How Harley-Davidson Plans to Bring in New Riders With Its Low Riders

Harley-Davidson (NYSE: HOG  ) recently unveiled two new motorcycles, the Low Rider and SuperLow 1200T, completing the company's largest new model release in its 110-year history. With Project RUSHMORE and Street models also being released in the past six months, Harley has continued to crank out new products to keep the pressure on competitors like Polaris (NYSE: PII  ) and Honda (NYSE: HMC  ) .

Get low
The new Low Rider is a redone version of the classic 1977 bike and will pair upgraded performance with an old-school look. It comes with style elements of the original that include split five-spoke aluminum wheels, wrinkle black trim, and a polished headlamp visor. New performance features include a Twin Cam 103 engine, a two-into-one exhaust pipe, and dual-front disc brakes among others. The Low Rider also comes with accessories that can be customized to the rider's preference.

SuperLow 1200T. Source: Harley-Davidson

The SuperLow 1200T is a touring motorcycle that has a nimble chassis that weighs 118 pounds less than the company's lightest Big Twin touring motorcycle. The bike comes with touring features like Michelin Scorcher 11T touring tires, detachable saddlebags, a 1200cc Evolution V-Twin engine, and a new seat designed that provides comfort for long rides.

COO Matt Levatich said, "[The motorcycles] all are the result of being customer led and delivering riders the technical prowess and rebellious spirit that they want infused in each and every new Harley."

R&D is key
These new motorcycles are results of Harley's research and development expense that grew from $137.3 million in 2012 to $152.2 million in 2013. An increasing R&D expense shows that the company is investing in its future and is a good sign for long-term investors.

The company's R&D strategy is to develop new, relevant products that can be marketed to a diverse group of consumers. The company stated, "The key objectives of the strategy include implementing a new product development methodology and organization structure that support greater innovation, flexibility, capacity and focus on consumer insights."

This strategy plays perfectly into Harley's goal to grow sales in the U.S. to outreach customers at a faster rate than its core customers. Outreach customers include young adults, women, African Americans, and Hispanics. The lighter Street and SuperLow motorcycles could build on growth in the outreach group and help Harley keep its 54.9% market share of the U.S. heavyweight motorcycle market.

Innovation competition
One of Harley's main competitors, Polaris Industries, has also focused on growing its R&D. The company reinvests 4% of its yearly revenue into R&D ensuring that the expense increases proportionately with the company's overall growth.

PII Research and Development Expense (TTM) Chart
PII Research and Development Expense (TTM) data by YCharts

With the relaunch of Indian Motorcycles, Polaris is challenging Harley's heavyweight reign with another classic brand. The company values innovation and I'd expect the company to keep pressure on Harley at it continues to develop the Indian brand.

Honda's motorcycle R&D expense increased 4.9% to over $644 million in the first half of 2013. Honda produces smaller bikes in addition to heavyweight motorcycles, and recently launched medium-weight motorcycles in Thailand. Honda has a larger diversity of motorcycle models to sell, but Harley is still the dominant U.S. heavyweight brand.

Keeping momentum
The announcement of the Low Rider and SuperLow 1200T has brought additional focus to Harley-Davidson and the heavyweight motorcycle market as a whole. The bikes are a product of continued research and development and could help Harley raise sales in its outreach markets during a time of intense competition from Polaris and Honda. Expect Harley to keep its hand on the throttle as it attempts to diversify the heavyweight motorcycle market. 

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Read/Post Comments (20) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 23, 2014, at 2:46 PM, pwm02176 wrote:

    I miss my Harley 'Wide Glide'....and the bike above is UGLY UGLY UGLY.....Perhaps I will go buy a 'Big Dog' now.....

  • Report this Comment On March 23, 2014, at 3:37 PM, Cody700 wrote:

    Harley could bring me in if they offered something other than a V-Twin. Don't like a V-Twin no matter who makes it.

  • Report this Comment On March 23, 2014, at 4:31 PM, 57rigid wrote:

    i have to hand it to harley; never say die! i am put off that they are now into liquid cooled bikes but that's just me.

    love most of their new stuff but like my user name implies; real men ride rigid!

    i'm just old school

    harley forever, forever harley

  • Report this Comment On March 23, 2014, at 4:51 PM, rodgere wrote:

    please do research for your article and don't just regurgitate the sales propaganda spit out by Harley-Davidson, They are a design studio changing bling on the bike, lowering the seat height, or increasing the displacement. Yes, they refine their product but so does John Deere. Each time technology looks them in the face they turn tail and run. Please report facts after researching the topic.

  • Report this Comment On March 23, 2014, at 5:28 PM, jrichards wrote:

    The Low Rider of the 70's was a Big Twin 4spd frame withe a Sportster front end. The bike shown is just a worked over Sportster. I would like to see the 103 ci bike the article references.

  • Report this Comment On March 23, 2014, at 5:48 PM, goldfish246 wrote:

    The newsworthiness of a Harley's seat height is silly. It's always been between 23 and 26 inches. Years ago, when a short rider came into the dealership, we would just shave the seat cushion off an inch.

