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Motorcycles Harley-Davidson Has Missed the Mark in Electric Transportation

17:15  27 march  2021
17:15  27 march  2021 Source:   fool.com

Motorcycle Monday: Harley-Davidson UMG

  Motorcycle Monday: Harley-Davidson UMG Learn about this legendary classic. While there are many legendary Harley-Davidson motorcycles, the UMG is one which is sometimes talked about but often misunderstood to one degree or another. Part of the problem is that precious few have been preserved in the original trim, if at all, and there’s an interesting reason for that. Another is that some people flat-out don’t understand the origin or original use of the bikes. To help set the record straight, here’s some background to this classic American motorcycle.

The iconic Harley-Davidson (NYSE: HOG) brand is in trouble. The company has seen revenue fall for a half-decade, and earnings have evaporated. Strategies to get into electric motorcycles have largely failed, and the core business doesn't show any signs of a turnaround.

a motorcycle parked on the side of a building: Harley-Davidson Has Missed the Mark in Electric Transportation © Provided by The Motley Fool Harley-Davidson Has Missed the Mark in Electric Transportation

Despite all of these challenges, Harley-Davidson stock is up 82% over the past year, and investors seem optimistic about a turnaround. But there's good reason to think that won't happen for this leisure stock.

a person riding a motorcycle on a sidewalk: Harley-Davidson Livewire bike in a city. © Harley-Davidson Harley-Davidson Livewire bike in a city.

Harley-Davidson's motorcycle market is shrinking

One thing is clear: Harley-Davidson's market is getting smaller as the culture that brought the company to industry dominance diminishes. The customer base is aging, younger consumers are no longer interested in the look or sound of Harley-Davidsons, and growing markets adjacent to the motorcycle market have been difficult for the brand to enter.

Harley Cuts Breakout, Deluxe, and FXDR From 2021 Lineup

  Harley Cuts Breakout, Deluxe, and FXDR From 2021 Lineup Rewire strategy affects other Softail, Sportster, and Street models too.There’s more trimming than just the aforementioned models, so let’s take a closer look.

chart, line chart: HOG Revenue (TTM) © YCharts HOG Revenue (TTM)

The biggest challenge is that Harley-Davidson was always a culture brand, and that's what made it so powerful for decades. It wasn't just motorcycles -- it was people's apparel, the sound the bikes made, and long rides on the open road. As more people move to urban markets and look for less disruptive means of transportation, the culture looks out of date.

Going electric isn't enough

Harley-Davidson hasn't been completely surprised by the industry's changes -- it saw the electric vehicle market coming to motorcycles. But it miscalculated what kind of products consumers want and where its brand can connect. The current LiveWire products are a similar form factor to traditional motorcycles, but that's not where consumers are trending.

Harley Posts Unexpected Loss Ahead of Turnaround Plan

  Harley Posts Unexpected Loss Ahead of Turnaround Plan Harley-Davidson Inc. posted an unexpected fourth-quarter loss ahead of a new turnaround plan to revive the troubled motorcycle manufacturer’s fortunes. © Bloomberg A customer wearing a protective mask looks at motorcycles on display at a Harley-Davidson dealership in Oakland, California, U.S., on Thursday, July 16, 2020. Harley-Davidson Inc. is scheduled to release earnings figures on July 28. The Milwaukee, Wisconsin-based company on Tuesday reported an adjusted loss per share of 44 cents, missing analysts’ consensus estimate for a 23 cent-profit and below the 20 cents it posted a year ago.

Electric scooters are really where the growth has been, with Statista estimating that about 50 million electric scooters and bicycles were sold in 2020. Grand View Research estimates the electric scooter market will grow from $20 billion in 2020 to $42 billion in 2030. This is where the growth is, and Harley-Davidson is essentially absent. If it's looking to attract younger customers, scooters would have been a great way to grow the business.

Just getting into electric mobility isn't enough -- companies have to make the right products and have the right brands. Harley-Davidson is neither, meaning it is missing out on a huge growth market that's adjacent to its core products.

No easy answers

Management has tried to lay out a turnaround strategy. They want to get into used motorcycle sales, and expand the lineup of electric motorcycles and bicycles. But used bikes are just an easy revenue grab, and there's no indication that Harley-Davidson will build significant market share in smaller electric mobility products.

Harley kickstarts 5-year turnaround plan after surprise quarterly loss

  Harley kickstarts 5-year turnaround plan after surprise quarterly loss Harley kickstarts 5-year turnaround plan after surprise quarterly loss originally appeared on Autoblog on Tue, 2 Feb 2021 10:07:00 EST. Please see our terms for use of feeds.

The future is looking dimmer by the day for Harley-Davidson. Sometimes an iconic brand like this simply sees the world pass it by.

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Harley-Davidson Sales Finally Hit Paydirt Again .
It's the motorcycle maker's best first-quarter performance in years.The gains follow a change in when the bike maker introduces its new models, from late summer to early in the calendar year, to coincide with when bike riders are most interested in buying, and suggests the "Rewire" roadmap CEO Jochen Zeitz has laid out for turning the company around is gaining traction.

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