Harley-Davidson now seeking net gain of 1 million riders by 2027

Company refines target to account for exiting riders

Harley-Davidson riders

Last updated on September 26th, 2019 at 01:01 pm

Milwaukee-based Harley-Davidson Inc. changed its 2027 target on Tuesday from adding 2 million new riders in the U.S. to growing total Harley ridership to 4 million.

The shift means the company is now seeking a net gain of 1 million riders compared to 2017.

Matt Levatich, president and chief executive officer of Harley-Davidson, has previously said the company’s data analytics show more entrances and exits from motorcycling on an annual basis than Harley expected when it set the 2 million-rider target in 2017.

Harley previously said it ended 2018 with 52,000 more riders in the U.S. than it had at the start of the year. While that pace would only put the company halfway to its goal by 2027, executives have said they expect gains to ramp up as Harley’s investments gain momentum.

“We’re on a quest to build the next generation of Harley-Davidson riders. We are activating our refined plan with focus and an intensity to create new pathways to Harley-Davidson and expand access and appeal to more people around the world,” Levatich said in a news release announcing the changes.

In 2017, Harley announced a 10-year strategy to transition the company from a focus on building motorcycles to building riders as the industry confronted declining participation in the sport. Last year, Harley said it would invest in accelerating those plans through $825 million in investments that included smaller and electric motorcycles along with other initiatives.

In its latest update on Tuesday, Harley also altered its target for its international business and now aims to grow international revenue to 50% of the company total. The previous goal was to grow motorcycle volumes to 50% of the total.

The company said focusing on revenue instead of volume would account for sales of the IRONe electric-powered two-wheeler for children, eBicycles and apparel.

International volumes have been trending toward the company’s goal, going from 38.3% in 2016 to 40% in 2017 and 42.1% last year. Total international shipments are actually down 4,150 over that period. The company has not previously disclosed international revenue figures.

Harley continues to expect its plan to generate $1 billion to $1.5 billion in incremental revenue. The initiative is funded through $450 million to $550 million in operating investments and $225 million to $275 million in capital investments, figures that are also unchanged from previous versions of the plan.

The improvements will be funded through a cost reduction and reallocation program.

Strategies for cost reduction include improved cost competitiveness through sourcing and design-to-value. Harley will also seek to achieve overhead efficiencies through prioritization, automation, continuous improvement and closing gaps to best-in-class benchmarks.

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Arthur Thomas
Arthur covers manufacturing for 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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