Harley-Davidson Rolling Out Smaller Bikes in Push Internationally

CEO of Harley-Davidson Matt Levatich outlined an aggressive growth plan for the motorcycle maker that includes a new bigger lineup of lighter motorcycles, small retail stores in urban areas, a new online strategy and a bigger push into the international market as sales fall in the U.S.

The company, based in Wisconsin, said it was launching a new platform by 2020 of 500 cc to 1250 cc bikes and a smaller bike for Asia’s emerging markets. The largest engines at Harley run at approximately 1700 cubic centimeters and have a weight of over 1,000 pounds, which makes its new lineup a substantial departure from the signature HOGs.

Harley-Davidson stock has fallen close to 13% in 2018, and profits fell as the motorcycle maker, founded 115 years ago, struggles to find its foothold with today’s millennial buyers, who do not like the high price tags for the company’s heavy bikes. The 0.7% increase in its international sales for its second quarter was not sufficient enough to offset a decline of 6.4% in U.S. sales.

The bike maker is expanding its international push particularly in China and India, and will launch its first electric bike called the LiveWire, in 2019 with more models over the next three years or through 2022.

Harley-Davidson is also investing more in international production facilities as a way to avoid paying tariffs. In India, tariffs increase the cost of bikes 100%.

President Donald Trump has been critical of the company’s investments overseas. He said in a tweet on July 3 that the White House was working with other companies that make motorcycles after Harley made the announcement in June it was planning to move its production for the European market overseas because of the European Union’s retaliatory tariffs.

The Harley CEO called the statements made by Trump unfortunate attention to tough decisions that the company had to make the past couple of years. He added that Harley works hard to remain out of politics as it is not a political organization and try to remain apolitical in the way the company approaches business, with its customers and around the world.

While Harley motorcycles were taxed 6% at one time in Europe, the latest tariffs raised that tax to 31%. The bike maker was already facing pressure due to the tariff the White House levied on aluminum and steel imports of 25%.

India has a 100% tariff it levies on Harley’s that are made in the U.S.

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