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Harley eyes global buyers in return to lightweight bike market

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Bloomberg News
Harley-Davidson, which has long dominated the market for heavyweight motorcycles, is rolling out its first Harley-brand lightweight bikes in decades as it eyes a global market that is big and, in some ways, smaller.
At events in Kansas City, Missouri, and Milan Monday, Harley is introducing the Street 500 and Street 750, the latest in its Dark Custom line of bikes that aim to bring Harley's classic look and sound for a modern and younger audience.
The Street was developed with one eye on a global market, where many customers are put off by Harley's classic road hogs. Harley interviewed more than 3,000 customers in 10 countries and conducted about 1,000 focus groups in cities such as Chicago, Mumbai, Sao Paulo and Tokyo, making it the company's most researched and market-tested product.
"We're doing a lot better job as a company getting the voice of the customer into the front end of the process so the bikes we design and develop really meet the needs and requirements of the consumer," Chief Executive Officer Keith Wandell, 63, said in an interview.
Harley expects to begin selling the Street in 2014's first half in the U.S., India as well as Italy, Portugal and Spain, Matt Levatich, president and chief operating officer of the Harley-Davidson Motor unit, said in an interview. The 500 will sell for about $6,700 and the 750 for about $7,500, making them Harley's least expensive bikes.
"This gives us an opportunity to go after good-volume markets and learn how the product is received in different types of motorcycling markets," he said. "We have high expectations."
For most of its 110-year history, Harley sold motorcycles as fast as it could to customers it knew well: wealthy, middle- aged American white men. The global recession forced a reckoning. Revenue in 2009 fell almost a quarter from a year earlier. Wandell, installed four years ago from auto-parts maker Johnson Controls Inc., cut costs, sped development and pushed the company to expand its customer base, in the U.S. and internationally.
That meant seeking input beyond Harley's Milwaukee headquarters from consumers in countries as disparate as India, Italy, Brazil and the U.S. The feedback indicated when consumers think Harley, they're reminded of metal fenders and fuel tanks, rich, glossy paint and the deep, throaty rumble of a Harley engine, Levatich said.
The company opened the doors of its product-development center in nearby Wauwatosa, Wisconsin, last year to dealers and sales managers. About 800 engineers and designers there are developing the next generations of Harley motorcycles. Only a third of Harley's 5,800 employees have access to the building. It wasn't until last year that a group of its dealers were allowed in for a briefing on new product planning.
The shares have gained 33 percent this year, outpacing the 24 percent increase for the Standard & Poor's 500 Index.



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