Will the Harley-Davidson Street 750 Change Harley's Bulky Reputation

If there's one thing bikers know about Harley-Davidson, Inc. (NYSE: HOG  ) motorcycles, it's that they're big bikes. That's the reason they're called "hogs".

But higher sales and an apparent recovery from the collapse of the financial crisis, has Harley toying with the need to satisfy urban riders of motorcycles. The big-cc Softtails and Dynas might be fine for touring, but city maneuverability, even for a motorcycle, is apparently lacking.

Harley-Davidson Street 750. Source: Harley-Davidson

Enter two new lightweight bikes, the Harley Davidson Street 500 and the Harley Davidson Street 750, two runabout models Harley says is perfect for younger, urban riders. They'll also mark the first true lightweights Harley has made since the 1970s when it stopped selling the Sprint, a small 350cc bike, though it built the 250cc Aermacchi motorcycles until 1978 when they sold the line.

Because Harley has dominated the heavyweight bike category for so long, accounting for 57% of all the new heavyweight bike registrations last year, maybe the "hog farmer" thought the market was too mature to offer enough growth opportunities. While its entrance into the lightweight market will give it a chance to compete against Honda Motors (NYSE: HMC  ) , the leading lightweight bike maker, but one which sells across the full spectrum of sizes, on the surface there seem to be some problems with this thought process.
 
By Harley's own admission, heavyweight bikes are the most popular category of bikes, representing 62% of the total U.S. motorcycle market, and new registrations have been climbing at a fairly steady 4% rate for the past few years. Moreover, considering it's been a few decades since Harley last tried to tap this market, it's going to be going up against established players like Honda, Yamaha, Kawasaki, and Suzuki with no guarantee of success, despite its storied nameplate. Again, when you think of a Harley, a big 1,440cc engine is what comes to mind.
 
Even so, Harley has a history of proving the critics wrong. Back in 2001 when it introduced the V-Rod, it was roundly criticized as not being a sports bike maker, and while sales started slowly, it eventually became a big seller. And the liquid-cooled-engine technology the V-Rod pioneered for Harley will be advanced in the two new Street models.
 
Further, the motorcycle market is bigger than just the U.S., despite it being the most important market for heavyweight bikes -- in Europe, the share is much smaller. Touring bikes, for example, account for just 39% of the European heavyweight bike market, and whereas the number of new heavyweight registrations is on the rise in America, it's been steadily falling overseas, down 8% in 2012 and 3% in 2011.
 
That's why in addition to introducing the new Streets in the U.S., it will also be offering them for sale in India, Italy, and Brazil.
 
Still I don't think this is a clear-cut win for Harley. Polaris Industries (NYSE: PII  ) continues to see strong demand for its Victory and Indian heavyweight bikes, noting that the Victory's led its on-road vehicle division to post a 9% increase in international sales, including a 21% gain in the Asia Pacific and Latin America regions.
 
It's good to branch out, and Harley's V-Rod shows it can stick it to the critics, but that was a big bike. Here we're talking about going in the opposite direction, and that always raises the risk that the big-bike maker will leave a big burnout mark.
 

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  • Report this Comment On November 09, 2013, at 1:42 PM, RGold wrote:

    Harley has tried the light bike thing before. They bought Buell a while back. It didn't work out at all. They had such high hopes....but then the program flopped.

    Also, there appear to be some cash flow issues at Harley. Might want to check out the new Idea Mechanic report (ideamechanic blogspot).

  • Report this Comment On November 09, 2013, at 3:07 PM, TMFCop wrote:

    RGold,

    That's true, but Buell bikes were "Harley" bikes, much like back in the '70's as I alluded to when it marketed small bikes through Aermacchi. They weren't really "Harleys."

    I do think there's potential, at least overseas, but I much more circumspect about its chances here at home. I'm questioning a lot of H-D's moves lately and it's decision to consciously become a "lifestyle" brand selling perfume, cologne, and who knows what else does more damage than help.

    You're buying a Harley because you're buying into the mystique, which is largely built on the "outlaw biker" idea, and, well, perfume doesn't quite fit.

    I also agree it's got some financial issues to deal with too and not amount of trying to be all things to all people will help.

    Thanks for reading.

    Rich

  • Report this Comment On November 09, 2013, at 3:07 PM, TMFCop wrote:

    That should be Buells "weren't Harleys," just to clarify.

    Rich

  • Report this Comment On November 09, 2013, at 5:33 PM, FREEHIKER wrote:

    How will these be different from the 883s they build now? Or at least they built them a few years ago. Handling, means something entirely different to the average Hog rider than it does to the rider of a crotch rocket. Which version are they going for?

