Harley-Davidson (NYSE:HOG) surprised bikers when it dropped its Road Glide tourer from the 2014 lineup, saying the model needed a refresh after 15 years of riding strong. Although it was always slated to return within a year -- unlike the XR1200X Sportster, FXS Softail Blackline, and FLHTC Electra Glide Classic that were dropped for good -- the recent announcement that the Road Glide will be back in the 2015 lineup was a reminder of just how much this classic was missed.
In making big changes to the upcoming Road Glide model, Harley said it needed a shake-up: It wanted to optimize the number of choices available to customers, reduce duplication in its product lines, reflect marketplace dynamics, and minimize the complexity of models on showroom floors.
That was part of the reason why, in addition to permanently eliminating the three aforementioned bikes, Harley also took the FLHRC Road King Classic out of the North America market; globally it still outsold the FLHR Road King, which Harley-Davidson dropped from international markets.
Carved in stone
Those decisions meant that the retooling of the Road Glide would be completed under the new Project Rushmore styling that has made significant, fresh enhancements to Harley's designs, including more power, better brakes, improved ergonomics, and upgraded infotainment systems. Eight bikes for the 2014 lineup were given the makeover, including the Road King, Street Glide, and Tri Glide Ultra trike, a package intended to give Harley's luxury tourers a new lease on life.
Road Glide riders have always been in something of a competition with Street Glide riders, each reveling in their respective bikes' shark-nose or batwing fairing designs. But those design differences created the most problems for Harley when it came to the Road Glide, as it had already upgraded the Street Glide's fairing, which among other things, resulted in much less wind buffeting of the riders head. The designers even took into account the horrid phenomenon known as "beard lift" when it redesigned the fairings.
But that also meant the factory building them would need a retooling, too, since as Harley admitted, the manufacturing process for the Road Glide was at the end of its useful life. It decided to take full advantage of the manufacturing hiatus to upgrade the design and the process itself.
Absence makes the heart grow fonder
As much as Road Glide enthusiasts are anticipating the bike's return, Harley can't wait, either. The bike maker said U.S. retail sales in 2013 were adversely affected in the fourth quarter by the absence of the popular bike from the 2014 model year.
Even though it's a mid-priced bike for Harley, with the base model starting at under $21,000, the premium enhancements that come with the Road Glide Special -- an upgraded, touchscreen infotainment system with GPS navigation; painted inner fender, pin striping, ABS brakes, and a low-profile rear suspension -- push the price closer to $24,000.
Pricey, yes, but still affordable for long-distance riders, which is why its popularity has been key to Harley's growth. The Road Glide accounted for roughly 10% of retail sales when it last appeared in the second quarter of 2013, and its disappearance cost Harley market share, which fell 2.6% to 50.3% in the latest period.
On the warpath
Moving into the breach was rival Polaris Industries (NYSE:PII), which reintroduced the Indian brand last year after buying the nameplate in 2011. It offers the comparably priced cruiser Chief Classic and the bagger Chieftain, which is priced closer to Harley's Road Glide Special. Both bikes gave Indian a head start among riders who were looking for reasonably priced tourers but didn't want to wait for Harley to bring back the Road Glide.
Sales for Polaris' motorcycle division more than doubled last quarter to $103 million; though that spans all of the company's motorcycle brands, the Indian bikes were primarily responsible for the gains.
Harley may sell a ton more motorcycles than does Polaris, but the big Indian bikes promise to give the Road Glide a run for its money when it returns to Harley's showroom floors this month.
No doubt that's why Harley rushed out a statement ahead of its annual dealer meeting to be held later this month, trumpeting the touring bike's return. At both the Sturgis Motorcycle Rally in Sturgis, S.D., and at the National Bikers Roundup in Tulsa, Okla., the bike maker made sure that the Road Glide got special previewing before details on any of its other bikes were revealed. Drumming up interest for one of your most popular bikes helps deflate sales that may have gone to the competition.
The Road Glide's revival is eagerly awaited, by both riders and Harley-Davidson itself. Its appearance in the 2015 lineup could just see the bike maker rev up its engines once more and begin the long-distance journey to regaining the market share it allowed to slip away.
That's reason enough for investors to keep their eye on how Harley's results pan out in the quarters ahead.
Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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