Riders will be able to buy a used Harley-Davidson (HOG 4.92%) motorcycle from dealers beginning in April under a program called H-D Certified as a means of introducing new riders to the Harley-Davidson brand and developing new revenue opportunities.
CEO Jochen Zeitz announced the new initiative during last month's earnings conference call as part of The Hardwire five-year strategic plan, telling analysts, "There are two distinct parts to this market: new bikes and used bikes, both of which present opportunities which we will pursue."
Amid declining industry sales, Harley-Davidson has been hit especially hard. U.S. sales fell 15% last quarter, hitting levels not seen in decades.
One problem that has plagued Harley has been used-motorcycle prices; because used bikes have been substantially cheaper, it has made selling new ones more difficult. Gone are the days when demand for Harleys was so high that there were shortages of new bikes, and used bikes could be sold for close to what they cost new.
Zeitz pointed out there are approximately 3 million used Harleys on the road, a million of which are seven years old or more. It wants to focus on those that are five years old or newer, with no more than 25,000 miles.
He says that's the sweet spot of the market, offering "the highest potential to also get them engaged in new motorcycles in the future."
While used-bike prices have been rising, Harley is looking to capitalize on the opportunity to bring new riders into dealerships by giving them an option on what they want to buy. It's also a chance to get a customer in the door, since the program will be completely run at the dealer level.
The used bikes will be professionally inspected, verified as mechanically sound, and backed by a 12-month limited warranty.