After five years of falling sales and a stock price that's been nearly cut in half, Harley-Davidson (HOG 0.56%) CEO Matt Levatich is calling it quits.

The motorcycle giant announced last Friday he had stepped down as president and CEO, and had also resigned his seat on the board of directors. The statement doesn't say whether the move was initiated by Levatich or the board, though it does say he will assist in finding a permanent replacement through the end of March.

While I've said Harley-Davidson needed someone new at the top for some time, the parting of ways is only a half measure. The big bike maker still needs a new board, as there is not a single director currently serving who has any relevant industry experience.

That could be a key issue when it comes to selecting the new CEO.

Motorcyclist riding into sunset

Image source: Getty Images.

Swimming against the tide

Levatich can't be wholly blamed for Harley-Davidson's woes. The company is suffering through five consecutive years of falling sales amid a broader industry decline. It sold 218,000 motorcycles globally in 2019, or just above the number it sold in 2010, while U.S. bike sales are at a 16-year low. 

The core Harley customer group of middle-aged males is aging out of the market, and it's been difficult to appeal to younger people who don't have the same affinity for motorcycle riding. The premium price tag Harley-Davidson motorcycles carry also keeps it at a competitive disadvantage. 

Yet the prescriptions Levatich tried implementing to cure the company's woes haven't been effective.

A series of misfortunes

While Levatich did try to introduce some lower-priced bikes like the Street model, which retails for just under $7,600, and the upcoming middleweight Pan America adventure bike and Bronx streetfighter are expected to be cheaper, it may be a case of too little, too late. Moreover, a really affordable, small sub-500 cubic centimeter motorcycle is only planned for the China market.

Harley also hasn't had a racing bike since it closed down Buell and sold MV Agusta during the depths of the Great Recession. Instead, Levatich chose to bet the farm on electric motorcycles, notably beginning with its exorbitantly priced LiveWire, and in keeping with his "More Roads" roadmap that envisions foreign countries having equal weight with the U.S., he brought in the founder of an organic baby food company to serve as the company's first global brand president.

The bike maker has enjoyed some recent success in international markets, and a brand spokesperson might help fuel further growth, but the hire failed spectacularly after he was fired within six months for a number of unspecified personal conduct violations. Levatich ended up filling in the position on an interim basis.

No big shoes to fill

Now Levatich is out too, and board member Jochen Zeitz, the former CEO of sneaker maker Puma, has assumed the role of acting president and CEO until a replacement can be found, someone who can transform the motorcycle company.

The challenges he will face are not easily conquered. Does the bike maker continue on the path Levatich started, investing even more heavily in electric motorcycles and international growth, or be resigned to Harley being a niche motorcycle company? Or should it be bold and begin exploring small, cheap bikes for the U.S. market, as well as making a sports bike to challenge foreign rivals?

The board also needs to decide: Does it pick someone from within motorcycling, or does it tap an outsider?

Harley-Davidson has all the hallmarks of a legacy brand that's outlived its time, but maybe there's still someone with the vision to revitalize this iconic motorcycle king.