During much of the 1990s, if you wanted to buy a new Harley-Davidson, you could expect to wait three or four months for delivery, in what was a deliberate strategy by the company to sell on exclusivity. According to a new report, it sounds a whole lot like where Harley will head in the 2020s.
The Wall Street Journal recently got their hands on a memo sent by Harley to dealers earlier this month. The memo said that a big majority of dealerships wouldn’t be getting a single new Harley sent to them to sell this year. The memo said that the plants—which are reopening this week—will be limited in production. They won’t, for now, make every motorcycle in the Harley lineup but only its most profitable ones, and in a limited set of colors.
This appears to be a tactic to dry up inventory.
From the WSJ:
By having fewer motorcycles in the market, Harley said it is trying to appeal to customers of premium-priced brands with limited availability. That approach is common among makers of sports cars and some luxury products that keep manufacturing volumes well below demand for them.
“Our strategy to limit motorcycle product in the showroom is purposefully designed to drive exclusivity,” Ms. Truett said in her memo.
Harley projects that dealers’ stocks of new motorcycles will fall by 65% by year’s end, Ms. Truett’s memo to the dealers said. “Dealers should plan for an extremely tight year from an inventory perspective,” she wrote.
Somewhat unsurprisingly, dealers aren’t too jazzed about all of this.
Some U.S. dealers said the production cuts will sap further sales at dealerships that were closed for nearly two months. “You’re not going to catch up,” said Zoli Dudevsky, owner of a Harley dealership near Cleveland.
But the strategy does fit in with recently named CEO Jochen Zeitz’s plan to make Harley a more focused and likely smaller company, as opposed to his predecessor Matt Levatich’s expansion plans, which were focused on smaller motorcycles to sell mainly overseas. The two visions really couldn’t be more opposing, one an expensive bet that Harley can compete almost anywhere, the other a cheaper retrenchment into turning Harley more fully into what it is at its core, the maker of very expensive, very heavy toys, primarily for Americans.
We’ll see where this goes from here but the evidence is increasing that when Harley ousted Levatich the direction of the company didn’t just veer left or right, it was more like a U-turn, the reanimation of an old (and largely successful then, it must be said) strategy from decades ago.