Why America’s Favorite Motorcycle Company Is In a Serious Slide

Harley-Davidson, America’s favorite motorcycle company, is in trouble. Apparently, millennials are destroying the industry — they just aren’t interested in buying motorcycles. And Baby Boomers are getting too old to ride.

The iconic motorcycle brand is in a slump due to its declining fan base, but its chief executive, Matt Levatich has a plan. Keep reading to find out why Harley-Davidson’s stock is sliding and what’s in store for the company.

1. The state of the company

The iconic motorcycle company has fallen on hard times. | Harley-Davidson

According to Reuters, investors are concerned about Harley-Davidson’s stock falling. CEO Levatich has been at the company almost three years, and the stock has fallen more than 23% since mid-March 2017. In Harley Davidson recent news, shares are down 14%, and it’s “losing share in a declining market for motorcycles in the United States.”

Next: Boomers bowing out

2. Boomers are too old to ride

Harley fans aren’t getting any younger. | Scott Olson/Getty Images

Baby Boomers have been Harley-Davidson’s bread and butter for many years, but many are getting too old to ride. This isn’t surprising to Harley’s investors and executives, though — they’ve been worried about it for years, according to Reuters.

In January 2018, Harley projected motorcycle shipments to dealers might dive to their lowest level in eight years. Harley-Davidson sales in 2017 fell in every region.

Next: Some grim numbers

3. Wall Street speculates

wall street

Wall Street doesn’t have a good feeling about the company. | Kena Betancur/Getty Images

Because Harley-Davidson sales have been plummeting, Wall Street has speculated that the company might look for a buyout or go private so it could shield profit margins and not have to deal with shareholders.

But Levatich says the company won’t change ownership, according to Reuters. “The moment, however, we feel that the ownership structure of the company… is starting to dictate our strategy, that’s the moment to consider whether that ownership model is the right model,” said Levatich. “So, it is not the case. We are very clear in our strategy.”

Next: Harley’s new program

4. Harley’s ridership program adds new riders

The company is trying to bring people into the world of motorcycles. | Rich Gabrielson/Getty Images for Harley-Davidson.

In 2017, Harley-Davidson’s ridership program — Harley-Davidson certified coaches provide riding and safety lessons at showroom learn-to-ride academies — added 32,000 new riders in the United States. Levatich called it a “positive” trend, according to Reuters, and wants to continue the program.

 Next: New riders don’t always buy.

5. More riders don’t mean more sales

Young people are still riding bikes, they just aren’t buying Harley-Davidsons. | Neilson Barnard/Getty Images for Harley Davidson)

Unfortunately, more riders don’t necessarily translate into more sales, according to Reuters. A Harley Davidson general manager based in Illinois — Bill Koester — reported that only 35% to 40% of the people who participated in his dealership’s ridership program bought a new or pre-owned bike.

Next: Attracting millennials

6. Harley needs millennials to buy

Young riders would rather have street bikes and EVs. | TOSHIFUMI KITAMURA/AFP/Getty Images

To try and attract millennials to the Harley-Davidson brand, Levatich is depending on the growing market for electric bikes. Unfortunately, the technology is cost prohibitive and not very profitable for automakers, according to Reuters.

“There are some practical problems with EV that still most auto companies are also struggling with,” said Levatich. “It is very expensive.”

Next: Market share news

7. Harley’s market share is bleak

Harley’s popularity is falling among riders. | Dianne Manson/Getty Images

According to Reuters, Harley is still a major player in U.S. motorcycle market. That said, its market share has plunged to 50.8% from 58% in 2013, and Harley had to close one of its four U.S. factories and cut 800 jobs. Just in the last quarter, Harley’s market share went down 2.6%.

Next: Declining sales

8. Sales are half what they were in 2006

Harley just can’t seem to get people into its showrooms. | Tim Boyle/Getty Images

Harley is not alone — retail sales of new motorcycles in the U.S. have been cut in half since 2006, mainly because younger people simply aren’t interested in big motorcycles. The company also doesn’t offer many discounts in an effort to protect its profit margins, according to Reuters. And competitors, like Polaris Industries Inc., are offering bikes at prices lower than Harley’s. In fact, Polaris’s sales jumped 30% in the last quarter, while Harley’s fell 10%.

Levatich says the difference in the two companies’ performance is just “math.” “Growth percentages of a small base are easy to achieve. When you have a high base like ours, a little bit of decline shows up very quickly,” he said. “We are not going to discount to increase our market share.”

Next: What will the future hold?

9. Will Harley-Davidson be sold or acquired?

assembly line

No one knows what the future of the company will look like. | Scott Olson/Getty Images

Levatich told Reuters that Harley-Davidson is not interested in a merger or a private equity buyout. His plan is for the company to spend millions on marketing efforts — including the ridership program — and product development. But he doesn’t know what will happen.

“Mindset shifts are not something that happen overnight,” he said. “But that’s very much core to the 10-year strategy for the company.”

Read more: 10 Biggest Dangers to Motorcyclists on the Road

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