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Harley-Davidson tries to rejuvenate its business

Time Magazine, 2/18/09

Abstract:

In a Facebook video, the screen is filled with a sea of 20-something men and women cruising on sleek black motorbikes, all of them Harley-Davidson's Sportster Iron 883s. It's part of a marketing campaign to generate buzz around the newest Sportster. "That's hot!" one woman declares on Harley-Davidson's Facebook page, where other minidocumentaries promoting the bike are posted.

Back at Harley's Milwaukee headquarters, one can only hope for heat. Priced at roughly $8,000, the Sportster is positioned to help one of the world's most iconic brands survive the gravest economic crisis in decades. But it must also help Harley-Davidson move beyond its aging baby boomer base.

It's been a grueling few weeks for American companies, but particularly so for Harley-Davidson, purveyor of bikes that easily top $30,000. Last month, the company reported that its fourth-quarter global sales fell 13.1 percent. Last year, its profits sank nearly 30 percent. And it's been a wipeout for investors: Harley-Davidson's stock price has plunged nearly 70 percent, to $11.96 a share in mid-February, from $37.34 a share one year ago. Americans haven't lost reverence for Harley-Davidson, but a key problem is that people are simply less willing to spend money on luxury items. Overall motorbike sales fell 7.2 percent last year, according to the Motorcycle Industry Council, an Irvine, Calif., trade group.

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