Harley’s young-adult market share and other damned lies

[SuperHans]

Interesting article from Hell for Leather
http://hellforleathermagazine.com/2010/09/bullshit-harley%E2%80%99s-young-adult-market-share-and-other-damned-lies/

(and no it's not a Harley bashing thread.)

Back in July, Harley-Davidson  released 2nd Quarter 2010 results that flaunted improved net revenue in an attempt to hide net income figures that were still massively lower year-on-year. In an apparent attempt at misdirection, The Motor Company also dropped a whammy of a claim: “Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults.” Could that be true? Well, like presidents diddling fat chicks with cigars, it all depends on your definition of “is.”

Samuel Clemens once famously claimed that Benjamin Disraeli once said, “There are three kinds of lies: lies, damned lies, and statistics.” Doubting Harley’s claim, we approached an industry analyst, who prefers to remain anonymous, to help us discover the facts behind the numbers.

Here are Harley’s claims:

“Despite the decline in second-quarter retail motorcycle sales, we believe interest in the Harley-Davidson brand remains strong among riders of all generations. In fact, Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults.”

“. . . in the U.S., no one is reaching new customers better than Harley-Davidson.”

“Based on recently provided Polk data, we have been the heavyweight motorcycle category market leader in new motorcycle sales to young adult men and women ages 18 to 34 since at least 2006.”

“And when it comes to new motorcycle sales to young adults in ALL sizes of on-road motorcycles, Harley-Davidson has been the U.S. market share leader since 2008.”

Our analyst provides some context: “H-D accounts for over 60% of the on-road market, all displacements.  Even if only 10% of those Hogs are being bought by the under 35′s, that’s about 20,000 bikes, more than any single other manufacturer in the US could claim… on road.  What that statistic says more than anything, is that H-D has US market saturation, making any kind of statistical claim possible, depending on how you chose to categorize the data.”

The key in all this is the “heavyweight” category, an outdated classification from the MIC that dates from the 1970s when a 650cc Bonneville was a big, fast motorcycle. “Heavyweight” motorcycles start at 651cc, which means all 600cc sportsbikes, 650cc twins like the SV650 and Ninja 650 and, critically, popular learner fodder like the Kawasaki Ninja 250 are excluded from that class. That Ninja 250 was the the fifth best-selling bike, of any class, in the US last year.

Our analyst asks, “How can anyone state with a straight face that they are ‘a leader among young buyers’ and conveniently exclude all the beginner bike market, where typically 90% of new, young bikers shop?
“This is statistical-propaganda bullshit. While they are not lying, they are suggesting that they dominate the entire youth motorcycle market because of straight consumer appeal, and the media take the big headline and run with it.”

The analyst goes on to suggest that a more accurate headline would read, “Harley is the market leader in new motorcycle sales to young men and women ages 18-34, in the cruiser market.” Not such a shocking revelation after all. Rather than indicating the success of a marketing effort directed at young people or the degree of a model’s appeal among new riders, the numbers merely indicate that Harley continues to sell more cruisers than any other brand.

According to WebBikeWorld, 520,502 motorcycles of all kinds were sold in the US in 2009, down from a high of nearly 1.1 million in 2005. Harley says it shipped 223,023 motorcycles during 2009, representing about 43 percent of total sales (this total includes off-road). The MIC and individual manufacturers are notoriously cagey about releasing sales figures by model or manufacturer or even class. We’re still trying to get a sales total for sub 651cc bikes. We approached both Harley (for sales of 883cc capacity bikes) and Kawasaki (for sales of the Ninja 250) and both declined requests to release any numbers.

The average age of a Harley buyer has actually increased in the last five years, from 42-years-old in 2004 to 49 in 2009.

Just for some perspective and in no relation at all to US youth motorcycle market, Honda says it sold 10,114,000 motorcycle worldwide in 2009.

There are no Harley-branded bikes under 883cc currently in production, although The Motor Company has identified the need for a real learner bike and told us that it’s currently developing such a model.

So is Harley reaching new, young customers better than all other bike makers? Other than trying to please shareholders by paying lip service to doing so with some marketing and spraying a few bikes matte black, it’s not even trying to. Is Harley selling more cruisers to young people than anyone else? It sells more cruisers than anyone, so yes.

Is Harley the only manufacturer fudging numbers to drum up positive coverage from media outlets that can’t be bothered to investigate? Of course not, here’s two more examples:

Earlier this year, BMW announced a 21% year-on-year increase in Q1 sales. Articles following that press release made it sound like BMW was on fire during a deep recession, attributing that increase to huge sales of the then-new S1000RR superbike.

