Harley-Davidson Inc. Plans to Drive Sales Based On Exclusivity

Matty-Sways

Matt Levatich, Harley-Davidson Inc. new CEO, is going to limit production and push off new model releases for a year.

Harley-Davidson Inc. is reopening its factories after shutting them down temporarily in order to slow the spread of COVID-19. The factories are opening with lower production rates and plans to send dealers a more limited range of motorcycles, according to a report by The Wall Street Journal.

With plans to reopen in place, Director of Product Sales Beth Truett sent out a memo saying that 70% of dealers would likely not receive any new motorcycles this year.

“We are using this time to course correct and rewire the company in pursuit of making Harley-Davidson one of the most desirable brands in the world,” said Truett in the memo.

Harley’s former Chief Executive, Matt Levatich, had originally planned to combat declining sales by bringing in new models by 2027. Levatich stepped down in February after pressure from shareholders to do so in light of Harley’s fifth consecutive year of falling sales in the U.S.

The new and current Chief Executive, Jochen Zeitz, argued against expanding Harley’s lineup, saying that it took attention away from their already profitable models and made work on factories too difficult. Instead, he plans to reveal their new models early next year as opposed to this summer. The new date for model reveal comes right before their peak in spring buying season.

By withholding the reveal of new models, Zeitz hopes to appeal to consumers of their current premium-priced brands with limited availability.

“Our strategy to limit motorcycle product in the showroom is purposefully designed to drive exclusivity,” said Truett in the memo.

However, the plan to cut production is not favorable among all dealerships. Some say that they only have enough new motorcycles to span a month or two of sales, and that is only if demand doesn’t rise.

The company, though, continues to urge dealers to sell their used motorcycles.

“If Harley is taking all the new bikes away from me, I’ll have to make that up with used,” said George Gatto, who owns two dealerships in the Pittsburgh area.

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