Harley-Davidson's new strategy: Smaller bikes, more foreign sales

Harley Davidson Pan America Announce

Harley-Davidson Pan America 1250

On top of smaller bikes for foreign markets, and an electric model next year, Harley is launching its first adventure touring motorcycle, the Pan America.

Iconic American motorcycle manufacturer Harley-Davidson unveiled on Monday a global growth plan to revamp its US business with new products and cost-cutting measures, while also expanding internationally.

Earlier this year, it was believed that Harley-Davidson's first electric motorcycle, the LiveWire, would hit dealerships before the year's end. For this market, Harley intends to develop a much smaller bike, in the range of 250 to 500 cubic centimeters.

Harley will be developing a new flexible architecture to spawn motorcycles from 500-1250 cc segments while the 250-500 cc bikes in the pipeline will appeal for the masses in India.

"If nothing else, Harley-Davidson is acknowledging the ongoing shift in global consumer tastes and sluggish USA participation rates, and is willing to make course corrections - and investments - to pursue areas of growth", Raymond James analyst Joseph Altobello said.

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Harley's planned entry into the market for small and mid-capacity motorcycles is aimed at expanding its customer base and to drive growth in India.

And similar to Bajaj-KTM, Bajaj-Triumph and BMW-TVS partnerships, Harley-Davidson also plans to forge a strategic alliance with another motorcycle maker to develop and sell these motorcycles. "The company expects to fund strategic opportunities while maintaining its current investment and return profile and capital allocation strategy".

"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", Harley-Davidson CEO Matt Levatich said in a statement. But they're typically bought by older riders.

It's dealing declining sales and an aging riding population amid criticism from President Donald Trump for the company's decision to move production of motorcycles sold in Europe overseas to avoid retaliatory tariffs the European Union is imposing on American exports. The company said the tariffs would add about $2,200 to the cost of the average motorcycle built in the USA and exported to the EU. Livewire will be supplemented by small and lighter electric motorcycles in the years leading up to 2022.

Speaking with CNBC, Levatich said that riding the LiveWire "is a different feeling". Let us know what you think about the Pan America in the comments section below!

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