Has Beleaguered Harley-Davidson Finally Turned a Corner?

The last time we checked in with Harley-Davidson’s bottom line, it was almost a year and a half ago, and things were not looking good for the legendary American motorcycle company. Previous CEO Matthew Levatich exited unexpectedly after five years of declining domestic sales and market value, and board member Jochen Zeitz took the helm while a new leader was found. Who would grab the handlebars, and which way they would steer the bike maker, remained to be seen.

Then, something unexpected happened again, but this time in Harley’s favor. As it turned out, Zeitz was the man for the job, so he was officially appointed chairman, president and CEO. And the LiveWire, the brand’s well-reviewed and celebrity-endorsed electric motorcycle, the halo product that drew comparisons to Tesla and was supposed to change the company’s fortunes, wasn’t the tool that Zeitz wielded.

According to Reuters, the 118-year-old company saw “better-than-expected earnings in the quarter through June,” which the outlet said “offered evidence that Zeitz’s turnaround plan was gaining traction.” That plan has been dubbed the “Hardwire Strategy.” While it’s a multifaceted approach, what appears to be the largest factor so far, and which sits at the top of the list on the company’s website, is the “Profit Focus,” which is Harley’s decision to put a renewed emphasis on their “strongest, most profitable segments,” including the Touring, large Cruiser and Trike models.

In essence, while electrification and new technology is part of the overall plan and the company is saying they’re looking to the future, what’s helping Harley climb out of a hole here is going back in time.

The company “has shifted focus back to big bikes, traditional markets like the United States and Europe, and to older and wealthier customers in a bid to grow profits,” Reuters explained. And it should be pointed out that while many companies are posting so-called record profits, it doesn’t mean much when it’s being compared to numbers from the first year of the pandemic. But for Harley, retail sales in North America were actually up this quarter over the second quarter of 2019.

That’s not to say Harley-Davidson is giving up on the LiveWire, though it does appear that the EV living alongside the old-school gas guzzlers wasn’t working for the company’s loyal riders. As part of the new strategy, the company changed the LiveWire line to a standalone brand earlier this month alongside a new, cheaper model called LiveWire ONE (they even have a new, hip website for it).

Unfortunately for them, they’re not out of the woods yet. Alongside the sales win was a note that raw material price increases and supply-chain backups will hurt the company throughout the rest of the year. That announcement, and the subsequent stock decline, was the main subject of the Reuters story.

But outside the bubble of the stock market, pun intended, it looks like the century-old bike maker may just turn it around after all.