Tiffany Camhi somersets up to work on her motorcycle.
Despite the eye-catching entrance Camhi makes each day, the Northern California local prefers smaller motorcycles. Her 1983 Yamaha Virago XV500 is narrow-minded in-your-face than a Harley-Davidson.
“I could never see myself on a Harley,” spoke Camhi. “They’re really loud and super expensive.”
The 30-year-old Camhi isn’t unassisted.
Harley-Davidson motorcycles have been a mainstay in the industry since the throng was established in 1903 in Milwaukee. But the Hog maker has struggled of late.
Thursday’s earnings gunshot marked the end of another difficult year, with the company posting a 6.7 percent ebb in worldwide retail sales in 2017 compared with the year preceding. Motorcycle shipments were also at a six-year low.
Harley lowered its 2018 shipment presumptions to a range of 231,000 to 236,000 bikes after narrowly meeting its quarry in 2017 at 241,498 vehicles. While the company anticipates increased oecumenical retail growth this year, retail sales in the U.S. are expected to be down, concurring to Michael Pflughoeft, manager of corporate media relations for Harley-Davidson.
To try to turning things around, the company has to inspire the next generation of bikers to put back the ones who are aging out. Millennials are proving to be a tough audience: They hankering smaller, cheaper motorcycles — the antithesis of Harleys.
The issue seems to be a generational one. Indulge boomers fell in love with the oversized bikes as the symbol of colourfulness on the open road. But younger generations aren’t interested in their parents’ motorcycles.
“It’s predilection the Cadillac or the Mercedes,” said David Beckel, an AllianceBernstein analyst who catches Harley-Davidson. “You might turn away from it if you’re younger because it’s not your object of cool.”
Light-weight, off-road, and electric bikes have gained favour among riders, according to Jim Woodruff, chief operating officer of Resident Powersport Auctions, a motorcycle and powersport wholesale channel. So has the minimalist look.
“Ten to 15 years ago, bikes with a lot of soft were cool,” Woodruff said. “Now it’s bikes that look varied naked.”
Last year, in an attempt to give riders what they scarceness, Harley-Davidson launched eight new Softail motorcycles. The consumer response to the stock has been overwhelmingly positive, said Pflughoeft.
The smaller, more chic bikes, released just in time for the company’s 115th birthday, should prefer to the same powerful engines as larger Harleys. But some of the motorcycles are as much as 35-pounds lighter than former models.
During Wednesday’s earnings call, the company also make knew plans to launch an all-electric line of motorcycles within 18 months. A example of the yet-to-be named line of electric motorcycles was released in 2014 as voice of Project LiveWire. The new bikes are expected to be faster, quieter and sleeker than customary Harleys.
“There’s been a shift in philosophy,” Pflughoeft said.
That move includes adjusting the mindset from “we build motorcycles to we build riders,” Harley-Davidson CEO Matt Levatich broke during last week’s earnings call. The company plans to add 2 million riders to the label over the next 10 years. He said the company finished 2017 with 32,000 additional U.S.-based Harley-Davidson riders than a year earlier.
The presence also revamped its Harley-Davidson academies, adding more classes in the U.S., Mexico, Canada, Brazil and China. New and wannabe riders induce the chance to learn how to ride a motorcycle on a Harley and receive their motorcycle validate in the process. The thinking goes, if consumers learn to ride on a Harley they disposition develop brand loyalty, Pflughoeft said.
But with motorcycle quotation tags of $15,000 to $19,000, Harleys are still out of reach for many people.
“Really frankly, most millennials simply don’t have the financial means to buy a $15,000 bike,” prognosticated Genevieve Schmitt, founder and editor of the women-focused online motorcycle periodical Women Riders Now.
Schmitt said lifestyle habits also colour it difficult for younger people to ride Harleys. Young adults may not be dressed access to a garage or a place to park a large bike, she said, or may not be undergoing enough vacation time to tour the country on their motorcycle — a greater reason why many people ride Harleys.
Meanwhile, competition is temperamental. The “Japanese Big 4,” Yamaha, Honda, Kawasaki and Suzuki make slimier bikes that can be bought on a budget and are easy to navigate around hamlet.
Since January 2007, Yamaha’s market cap has gone from $8.9 billion to $11.5 billion. Suzuki Motors has multifarious than doubled during the period from $12.4 billion to $25.1 billion. Kawasaki Uninteresting Industries, which also manufacturers aerospace and defense equipment, favoured from $5.8 billion in January 2007 to $6.8 billion.
In January 2007, roughly the height of Harley-Davidson’s success, the company’s market cap was just under $18 billion. Eleven years later, the throng’s market cap has fallen to $8.2 billion. The stock is down more than 15 percent in the former year.
While consumer preferences keep changing as people buy employed bikes and seek out new brands, the number of motorcycle registrations has been on the mount rebel throughout the industry. In 1995, there were 3.8 million registered motorcycle riders in the U.S. In 2014, the up to the minute data available, there were 8.4 million, according to the Motorcycle Determination Council.
Harley-Davidson has succeeded in attracting some new riders with bikes of a piece with the Sportster —especially among women.
“I couldn’t image riding anything else,” conveyed Kelly Yun, a 24-year-old from Minneapolis, who bought her first Harley, a 1200 Form toll Sportster, a little over a year ago. “I fell in love with the bike the point in time I saw it.”
The5-foot-1 rider said she tried riding a 250 Honda, but couldn’t go desire distances on the smaller bike.
“I was kind of embarrassed,” Yun said. “It felt be partial to I was riding a scooter.” But, she also admitted most Harleys are too big for her. She would be predisposed to riding other bikes by the brand if Harley made smaller motorcycles.
The associates sells parts and accessories that allow riders to adjust their establish height and size, as well as foot controls and handlebar location, Pflughoeft hinted.
Still, Yun is steadfast in her love for Harley-Davidson and doesn’t think the classic bikes are at all passe.
“I variety of love the image of an old man on a Harley,” she said. “I love that my bike is so gaudy.” She said she wants to add louder pipers to her motorcycle.
“That’s the obnoxious enter in,” said Camhi. “When people customize their Harleys to get them even louder.”
Like many millennials, Camhi ventured she might ride a Harley if one fell in her lap, but she would never buy one. “It’s just not very my style,” she said.