Harley-Davidson Thinks It Can Quadruple Profits Even As Dealerships Close And Sales Plummet

Harley-Davidson's sales have been in freefall for decades now, as older generations stopped buying new motorcycles, and younger generations don't want or can't afford the Motor Co.'s offerings. So color us surprised when the new CEO announced his intent to quadruple profitability in less than five years.

Photo by: Harley-Davidson

By: Jonathon Klein

May 6, at 7:02am ET

Comment

There's a line in Harley-Davidson's "Back to the Bricks" strategic plan that was the impetus for this article, as it's utterly confounding in every sense of that word. The new future-forward plan, the plan to right the ship, as it were, reads, "The Company (Harley-Davidson) is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029."

I say this as a lover of the brand, who wants to see Harley survive into perpetuity, and who's genuinely supportive of everyone working there, but was whoever wrote that line stoned out of their minds? I get that weed isn't yet legal in Wisconsin, but that, along with a few other choice ideas contained within that document, sounds like my buddies and me after a few joints around a campfire back in the day.

Because, as someone who's been covering the industry for a decade now, and who's ridden the company's motorcycles, and watched the overall sales trend and industry shift this way and that, unless Harley-Davidson is planning to stop selling motorcycles and switch to said illegal substance, converting the company's plants to...well, growing plants, just how are you planning on quadrupling profitability in less than five years at a time when the world is quite literally on fire?

There aren't just headwinds for Harley-Davidson, but gale-force hurricanes. And you know who's been defunded? FEMA. Both in reality and in this very stretched metaphor.

First and foremost, let's discuss just how clueless that original statement is. We're at a point in Harley-Davidson history where there hasn't been a single week in which a dealership hasn't closed down or sold off to some property developer. You see it time and time again, the headline reads, "100-year-old dealership shutters doors," or "Harley dealership faced with mounting costs, decides to close," or "Economics have forced consolidation among state's Harley dealerships." It's become such a trend that after the first 10-15, we stopped covering every dealership closure.

Moreso, those AI-slop outlets that deal in sensationalist headlines that drive idiot clicks have used the closure trend to game Google's algorithm when Harley closes its dealerships for regular holidays. Holidays that everyone closes down for.

Tell us what you think!

View

Comments

So how, in Harley-Davidson's infinite wisdom, is it planning on doubling dealership profitability by next year, and then doubling it again by 2029? Right now, Harley's losing money hand over fist with LiveWire. Sales of its regular motorcycles are through the toilet. And it sold off a good portion of its cash cow, its financial arm, to private equity. Likewise, the only new motorcycle on the horizon is the brand's entry-level motorcycle, which has yet to be seen or even previewed, and the concept of the RMCR sport bike, which is purely a concept and wouldn't even begin production until next year at the earliest. So where does that doubling of profitability come from? Firing dealership staff? More predatory financing terms? T-shirts?

I, honestly, can't tell you, as Harley-Davidson's plan only states, "Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company's new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection."

But even those additions to that vagueness don't hold water, as Harley-Davidson's brand cache has suffered in recent years due to unforced errors on the part of its executives, as well as its catering toward a demographic that's dying, dead, or isn't even buying motorcycles anymore. The industry has moved off from $50,000 baggers. They've moved on from the Hells Angels and Easy Rider. They've moved on from heavy, cumbersome things. And the folks buying motorcycles these days are the youths with their EV dirt bikes (ahem, Harley-Davidson electric Peashooter is right there), and entry- to middle-weight motorcycles that don't cost the price of a nice pickup truck.

The time for boomers is over, and Harley-Davidson desperately needs to figure that out. Hell, it's been over for the last two decades, but the company still can't seem to understand that reality.

I know this all sounds like a rant, and it is. But I get irrationally angry about Harley-Davidson because it's such a lay-up of a company to make successful. Yet, the powers that be seem to be so blind of reality and its history, I get to the point where I'm yelling at my computer screen as I write things about the Motor Co.

Like, you're Harley-Fucking-Davidson. It's not that difficult.

Want to know my plan for Harley-Davidson? Easy. Firstly, fire every damn consultant associated with BlackRock or McKinsey. They're MBA suits who only know how to cut blue-collar and white-collar corporate jobs. They're idiots, and they've shown time after time that they only lead to failure with massive executive golden parachutes. Second, partner with a Zero or Stark or some other EV dirt bike company and build an EV Harley-Davidson Peashooter built to capture the youth riders, as that market is exploding.

Third, we're killing LiveWire. It was DOA, but with all the cash saved by shuttering it, you could make Harley's EV dirt bike immediately profitable. And no, the Honcho ain't what either LiveWire or Harley needs, I'm sorry. Fourth, and something I've been yelling about for years now, Harley needs its entry-level motorcycle ASAP, and one that can compete on the world stage with Royal Enfield, Triumph, and CFMoto. It needs to be cheap, reliable, and most of all, easy to ride. If there was a sector that Harley is truly ignoring, one that's driven record growth everywhere else, it's that one. And no amount of "We're actually a luxury brand!" talk will save it from that reality.

Harley-Davidson also desperately needs a middle-weight adventure motorcycle on the Pan America platform. The 1250 Revolution is a great engine, but it's heavy, it's powerful, and the overall bike is too big and too expensive for most folks. Harley needs a Yamaha Tenere fighter in addition to the BMW 1300 GS fighter. The brand also absolutely needs to start advertising to the upcoming demographics like Gen Z and Gen Alpha. Yeah, Millennials, you're already too old, and your perception of Harley-Davidson is already set. But those two generations? Harley is an unknown, and that Peashooter, among entry-level bikes, are great ways in. So gone are the days when Sturgis or Daytona. You need to look outside traditional Harley spaces.

Lastly, Harley execs, I'm begging you, make shit that's affordable. Most of the world is suffering through yet another once-in-a-generation economic downturn. Wages are flat, inflation is through the roof, interest rates are insane, and we're all living paycheck to paycheck for the most part. Hell, most folks are one ER bill away from living on the street. So when you walk into a dealership and see every motorcycle start at $25,000, you're more likely to lose a potential customer. And yes, that's why the used market exists, but even used Harley's cost a trillion dollars these days.

You've built a system for the Boomer-centric '90s where they were flush with cash, interest rates were low, they had no college debt, and they weren't spending more than half their monthly paychecks on rent or housing. That reality doesn't exist anymore, and it isn't coming back.

Honestly, I want Harley-Davidson to succeed. I want the brand to survive. I want to see it flourish and renew itself as it has over its hundred-plus-year history. I want a future where my kids still see Harleys on the road or buy them themselves. But this type of pie-in-the-sky talk while reality is staring you right in the face is...disconcerting to say the least. And the cause of this rant to say the most.

If Harley's new CEO Artie Starrs, who's the one supposedly behind this plan, wants to talk through the finer points, I'm around. But we're gonna have to see if this pays off for them, Cotton.