2021 is an important year for Harley-Davidson. Almost a year to the day since former CEO Matt Levatich was sacked (alongside a good chunk of the former execs) and new bossman Jochen Zeitz introduced a conservative new plan for recovery, the Motor Company still has a lot of work to accomplish.
It started things slowly in January by confirming which models would be back in its 2021 lineup and which ones would get the axe. It also confirmed that after over a year of hyping, the long-awaited Pan America was finally going to debut on February 22.
Harley has now unveiled all the details of its big five-year strategy, called Hardwire. It isn’t nearly as revolutionary as the last time the brand announced it had ideas, but there are a few interesting points worth highlighting.
The Rewire restructuring got the ball rolling in the spring of 2020 and involved a return to basics for the company with an increased focus on staple products. The new Hardwire plan, which will inform the company’s decision from 2021 to 2025, pretty much picks up where Rewire left things off at the end of 2020.
The common thread and overall theme between the two strategies are vastly similar. Harley’s goal is to continue to strengthen the company's supporting pillars before carefully building on top of them.
Hardwire’s big lines are the following:
- Profit focus by focusing and investing in its strongest, most profitable segments namely touring, cruisers, and trikes.
- Selective expansion into popular segments (adventure touring and mid-size cruiser) and on its core markets (U.S., Canada, U.K., France, DACH (Germany, Austria, Switzerland), Italy, China, Japan, Australia, and New Zealand).
- Lead in the electric segment by creating a separate, electric-oriented division;
- Growth beyond bikes by expanding complementary businesses including parts and accessories, merchandise, and financial services.
- Customer experience by putting them at the forefront and growing the connection with riders and non-riders.
- Inclusive stakeholder management by aligning employees and shareholders’ rewards, encourage a more diversified workforce, creating a sense of community with the dealers, and aim for a net-zero environmental impact.
The company also unveiled its 2020 Q4 results that are deep in the red, posting total revenue of $531M for the motorcycle segment—down 39 percent compared to 2019. For all of 2020, Harley is 29-percent behind the previous year. Sales of new motorcycles dropped worldwide with a Y.O.Y. difference ranging between -8 (Asia Pacific) and -39 percent (Latin America).
Between a challenging year on the motorcycle sales front, a decision to exit a slew of markets, and a decrease in inventory volumes to create more demand, the numbers aren’t exactly shocking.
The company banks on its new corporate strategy to carefully but steadily grow over the next five years. This should ultimately lead to a small but positive, single-digit revenue increase.
The era of the Hardwire has begun.