OFF THE WIRE
BY: Abe Sauer
brandchannel.com
When Harley-Davidson went from a way of life brand to a lifestyle one in the 1990s, it put itself in the perfect position to suffer severely from the 2008 economic meltdown in which its best customers saw layoffs and massive drops in their retirement accounts and home values — while at the same time those offering to loan money for purchase of, say, an $18,000 motorcycle, all but disappeared.
From a 2008 profit of $654 million, Harley saw a $55 million loss a year later, and duly dropped to #98 (from #73 a year earlier) on Interbrand's 2010 Best Global Brands ranking.
Now, a just over a year after threatening to leave its longtime headquarters in Wisconsin, the Milwaukee Business Journal reports that Harley has "begun delivering all 14 models in next year's Touring and Sportster lines to dealers in the United States and Europe, which will allow dealers to sell 2012 models throughout the peak summer selling season." But it's not open road for the iconic brand just yet.
As CBS Moneywatch notes, some of Harley's success is — to put it bluntly — dumb good luck from the misfortunes of its rivals, as "severe supply chain disruptions" caused by Japan's tsunami and earthquake hampered the brand's two main competitors, Honda and Yamaha.
From a peak of $61 in 2007, Harley shares dipped below $10. Today, shares hit a 52-week high at nearly $44.
Much of Harley's US growth has come from a new generation of rider who has embraced a back to basics Harley brand. Anyone who has been on the roads this summer has seen a huge increase in the number of Harley's Sportster models cruising around.
The Sportster starts at about $8,000 and, along with sub-$10,000 models like the Iron and Nightster, is one of the bikes for which Harley has begun offering a lot more customizable options. As motorcycle trends begin to swing more toward stripped-down styles, Harley has positioned itself well.
Maintaining the popularity and iconography of the brand at home is a huge benefit for Harley's expansion overseas. In this respect, Harley has just re-upped with Graj + Gustavsen Inc., the firm managing its strategic branding initiatives in apparel licensing. The brand also opened the dustier parts of its archives for "Collection X: Weird, Wild Wonders of the Harley-Davidson Museum," a new exhibit.
Also at the Harley Museum, the bike from the upcoming live version of the Marvel comic Captain America. Recently, the brand has been actively courting Hollywood, securing prominent product placements in three recent marquee films: Wolverine, Indiana Jones 4 and Green Hornet.
Harley supplied five motorcycles to Captain America, a smart placement that has the benefit of being historically accurate. In 1941, Harley nearly suspended production of civilian bikes to instead produce motorcycles for the war effort. The brand has set up a microsite to promote its tie-in with Captain America: The First Avenger.
Harley's roles in films that are as popular overseas as at home is good news for the bike brand's emerging markets. Recently, the manufacturer made the news in India with a human interest story of the nation's first female Harley owner.
Meanwhile, the organizer of the recent China International Motorcycle Exhibition predicted that "Harley-Davidson will experience a dramatic sales growth" in China. The brand's Harley Owner Groups has been active in China, hosting riding activities and rallies nationwide.
