Podcast | Digging Deeper - Does Harley Davidson need a new breed of riders?

Harley Davidson, an all American classic that is celebrating its 115th anniversary and its merits a deeper dive than usual on this Moneycontrol podcast because of its long history, the current trade complications it is facing and their possible impact on its future.

Even before we attempt to vroom down that chequered path, let us try to get to the core of the complex appeal that the simple act of riding a bike exudes in popular culture. It is after all this appeal that sells bikes and makes grown men weep with joy when they get a bald eagle synonymous with Harley Davidson, tattooed on their limbs. On Digging Deeper with Moneycontrol, we examine the all-American Harley Davidson and the all-new generation of riders it might need to lure in the coming years.

In popular culture, big bikes make men want to have them, and make the women want to be with the men who. In a way, stereotyping is obsolete today and even Indian cinema is waking up to that fact. Take the 2016 Marathi hit Sairat where the heroine Archie played by the spunky Rinku Rajguru rides a bike as she makes unflinching eye contact with the shy hero and calls the shots in their relationship. The bike here represents willfulness and feminine power, something that we don't always see associated with the imagery of big, masculine motorcycles.

In Hindi cinema particularly, bike riding is a subliminal nudge towards something that the character is trying to establish about a situation.

Pop culture moments that were driven by bikes

In Raj Kapoor's 1973 romance Bobby, a yellow Rajdoot denoted teen rebellion against authority but few know that this was also the first monkey bike designed and manufactured in India. In Yash Chopra's 1979 disaster drama Kala Patthar, Shashi Kapoor's introductory bike ride represented a never-ending journey towards something new and unexplored. In Ramesh Sippy's Sholay, the bike of course denoted eternal "dosti" and in Muqaddar Ka Sikander, the flow of life, laughter, grief, loss and triumph. TV jingles like "Yeh Bullet meri jaan, manzilon ka nishaan," communicated how the common, hard working Indian could rely on a home grown brand to take him places.

But nobody augmented the romance of riding a bike into an imaginary storm as much as Marlon Brando when he played an outlaw Johnny Strabler in the 1953 film, “The Wild One.” This was THE film that cemented the image of a leather clad, road burning rebel with or without a cause that in the future went on to inspire the likes of Tom Cruise in Top Gun and many Hindi film heroes too including Aamir Khan in Ghulam.

Brando rode a Triumph Thunderbird in “The Wild One” but surprise, surprise, his personal favourite was a 1969 Harley-Davidson FLH Electra-Glide.

Over the years though the lone rider in cinema has mellowed down and in the 2002 hit Erin Brockowich, a wild biker turned into a baby sitter while the hero battled a chromium stained energy corporation. Even the hairy bikers behind the iconic BBC food show have renamed themselves as the hairy dieters and in 2017, more than 50 bikers escorted a bullied 11-year-old to his first day at DeKalb Middle School in Waterloo, Indiana. They wanted to show the world that Phil had in his corner, a gang of impressively burly but genial bikers. A far cry obviously from the frightful imagery associated with clusters of angry, bristling bikers in many films.

So after playing the chosen side kick of the dark, brooding social outcast, the motorbike, even if it is as decisively masculine as the Harley Davidson, has rediscovered a new, more evolved consumer.

In India, the motorbike was first and foremost a medium of mobility.  First the British spread out railway tracks to facilitate mass transportation, then came pedal bicycles and then motor powered two wheelers. The first motorbike to arrive in India happened to be the 350 cc powered Bullet.  It was made in England by the Royal Enfield Company and assembled in Madras for the jawans of Indian Army in 1955.

The government eager to encourage local industries wanted collaborations between Indian and international companies rather than just importing foreign brands. The gender distinctions between motorcycles and mopeds and scooters were quite obvious. Till date, women in motorbike ads in India are used largely as eye candy but hardly ever in the driving seat in the manner of Sairat's Archie who remains an anomaly.

In the nineties, a deregulated business environment helped the two wheeler industry to explode and as we have already told you in earlier podcasts,  home grown brands like Hero Motorcorp, Bajaj, TVS, Mahindra & Mahindra and even the now fully Indian  Royal Enfield have impacted the lives and influenced the aspirational dreams of millions.  A possible electric mobility revolution may be on the cards as well.

The arrival of Harley-Davidson in India was a sign that that the Indian bike rider has finally come of age.

Harley Davidson commenced its India operations in August 2009 and appointed its first dealership in July 2010. Today the brand offers its Indian consumers a range of 11 models from each of its six platforms – Sportster, Dyna, Softail, V-Rod, Touring and Street – apart from  full range of parts, accessories, and general merchandise, available through authorized dealerships.

Interestingly, Harley Davidson also wants to expand its reach in smaller cities in India.

The birth of a legend

Harley-Davidson has indeed come a long way from the time it was founded in a small shed in 1903 by William S. Harley and brothers Arthur and Walter Davidson in Milwaukee, Wisconsin. Harley's early bikes were plated in nickel that gave them a dull glimmer.

