Up For Grabs: Half of the American Motorcycle Industry

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It is a fact that isn’t often discussed in the motorcycle industry, but roughly 50% of all on-road motorcycles sold in the United States come from a little company called Harley-Davidson. In 2012 for instance, the Bar & Shield brand sold 161,678 units here in the US, while for the same year the MIC reports 318,105 on-road units were sold nationwide, across all manufacturers.

In a way, the statistic is unfair. A cynical observer would say that Harley-Davidison is in the t-shirts, beanies, and trinkets business…and also happens to sell motorcycles as well. The more accurate critique is that Harley-Davidson sells a carefully curated lifestyle to its owners. A turnkey admittance to Club Cool and a subculture that breaks out of the doldrums of the suburban lifestyle.

You can hate the twenty-something flavors of the same machine that Harley-Davidson panders to dentists and accountants, and you can call the company’s products a number of nasty names, but the simple truth is that they sell, and even when sales aren’t that good, they still sell well. In 2011, the low-point in Harley-Davidson’s five-year sales tailspin, the Milwaukee company still accounted for 48% of on-road motorcycles sold in the US. Chewy.

It is easy to be critical of Harley-Davidson, and there are plenty of things to be critical about (I have had no problem in the past ), but one cannot deny the fact that if Harley-Davidson is responsible for the lion’s share of what we call in passing the motorcycle industry. For Polaris Industries CEO Scott Wine though, Harley-Davidson’s motorcycle dynasty is seen as a market opportunity, though a risky one.

I got this call a couple years back to do an industry consultation. It was a blind engagement, meaning I had no idea who I was ultimately consulting for (and still don’t to this day), but they asked a lot of questions about America’s sweetheart motorcycle brand, and what it would take to beat Harley at its own game.

Asked why a company like Victory or the plethora of metric cruiser makers have been unable to even scratch the surface of Harley-Davidson in terms of sales, my reply was simple, “they’re trying to beat Harley-Davidson at its own game, no one does Harley-Davidson better than Harley-Davidson.”

You see, like any high-end lifestyle company, Harley-Davidson’s true driving force comes from its brand, and not its products. The the latter helps, it is the chords a company’s brand plays on the heartstrings of its consumers that keeps them engaged beyond the initial sale.

It is not enough to make a better motorcycle, that part is easy and had been demonstrated on numerous occasions by Harley’s competition. Instead, one has to build a better customer experience throughout the entire ownership lifetime — one has to create product lust. This intangible yet palpable ingredient it the most difficult to visualize and achieve (and perhaps that is why so many brands fail in this regard), but like good pornography, you know it when you see it.

This gets my mind churning on Indian though. Touting a history that predates Harley-Davidson, Indian is one of the few brands that could lay siege to Harley-Davidson’s motorcycling zeitgeist. Acquired by Polaris in 2011, many of my colleagues lamented the news that Wine & Co. were not going to build a “modern” motorcycle company out of their purchase, but such a venture would have missed the point in buying an historic brand like Indian in the first place.

I called it the Indian Gambit back then, and while the first chess pieces on the board have been silently moving into place, Polaris is getting ready to make some bold mid-game moves. Debuting at Sturgis this year its first new machine since the acquisition, it is clear now that Indian hopes to be a better Harley, both in terms of product and brand.

It’s a risky game to play, but nothing ventured, nothing earned. When I see marketing pieces by Indian, like the one headlining this article, I can’t help but think that Wine is sitting at his desk in Medina, just 350 miles away from Milwaukee, saying, “your move Wandell.”