Harley Sales Slowing Down?

Are Harley Sales Slowing Down?

Amid disappointing sales, Harley’s stock price is down about a third from a year ago, and the company’s share of the market for large motorcycles in the U.S. slipped to 52% in the third quarter from 56% two years before. A spate of recalls of defective bikes hasn’t helped.
As Harley-Davidson and its dealers look for ways to regain lost market share, they are finding it hard to let go of the macho act that has worked so well with baby-boomer men.

Harley Davidson Sales

Chief Executive Matt Levatich has vowed to step up Harley’s long-standing efforts to appeal to younger adults and women in general. The Milwaukee-based company says it plans to raise its marketing spending by 65% in 2016 as part of a drive to stop the slide.

Harley Davidson Sales Slowdown
Harley won’t discuss those spending plans, but its dealers are putting out a mixed message. While many are trying to attract younger buyers and women, much of their marketing still caters to grizzled men reliving their youth.

The Doobie Brothers, a band whose heyday was in the 1970s, performed at the grand opening of a giant dealership in Scottsdale, Ariz., in November. Prime floor space often goes to big and loud chrome bikes rather than sleek and modern models. At periodic “bikini bike washes,” Harley dealers hire women in skimpy swimwear to sponge down motorcycles.

That sounds like something “for old dirty pervs,” said Ms. Villagran. “It’s not like Harley is having wash parties with young guys washing my bike, right?”

Harley said it sold more than seven times more large motorcycles to women than its nearest competitor in 2014.

Harley’s overall sales of motorcycles and related items totaled an estimated $5.33 billion in 2015, down about 4% from a year earlier, according to FactSet.

Harley doesn’t disclose sales for specific models. The company’s chief financial officer, John Olin, told analysts in a recent call that the company “couldn’t be more pleased with the overall rollout of the Street.

Some dealers don’t see a burning need for change. Bob Parsons, the 65-year-old founder of GoDaddy.com and owner of the Scottsdale Harley dealership, said: “Everybody likes to look a little bit badass, and nothing says that better than a Harley shirt with a skull on it.” Harley bikes are for those who can afford them, and those people are generally older, Mr. Parsons said.

Others are tweaking the message. Smoky Mountain Harley-Davidson puts on concerts at its store in Maryville, Tenn., often featuring younger country stars such as Jason Isbell and Sturgill Simpson. “It exposes young people to our brand,” said dealership owner Scott Maddux. He also donates motorcycles and parts to high schools so students can learn by customizing them.

If Harley doesn’t win over the younger generation, “what am I going to be doing in 10 years?” asked George Gatto, a Harley dealer in Pittsburgh. Mr. Gatto, 53, has rejuvenated his staff since taking the dealership over from his parents a few years ago. Many of his father’s employees looked “like Santa Claus in leathers,” he said, and weren’t good at dealing with women or young people. He recently hired a 22-year-old woman as his marketing manager.

Mr. Gatto doesn’t want to go too far. He typically hires classic-rock or blues bands to entertain customers at special events. Hip hop would be risky, he said: “The core riders are not going to like that.”

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