Harley builds fewer bikes for exclusivity

Harley-Davidson Kansas City factory waiving tariff president berlin production exclusivity

Harley-Davidson this week restarts production after a two-month closure over the pandemic with lower production rates for more “exclusivity”, the company says.

They claim 70% of US dealers will get no new motorcycles delivered this year.

Harley-Davidson Australia spokesman Keith Waddell says they “will have supply coming throughout the remainder of 2020”.

The lack of new product is largely because they have been closed since the pandemic was announced in March.

Exclusivity

However, it is also because new CEO and president Jochen Zeitz wants to make the brand more “exclusive”.

Jochen says his Rewire strategy will limit motorcycle product in the showroom and drive exclusivity.

This follows his recent announcement that the August 2020 launch of the new an America adventure bike and water-cooled Bronx streetfighter will be delayed until next year.

A company memo to dealers from product sales director Beth Truett says:

We are using this time to course correct and rewire the company in pursuit of making Harley-Davidson one of the most desirable brands in the world.

Jochen Zeitz with LiveWire rewire shares
Jochen Zeitz with the electric LiveWire

Harley in the news

Harley has been in the news the past couple of months ever since CEO Matt Levatich was sacked in February Jochen was appointed interim CEO and then announced as CEO on 8 May 2020.

Last week it was revealed that Jochen and senior VP and CFO John A. Olin bought millions in shares of HOG stock.

This seems to show a vote of confidence in the company by its executives, although some say it may be just for show to prop up the share price.

There is no statement from Harley about the share purchases and no record of Jochen’s salary.

However, the previous boss was paid a record $11m last year.

When he became interim CEO, Jochen implemented measures to ride out the pandemic recession including he and fellow board members forgoing salary/cash compensation.

The measures also include cutting back on all non-essential spending, temporary salary reductions, 30% reduction in executive leadership, 10-20% reduction for US salaried employees, no merit increases for 2020 and no new staff until further notice.

Jochen’s five-year “Rewire”strategy also involves expanding “profitable iconic heritage bikes” while committing to branching out to adventure touring, the new Streetfighter range and electric motorcycles.

Harley’s sales have been on the slide for several years. This video gives an entertaining history of the American icon’s problems.

6 Comments

  1. A- They wanna make HD the Rolls Royce of motorcycles, which is a bit idea considering the huge amount of HD already in “not royal” ownership.

    B- This exclusivity BS actually means to say: “we don’t wanna make bikes that costs us money and might stay sitting at the dealerships coz many of you guys might be too broke to buy anything”.

  2. I hope HD aren’t paying much for their CEO, the decision to make their bikes more “exclusive” is pure madness, their bikes will become exclusive when they go out of business due to declining sales.

  3. You don’t make a brand “desirable” by building less of them. You make it desirable by building them right, and providing outstanding customer service.

  4. Matching supply and demand are basic principles of economics, if you cut back supply you either fail to meet the demand at a certain price point or you increase the price to to reduce the demand until there is equilibrium. Wishful thinking of exclusivity doesn’t mean you can rewrite the laws of economics!

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