In the release, BMW didn’t make it clear whether that improvement was in the US or globally. In 2009, BMW sold 87,306 bikes globally and 9,168 bikes in the US.

“1,925 bikes [21% of US sales] in three months is not such an impressive improvement considering that the US is BMW’s third most important market,” says our analyst. “Even if we take the global figure, it gets really silly when you realize that BMW accounts for about 1% of the market. So that media frenzy was about 0.21%, one-fifth of one percent of the global motorcycle market. I’m sure Honda wasn’t quaking in their kimonos.”

Did BMW sales increase during Q1 2010? Yes. Did BMW sales increase during Q1 2010 to a degree in proportion to dramatic reporting? Nope.

Another example of statistics without context presenting an unrealistic picture hails from only yesterday and from the Motorcycle Industry Council itself.

The MIC’s press release reads: “Despite the rising number of motorcycle miles traveled, fatalities decreased 16 percent and injuries declined 6.3 percent last year, according to the National Highway Traffic Safety Administration’s 2009 Fatality Analysis Reporting System. Among all types of motorists, motorcyclists had the second-largest reduction in fatalities, behind large-truck occupants, and the largest drop in alcohol-impaired fatalities – also a 16 percent reduction.”

What could be the cause of the first decline in motorcycle fatalities in 11 years? Could training, safety and awareness campaigns finally be paying off?! The reality is much less exciting than the 16 percent number alone.

As the MIC notes in the same release, “The latest MIC Owner Survey found that fewer than 50 percent of riders have taken formal rider education and training such as the Basic RiderCourse offered by the Motorcycle Safety Foundation.” The decrease in fatalities can largely be attributed to the decrease in motorcycle sales that took place during the same time period.



Motorcycles sales by year (courtesy WebBikeWorld).



Motorcycle fatalities by year, note strong correlation with sales.

Back in April we brought you preliminary data from the Governor’s Highway Safety Association Motorcyclist Traffic Fatalities By State report, which actually cited the recession and a nearly 40% decrease in bike sales year-on-year as the reason for what, at the time, was expected to be at least a 10% drop in fatalities. That report’s chart of fatalities by year, extending back decades, correlates strongly with motorcycle sales, suggesting that the greatest factor in motorcycle fatality rates is the numbers of motorcycles sold and, presumably, the number of new riders on the road.

Did motorcycle fatalities decrease in 2009 by a significant percentage? Yes. Can motorcycle fatalities be shown to have decreased last year for any reason other than a dramatic drop in sales? No.

Looking at the larger picture, the divergence between these marketing claims and reality isn’t so much a story of companies doing anything unexpected, evil or immoral. The purpose of marketing and PR efforts is to present a company and its products in a positive light. Instead, the conclusion that’s invariably drawn here is that motorcycle media outlets fail to investigate facts or question sources, instead simply regurgitating corporate messages to consumers. The roll of media is supposed to be informing the public and serving as a check on corporate manipulation of the masses. Why isn’t that happening here?

Sources: BMW, Harley-Davidson, WebBikeWorld, The Kneeslider, Knol, MIC, The Governor’s Highway Safety Association Motorcyclist Traffic Fatalities By State, 2009 Preliminary Data, NYTimes

[bomber]

If you are a publically-traded company, there is no shame in spinning facts your way.

In fact, if you are a PTC, ther eis MASSIVE shame in not doing so.

To their credit HDI has always been good at this.

[Cricket1]

Bomber makes a good point, but the key to the article is the last paragrah. Yeah, companies will spin stuff in a positive light, but it is the motorcycle medias job to point it out, not just repeat the spin.

[SuperHans]

You're both absolutely right.

[stefrrr]

“My broker put it thus: ‘If the stock market understood the depth of Harley’s product/retail deficiency, there would be a selloff on a colossal scale.’ In my opinion, if HD doesn’t produce a viable (commercially, and industrially profitable) series of new motorcycles and re-cast the brand away from the Boomers within the next 4-5 model years, they will end up like Ducati, MV, Guzzi and many incarnations of Indian: another glorious brand without a hope of sustainable business.”

Ducati doesn't have a hope of sustainable business?  

[JonS]

Ducati doesn't have a hope of sustainable business?  

I will add one   I have read a number of times, that Ducati is experiencing a growth in sales, period. No fuzzy logic. Not many can claim that.

