Harley’s Lost Its Edge

The big news today in the Midwest is the split of Harley Davidson and it’s agency of record for the past 31 years Carmichael Lynch. In today’s economy it’s a big deal when an agency walks from $10 – $12 M of media spending by a single client.

As a marketer I sense Harley-Davidson, Inc. (HOG)  brand is adrift. My sense comes from collective observations. Speaking only as a somewhat moderately interested party I have these observations:

Ready to Retire

Myth vs. Reality – the born to be wild HD rider is more likely to be the “ready to retire” rider. Specifically Harley’s hitting “generational” headwinds. The average age of a Harley buyer is about 47. At the same time the number of potential buyers in the US is dropping at a rate of one million per year as the last of the boomers get past the age of riding.

The influx of dentists, realtors and vice presidents in leathers was so intense that a Motel 6 was charging $139 a night – 35 miles from Sturgis.

Myth vs. Fact – the “Screw It, Let’s Ride” campaign Carmichael Lynch launched with Harley in light of the economic downturn is more likely to be replaced by “We’re screwed if we ride”.

The National Highway Traffic Safety Administration released a “Recent Trends in Fatal Motorcycle Crashes: An Update” dated June, 2006. This is the latest update on motorcycle statistics:
- Motorcycle rider fatalities have increased for the seventh year in a row. Since 1997, fatalities have increased an alarming 89 percent, from 2,116 in 1997 to 4,008 in 2004. This increase relates in part due to a sustained 14 year increase in the purchase of motorcycles. The previous four years show combined registered motorcycle purchases at 1 million plus per year. Bottom line: More motorcycles on the road create more chances of accident occurence.

These two realities provide very stiff, real competition for Harley-Davidson.

I wish them well but the cards are stacked against them.