Milwaukee-based heavy motorcycle manufacturer, Harley-Davidson, is looking forward to a future of electric motorcycles to save its declining business. The 116-year-old American motorcycle company suffered 45% stock decline within the past five years. Yet, the company is fighting to survive over prohibitive tariffs imposed by the Trump administration.
Harley-Davidson’s market in the United States has been on a steady decline, and this is not unconnected with the aging customer base of the company. Most of the customers of the company are old and aging, and the younger generation is not showing promise to take the company’s giant bikes to the road.
Since 2006, the company has generated less than $1 billion in revenue. Analysts fear that the motorcycle giant faces a grim future than it currently endures at the moment. In a dramatic move to rescue the sinking corporation, CEO Matt Levatich, came up with the idea for electric motorcycles. The company intends that before the end of this year, its $30,000 LiveWire motorcycle will hit the US market.
The Harley-Davidson LiveWire is projected to be the coolest and baddest electric bike on the road, Business Insider wrote.
The problem however is that electric motorbikes are not fast-moving consumer goods (FMCG). They generate only 1% of the total sales in the industry; LiveWire could push up the revenue to 2%. And considering the fact that the bike would retail for $30,000, it is doubtful if LiveWire would be the lifesaver Harley-Davidson hoped for.
While the company could pick up from where it left off in the United States, it may need international markets to break even. And at that, the international markets are dominated by small petrol motorbikes often used for short-distance inter-city shuttles. It is very doubtful if Harley-Davidson can penetrate these markets with its hog motorcycles.
Morgan Stanley analyst Adam Jonas opined that the motorcycle manufacturer might even consider exploring the pickup-truck market if that is what is needed to survive the turbulent times. A similar thing happened 10 years back when former CEO Keith Wandell diversified from the company’s core business of big and expensive motorbikes such as Buell and MV Augusta to promote true hogs.
The strategy worked back then and the company boomed again. Maybe it might work with pickup-ups.