Since the time Harley and Davidson produced and sold their first motorcycle in 1903, their signature 45-degree air-cooled V-Twin engines have become synonymous with American workmanship and ethos especially because the initial spurt in its business owed itself to the American military sourcing Harley motorcycles during the First World War and the second.

Post-war, Harley-Davidson introduced the Sportster in 1957, the oldest production model in the current H-D lineup, as well as other signature H-D models, according to www.motorcycle-usa.com.

Till date the Davidson family’s involvement in the day-to-day running of H-D continues, with direct descendent Willie G. Davidson serving as President of Styling, according to the website and we quote, "Since the turn of the century, Harley-Davidson has retained its image as a classic American icon. But the Motor Co is reaching out to other riders with the introduction of more performance-oriented models, like the V-Rod – significant as the first liquid-cooled production Harley. As the riding demographic ages, H-D is also realizing it must break into the younger market with the release of edgier makeovers of its classic models like the Cross Bones and other members of its Dark Custom line like the Iron 883."

Harley-Davidson, says the piece, has also been working hard to improve the riding quality of its touring bikes and we quote," In 2009, it did away with the stamped and welded single-piece frame that anchored Harley touring motorcycles for the last 30 years and replaced it with a cast, single-spar, rigid-backbone frame. It also went with a wider, longer swingarm. H-D also introduced a new three-wheel motorcycle called the Tri Glide that has the classic styling and popular touring features of its best-selling Ultra Classic Electra Glide."

On the anvil also are scores of new models that will be smaller, lighter and even electric.

As is clear, from the tweaks in design, Harley Davidson wants to woo a new generation of loyalists and to do that, it is willing to recreate itself inside and out.  It also intends to continue its domination of Flat Track racing, dirt tracks and road racing as well.

There are of course legions still of Harley Davidson loyalists who wear the insignia and various patches proudly to specify the degree of their passion, which group or chapter they belong to and so on. And driving across rough and ready terrains with other Harley fans is a rite of passage moment for many riders.

Beyond the Twitter storm

Even as the business continues to sputter on post recession, a dark and bitter cloud hangs above the company and it is all because of the rather moody and mercurial President of the United States.

It cannot be a welcome development by any stretch of imagination that the European Union has slapped a 31 percent retaliatory tariff on Harley in response to President Trump’s steel and aluminum tariffs.

Speculations are rife as to how the company will circumvent this trouble. Will it move more of its plants outside America? And if that happens, how will the Harley loyalist who equates his bike and his flag with his proud American identity, choose between the two? Harley knows its history well. It is not likely to throw away the nostalgia and pride associated with its brand in the US because it is worth its weight in gold but yes, it knows that it cannot only aim its products at the American consumer. There are vast tracts of untapped consumers in developing and developed countries who can be converted into Harley loyalists.

Trump of course as is his usual demeanour, made this personal and has been issuing churlish tweets to make his displeasure known and we quote, "A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end - they surrendered, they quit! The Aura will be gone and they will be taxed like never before! " Unquote.

"Harley is America's motorcycle," Allan Girdler wrote in a Washington Post column and added and we quote, "The Motor Company, as the old and inside folks call it, is a survivor. It will take more than the president’s tweets to change that."  Unquote. But Harley knows that the time to move beyond middle-aged white biker gangs has come and now is a good time as any to diversify its reach and appeal.

Time for change

In the years to come, Harley could be the first choice of an Indian girl gang driving from Bangalore to Leh or could play a starring role in a remake of the Wild One with an all black cast or also play a key role in the sequel of Crazy Rich Asians.

Whether Harley loyalists like it or not, the company knows its future will be safe amid more diversity and it has to look beyond American shores if it has to improve its retail sales and make more profits for its dealers.

Even though Trump has called motorcyclists, many of whom are part of his easily riled up base, to boycott the company, Harley is made of sterner stuff.

As Claire Suddath wrote in Bloomberg wrote and we quote, "Since 1903, when a Milwaukee engineer, William Harley, and his friend, Arthur Davidson, designed a motorized bicycle in Davidson’s backyard shed, the company has been continuously manufacturing motorcycles in Wisconsin. Throughout the years, Harley-Davidson has been acquired, sold, spun off, and taken public, but it’s the only American motorcycle company that’s never gone out of business. The one with the second-longest streak, Indian Motorcycle, shut down in 1953. Harley has largely thrived. It added a Pennsylvania plant in the 1970s; Missouri and Brazil came online in the 1990s; its newest addition, in Thailand, will open this fall. Last year, the company made $4.9 billion in revenue from motorcycles."

The article points out that Harley has been selling bikes overseas since 1912 and today has 800 international dealerships, more than in the U.S. Still, its image and reputation remain thoroughly American. We quote, "Harley-Davidson motorcycles are one of those rare products, like Coca-Cola or Mickey Mouse, that have become shorthand for 20th century America. They show up in pictures of civil rights marches, as part of President John Kennedy’s Dallas motorcade, and at the Apollo 11 astronauts’ ticker-tape parade. The company supplied military motor­cycles in both world wars. Marlon Brando, Elvis Presley, and the Terminator rode Harleys. Evel Knievel broke so many bones stunt-riding Harleys that for a while the company paid his medical bills."

