Harley Davidson bets on small cars to revive

A new era has just opened for Harley Davidson. Faced with recurring problems, the famous motorcycle brand has chosen to diversify. It lifted the veil on Monday on its strategic plan "More roads to Harley-Davidson", intended to expand its customer base and to strengthen internationally. "We expect this plan to result in the expansion of the Harley Davidson community through a more diversified customer base and the development of margins and cash flow," said boss Matt Levatich in a statement. [19659002] This plan includes the launch of a "middleweight" range, the first models to be released in early 2020, and that of a smaller capacity for Asian markets, produced with a local partner. Harley Davidson's focus is on India, one of the most dynamic markets in the world.

Harley Davidson will also launch its first all-electric model. The "Livewire" will be released in 2019, before other gear without clutch are born from 2022. The ambition of the brand is to become, eventually, the leader of electric motorcycles.

The plan s 'also accompanies a complete redesign of the distribution network, whose cornerstone must be the website, thought as a sales channel. Partnerships with e-commerce players are under study. Concessions also need to be better integrated into business processes, both with existing and new customers. Finally, the brand will propose new concepts for smaller outlets in urban areas.

Self-financing

The plan will require investments of between $ 675 and $ 825 million by 2022 and will be fully funded by cost savings generated elsewhere and reallocated resources. The goal is to generate more than $ 1 billion in additional sales in 2022, compared to 2017.

Harley Davidson must conquer new markets to deal with the erosion of its sales in the USA. In the first six months of the year, its turnover fell by 8.7% in its domestic market, which still generates 58% of its revenues. The brand must, moreover, face the consequences of the commercial war led by Donald Trump. According to its financial director, John Olin, the costs generated by the various tariffs implemented in recent months could reach $ 100 million by next year. Faced with these threats, Harley Davidson plans to relocate some of its production in Europe. An idea severely criticized by Donald Trump, who attacked the strategy of the group.

Nicolas Rauline

New York Office