harley” by its former CEO, Matt Levatich, to give way for more exciting motorcycles to try to attract more customers. This resulted in the development of their first electric motorcycle, the Livewire and new upcoming models, the adventure tourer Pan America and the street fighter Bronx, motorcycles Harley-Davidson never produced before. Levatich was betting big that these new models could attract new customers they desperately needed. 

Harley-Davidson Assembly Line
Harley Davidson Street
Harley-Davidson

However, now that Harley-Davidson is under the new leadership of their new CEO, Jochen Zeits, he now proposes a new strategy, dubbed “The Rewire”, it now seeks to refocus its energy on a market that it knows best and on a product that it knows best — cruisers. It focuses on five pillars as a key to their return to success: Enhance core strengths and better balance expansion into new spaces; Prioritize the markets that matter; Reset product launches and product line up for simplicity and maximum impact; Build the Parts & Accessories and General Merchandise businesses to full potential; Adjust and align the organizational structure, cost structure, and operating model to reduce complexity and drive efficiency to set Harley-Davidson up for stability and success.

In total, since we’re gonna be seeing its focus veering away from newer concepts, we can expect Harley-Davidson to pull the plug on projects that have little potential. Thus, some projected models we were excited to see could be very well in jeopardy. The Pan America and the Bronx have not been axed just yet as they remain under the “Reset product launches” guideline and they confirmed that they remain committed to developing their Adventure Touring, Streetfighter, and electric motorcycles. 

Harley Davidson Flat Tracker

As far as growing its customer base is concerned, its existing models are said to be far from capable of attracting newer customers to save the company. It seems that they have chosen what seems to be a safer path for them by prioritizing short term profit over the long term survival of the company. While indeed, their core strength has always been their cruiser motorcycles, as much as they want to, they just can’t afford to take the risk in research and development of newer motorcycles. They have no choice but to play it safe — for now. 

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