The future is an open road

Trump's issues with Harley have no logical basis just as most of his tweets make little sense but his behaviour is surprising because traditionally, Republican leaders have wooed the biker base as it shares some of their conservative values. As the Bloomberg article points out, during the 2016 election, some of Trump’s most vocal supporters belonged to a 30,000-member group called Bikers for Trump. As the president said recently and we quote, “I guarantee you everybody that ever bought a Harley-Davidson voted for Trump.” Unquote. In fact two weeks after taking office, Trump had invited Harley executives and claimed that his allegiance was with proud American businesses like Harley-Davidson.

And his current frustration possibly stems from the awareness that even his volte-face and toxic tweets are not enough to halt this giant anytime soon in its dirt tracks especially because its mystique is too strong. And also because he himself is currently facing a crisis of credibility.

But Harley knows, there is more to the business than resting on the oars of nostalgia and it knows too that for the millennials, a big, bad, expensive bike is far less relevant than paying off student loans, mortgages, raising children and learning to be a responsible adult. Owning a bike no longer triggers romance the way it used to.

As the Bloomberg piece says and we quote, "While ridership has declined in the U.S., it’s growing in Europe and Asia. People in crowded Asian cities are turning to small, lightweight motor­cycles for daily transportation. According to the Pew Research Center, 80 percent of households in Indonesia, Thailand, and Vietnam own a motorcycle or scooter. Europe is similarly promising. The number of motorcyclists there is larger than in the U.S. That’s good news for Harley, because Europeans use bikes to commute and for long-distance touring. Today, Europe accounts for 16 percent of the company’s business, and that number is growing. Last year, Harley’s sales in Europe rose 8 percent." Unquote.

The company is going back to the basics after a severe bout of recession and researching consumers, something it has never done before and is finally taking into account all sorts of riders and even passengers who have never been considered as important by the Harley think tank.

It is beginning to think about ergonomic comfort of the seats and armrests and is listening to feedback rather than just designing in a vacuum.

Even though, according to Bloomberg, Harley has announced it would close its Kansas City plant and consolidate U.S. assembly in Pennsylvania, and roughly 800 of its employees will lose their jobs in Missouri, it is hopeful of growing stronger. Especially because it is reading the markets better.

Says the Bloomberg piece and we quote, "Asian and European riders prefer smaller, leaner bikes, not the refrigerator-size monsters U.S. boomers ride. So Harley started making some. In 2014 it released a line of low-priced street bikes, its first completely new series in 13 years." Unquote.

The journey from exclusivity to inclusivity is key to its survival as also a close hard look at the opportunities it has missed over the years.  For instance, it forgot to invite young riders into its fold with adventure bikes that BMW and Yamaha have been milking for profits, according to the Bloomberg piece.

The company also learnt that it needed to break out of its smug image and appear more accessible in advertising and to new bikers and we quote the Bloomberg piece again,

"In 2014, Harley turned 111 years old and finally decided to do some publicity. It allowed select trade publications to test-ride an electric motorcycle prototype, which the company named LiveWire. A LiveWire appeared in the 2015 movieAvengers: Age of Ultron.".

The LiveWire, we are told by Bloomberg, will go on sale followed by several electric models of varying weights and sizes. Two adventure touring bikes will debut in 2020. There are new street bikes and lightweight bikes; even its older models are getting upgrades. Harley, says the piece, still won’t reveal its entire lineup and is mum about technological upgrades to existing motorcycles. But it’s trying to be more forthcoming.

Its 115-year  festival too, unfolding in Milwaukee, gave a hint of the company's friendlier approach and this  Wednesday, when  the party got underway with a military skydiving show and fireworks, Karen Davidson, the great-granddaughter of William A. Davidson said this, "I think we’re all here to celebrate, whether you’re from Milwaukee, Perth, Paris, L.A. or Green Bay." Unquote.

Dave Cotteleer, Vice President and Managing Director for the U.S. market, also gently circumvented Trump's attack thus and we quote, "Harley-Davidson is about inclusion. Harley-Davidson is about togetherness. Harley-Davidson is about community. Harley-Davidson is about freedom. We, as a company, strive to be absolutely apolitical, because what’s important to us is that spirit of togetherness and riding. That’s what this celebration is about, and that’s what we’re focused on this weekend.” Unquote.

Later, Marc McAllister, Vice President and Managing Director of international sales, stated that the company has been working with the administration in the US as well as the administrations in other countries to try and strive for a fair playing field as far as tariffs go.

The message is clear. Trump may have time to stir up politics over trade. The iconic bald eagle doesn't.  It will go wherever there is a rider dreaming of a Harley.