Delays in marriage, childbirth cause problems for Harley-Davidson

Ridership gains have not translated into improved results for the company

Problems for Harley-Davidson include difficulty modeling future demand
Riders depart Harley-Davidson’s Milwaukee headquarters on the first leg of the MDA Ride for Life.

Last updated on July 30th, 2019 at 04:18 pm

Harley-Davidson has been working for years to attract younger and more diverse riders to motorcycling. While those efforts are showing signs of progress, the company’s chief executive officer says changes in when major life events happen for people are causing problems for Harley-Davidson.

Matt Levatich noted on Harley’s earnings call last week that many of the company’s efforts have aimed to “fatten the tails” by attracting more younger riders to the sport and extending the time older riders continue to participate.

Harley has seen success with younger riders in particular with ridership among 18- to 34-year-olds up 24% from 2002 to 2018. Overall ownership of Harley’s in the U.S. reached an all-time high of more than 3 million, the company said.

Among the problems for Harley-Davidson is those gains have not translated to improved results for the company, partially because prices for used motorcycles have been lower in recent years.

New retail sales in the U.S. are down 6.5% through the first six months of 2019 after decreasing 10.2% in 2018. Retail sales have been down each of the last four years and are on pace to be down nearly 47,000 from the most recent peak in 2014.

Analysts asked Levatich if Harley would reach a point where its gains among younger riders would cancel out losses of baby boomers exiting the sport. Levatich said changes in late-stage life events are making it more difficult to predict when demographics might turn in the company’s favor.

“People getting married later, having children later and we’ve historically seen a sweet spot, if you will, of reentry into motorcycling after people get through their family years, sort of mid 40s range,” Levatich said. “We are seeing that shifting a little bit out as people emerge from their family years a little bit later.”

He said while the trends are causing problems for Harley-Davidson’s models of future demand, he is encouraged by its efforts to bring new people into the sport.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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