Harley-Davidson Inc. will invest up to $825 million over the next five years to “change the trajectory” of its business, including the long awaited introduction of an electric motorcycle and other models targeting urban riders and emerging markets.
The “More Roads to Harley-Davidson” plan is intended as an acceleration of a 10-year strategy the company introduced last year to increase ridership, expand internationally and introduce 100 new models.
“Alongside our existing loyal riders, we will lead the next revolution of two-wheeled freedom to inspire future riders who have yet to even think about the thrill of riding,” said Matt Levatich, Harley president and chief executive office.
The Milwaukee-based motorcycle maker says the updated plan will create $1 billion to $1.5 billion in addition revenue by 2022, a 3.8 to 5.5 percent compound annual growth rate for its motorcycles and related products segment. The segment’s revenue has decreased the last three years by more than $650 million.
The plan is funded by $450 million to $550 million in operating investments and $225 million to $275 million in capital investments.
A portion of those investments will be funded by cost reductions through prioritization, automation, continuous improvement and reallocating capital.
Harley’s first electric motorcycle, LiveWire, will be launched in 2019. The company also plans two additional models in 2021 and 2022 and expects additional lightweight models to launch in those years as well.
“Our plan will redefine existing boundaries of our brand – reaching more customers in a way that reinforces all we stand for as a brand and as a company and we can’t wait to kick it into gear,” Levatich said.
Known for its heavyweight motorcycles, Harley plans to expand into the middleweight segment with a new 500 to 1250 cc platform that will include adventure touring, custom and streetfighter models.
The company is also expanding into the small displacement segment in Asia, launching a 250 to 500 cc motorcycle in India within the next two years.
The plan also includes improving access to Harley by elevating its website, creating strategic alliances with e-commerce providers and adding new retail formats.
Harley also plans to increase its investment in China, leveraging a new production facility in Thailand and adding a distribution center in China in the near future.