  • Report this Comment On November 09, 2013, at 10:31 PM, redbuns wrote:

    I do know that back in the days when we were involved they built a 750 flat track bike that ruled the sport. I'd love to have one now that I could put out on the street.

  • Report this Comment On November 09, 2013, at 11:18 PM, cwm wrote:

    From my perspective there's a couple of things deserving comment.

    Firstly, a few seconds on either Harley's website or Wikipedia, or almost any other HD bike lover site, you'll learn they are called HOGS because of a motorcycle race mascot decades ago and it stuck, not because they are big bikes.

    Second, full baggers and HD recalls 1200cc's, not 1440cc. 1440cc? Where do you come up with this stuff.

    Finally, there's cost. You can buy any crotch rocket brand starting well under $10k. There are lower end HD's, but you're basically looking at $16k and up for a decent Harley. They have forecast low teens for the price of the small bike which will open a whole new market based on affordability.

    I just got the new 2014 Limited with water cooled heads, larger forks, linked brakes and more. It is as maneuverable as any tiny crotch rocket, it is positively surprising and FUN to drive even in the4 city. Admittedly this wasn't so before, they were big, awkward, and clumsy, easy to spill.

  • Report this Comment On November 10, 2013, at 12:45 AM, Rick650 wrote:

    JMHO... I've been riding street bikes since 1992. My bikes have always been used Japanese bikes bought for a few thousand bucks. I like the look of the Sportster, but have always been reluctant to buy one. Part of it is cost (even a used one in decent shape will set you back at least 7 or 8 grand), and part of it is being wary of a design that is essentially an update of a 50s engine.

    I like the look of these new 'Street' bikes. The price is more to my liking, and I'd be a bit more comfortable with an engine that is liquid-cooled and fuel-injected.

    I think I'll see how they sell in the first year. If they have a decent reputation for reliability I can see buying one in 2015.

  • Report this Comment On November 10, 2013, at 6:25 AM, dbyrdman wrote:

    Someone said "They have forecast low teens for the price of the small bike which will open a whole new market based on affordability."

    So is Harley going to put out a smaller bike than the 883 and charge more? If they want to compete with the Asian makers then they should price them accordingly. A 883 Iron is listed for $8200 A Honda Shadow 750 is listed for $8200 If they are going to price a 750 or 500cc bike high, then you're still paying for the Harley name

  • Report this Comment On November 10, 2013, at 11:14 AM, axle57 wrote:

    It would always be nice to see new models of the HD's hitting the market; the newer generations need to have a nice, smaller v-twin with some well needed amenities pertinent to the Harley name. As for the hogs, Ive never had any trouble at all handling a big scooter in urban settings including emergency situations. If you ride like a defensive driver, you'll fare well, drive like a fool and you'll soon lay it down. Remember; the bike is always in control, respect it. Hope they come up with some cool stuff.

  • Report this Comment On November 10, 2013, at 2:55 PM, Axel wrote:

    I drive a Peterbilt with a radiator not much bigger than on these India-made "Harleys". They aren't going to appeal to anyone who wants either the style or the function of a real Harley.

  • Report this Comment On November 10, 2013, at 7:51 PM, jdmeth123 wrote:

    As I remember in the early 70s Cycle World magazine custom built a street bike using a Sportster motor. They called it The US 1. It was much narrower and more maneuverable then the wide 4 cylinder inline Japanese bikes. A modern factory built copy of that should sell.

  • Report this Comment On November 11, 2013, at 6:38 AM, breeze wrote:

    anything harley does will have a following as long as they dont have save the world expectations the preformance mods could be exciting it already sounds like its a stroked 900

  • Report this Comment On November 11, 2013, at 12:46 PM, texasharleyguy wrote:

    These bikes won't make it the U.S., pretty much like the Italian bikes that were Harley branded bikes in the 70's. There's nothing about these bikes that even looks like a Harley, from the ugly radiator to the turn signals. Harley is just making money from the gullible that are willing to pay for the Harley name, from cheap clothing to bikes that are Harleys in name only. These buys will do fine in Europe and Asia, were the brand isn't the same, but give me an air cooled V-twin with push rods forever...

  • Report this Comment On November 12, 2013, at 1:54 PM, JF wrote:

    I can see a market for these bikes. Many dealerships have already been flooded with questions about them. The price tag is appealing and the Harley name will help these bikes sell. I can see many beginning and returning bikers buying these machines. The old school Harley guys will just have to suck it up.

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