    Harley is smart to stay within certain parameters with their motorcycles. Anytime they venture out too far their customers slap them upside the head.

  • Report this Comment On March 23, 2014, at 6:22 PM, stockingshorts wrote:

    Soft tail Springer!

  • Report this Comment On March 23, 2014, at 8:45 PM, Edogak wrote:

    Stop being so silly. What is so important about new technology. I like V twin machines even though they are not new. I like American made. I like old school. I don't ride for others to say, "wow, that's cool." Don't wanna ride a sewing machine with wheels. Go get on a scooty puff and don't forget knee pads.

  • Report this Comment On March 23, 2014, at 9:07 PM, RedBaronRX13 wrote:

    These new model bikes, are no more than left over parts from other models put together.

  • Report this Comment On March 23, 2014, at 9:21 PM, boxman wrote:

    just what we need, more yuppies on the roads on weekends, pretending they're member of some gang in their leathers and overweight wife's on back seat..

  • Report this Comment On March 23, 2014, at 10:05 PM, hogrider51 wrote:

    The bike pictured is nothing but a sportster! They put in a 1200 cc motor quite a few years back. What I've been riding for the past 21 years is a FXB, a Sturgies model. Did away with the narrow glide front end. Had a wide glide front end installed. Handles much better. Nothing like a Shovelhead that doesn't leak. Don't have to wait 15 minutes for it to warm up.

  • Report this Comment On March 23, 2014, at 11:41 PM, mtatom wrote:

    Harley owners are a unique group--they're very loyal and proud of their machines--like no other. They're also very stubborn and wouldn't admit that other bikes might actually be better rides--the V-Star comes to mind. I have experience with several makes, including Harley, and the Can-Am Spyder by BRP is the best all around bike/trike I've ever been on. Yeah, it's Canadian, but I wanted something a step above.

  • Report this Comment On March 24, 2014, at 12:40 AM, Lowrider06 wrote:

    I'm disappointed with the look of this Lowrider. I bought a new 06 Lowrider and still have it. It's barely stock and looks 1000 times better than this one. It's chrome front to back. But if I had a chance for a new Harley or have two bikes, it would be the flat black old school look with detailed pinstriping. I have to agree, it looks like a Sportster with bags and it doesn't look right.

  • Report this Comment On March 24, 2014, at 12:47 AM, JDerek40 wrote:

    The pictured bike is the Sportster. Looks as if they finally looked at their own website at the Bikes that their customers are building. You can build the same Bike there out of the few accessories that are available and it'll even give you a breakdown on what the MSRP is.

  • Report this Comment On March 24, 2014, at 1:07 AM, Marco19477 wrote:

    In 1979 I bought my FXS Low Rider and still riding it. Just put 11,000 in it the past 2 winters. I know I am going to get comments on how stupid I am putting that much in a bike that's worth about 6500 top's on the market but it's not for sale!!! Able to do all the wrenching on it except the machine work. And hogrider my only leaks if it sits for a month and it will puke about a 1/2 a cup out. Need to seat the ball check in the oil pump. Have to get to that someday.

  • Report this Comment On March 24, 2014, at 3:05 AM, MareCadTITANIC wrote:

    I just wish H D would make an auto-trans, a much lower (closer to the ground) & a tad lighter. Then I'd get one. Colors: electrics lavender & orange.

  • Report this Comment On March 24, 2014, at 8:03 AM, InspectorDon wrote:

    Nice looking putt, but if H-D wants to sell more bikes, 'new' models ain't going to do it......Focus on (1) making the bikes less expensive and (2) more reliable! Most folks I know with H-D's paid through the nose for their scooters and the bikes seem to spent as much time in the shop as on the road.....

  • Report this Comment On March 24, 2014, at 8:09 AM, hardtimes wrote:

    no matter if you ride with a club ,or you are a lone rider there is one thing we all have in common, we all love the open road, to be able to travel at see things and meet so many people, unless you are rich, most all bikers have worked hard to buy or build the bikes of their dreams and the bike above will appeal to those who will buy it no matter what Harley has just provided a bike for someone to enjoy to all ride safe and enjoy the cumming summer.

  • Report this Comment On March 24, 2014, at 12:31 PM, williamchaney wrote:

    I have a Yamaha Roadstar 1700 and at one time I was thinking about getting HD Road King but it cost to much. The HD was 4000. more. The 1700 rides great, alway start, only goes to the shop for oil changes, and tires. I have 51,000 miles on it and I think it will go for ever. I have friends who have HD and they are alway working on them.

  • Report this Comment On March 24, 2014, at 1:50 PM, DuckFynasty wrote:

    Harley Davidson, made in America....from global bout those front forks from Japan?

    How about an article on the Harleys being made in India? The Street 750.

    Took my MSF Riders Course at a Harley Dealership....during the Store tour....the Sales Lead person didn't like me mentioning

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Ben is a recent graduate of Wake Forest University with a degree in finance. Follow Ben on Twitter at @BPopkin.

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