[Blunder]

Just a personal observation but I work with quite a few motorcyclists, varying in ages from mid 20s to mid 60s, and I'd hazard to guess that about 90% of them love and ride Harleys. Sure, we're all well paid and can afford the price of entry, but Harley is still the choice. Metric cruisers are ignored and everything else is derided as being undesirable or dangerous. I'm tolerated because they all think I'm crazy anyways.  

As for the viability of Ducati, here's an interesting Op-Ed piece-

http://www.superbikeplanet.com/2010/Sep/100910a.htm

I doubt Ducati will turn into a T-Shirt company that happens to make motorcycles, but it is interesting how they're changing their marketing direction. Rossi will probably race bikes for maybe 2 more years then make a splash in World Rally, his second motorsport love. What will Ducati do then?

[DogBoy]

I read that superbikeplanet editorial earlier. That guy is way off base. Ducati's decision to pull back from a factory involvement in WSBK won't have a dramatic impact on sales. They pulled out of AMA racing in Ducati's biggest market (long before the DMG takeover) and it didn't hurt one bit. The Nicky Hayden replica 848 sold out instantly and it was just graphics and had no relation to the bike he rides other than the Ducati logo.

Ducati is not going to become a t-shirt company that sells motorcycles and HD has never been one. HD is one of the most recognizable brands on Earth and they aren't going to screw that up. I've been hearing about the collapse of HD because of their aging customer base for 25 years and its never happened and it never will. The MC industry leadership is very sophisticated. HD will expand and contract along with rest of the motorcycle market relative to the motorcycle riding population.

Ducati is not pinning their entire future on Rossi. They will be doing well long after Rossi has moved on.

No one on this board, at superbikeplanet.com or hellforleather runs a major motorcycle manufacturer. The people in charge of those companies know a hell of a lot more than we give them credit for. We can hand wring all we want but it is just idle discussion that is fun to exchange. Don't confuse it for insight.

[Blunder]

WOW! I just got smacked down, and hard I think, by Doggie.  

That's OK. I know him a little bit so I'm not gonna sulk about it. We only need one nosebleed around here and that position is amply filled.

I think we here have a tilted and biased view of motorcycling. We're the nutcases who love the sport to the point of obsession and have our own prejudices about how the world should work. It does make for interesting reading, doesn't it?

[DogBoy]

My comments weren't directed at you. My experience about most younger riders wanting/buying HD's has been the same as yours. Even young sportibke riders I know want HD's. They want to get laid.  

I was addressing the SBP.com editorial about Ducati and the Hellforleather (and general ST.N) inference that HD is always on the verge of imploding.

[Blunder]

It's all good.  

I wanna get laid too.

[atadaskew]

I had to get rid of my Harley cuz I was getting laid too much.


(ok, a dimbulb 'helped' me get rid of it)

[DogBoy]

I had to get rid of my Harley cuz I was getting laid too much.

 


I'd like to have seen that for sale ad.

[falconati]

Ducati really is getting stale, with their growing sales and positive cash flow.

[Blunder]

 


I'd like to have seen that for sale ad.

They had that black sheep thing going for them awhile back.

Maybe we need a poll. Do black sheep push back better than white sheep?

[Windblown]

The key in all this is the “heavyweight” category, an outdated classification from the MIC that dates from the 1970s when a 650cc Bonneville was a big, fast motorcycle. “Heavyweight” motorcycles start at 651cc, which means all 600cc sportsbikes, 650cc twins like the SV650 and Ninja 650 and, critically, popular learner fodder like the Kawasaki Ninja 250 are excluded from that class. That Ninja 250 was the the fifth best-selling bike, of any class, in the US last year.

I'd hardly call a sub 651CC bike a Heavyweight so I don't see the problem with this claim.

The analyst goes on to suggest that a more accurate headline would read, “Harley is the market leader in new motorcycle sales to young men and women ages 18-34, in the cruiser market.”

Since their market IS cruisers that seems pretty important.

According to WebBikeWorld, 520,502 motorcycles of all kinds were sold in the US in 2009, down from a high of nearly 1.1 million in 2005. Harley says it shipped 223,023 motorcycles during 2009, representing about 43 percent of total sales (this total includes off-road).

 

Which means Harleys market share for on-road bikes is even more impressive if dirt bikes (which is a market they don't compete in) would be subtracted from the total units sold figure.

The average age of a Harley buyer has actually increased in the last five years, from 42-years-old in 2004 to 49 in 2009.

Without a similar comparison for the industry overall this figure is meaningless.

Is Harley selling more cruisers to young people than anyone else? It sells more cruisers than anyone, so yes.

And that's what they stated. So what's the problem?


I'm not a fan of Harleys personally. The author and the analyst appear to have an axe to grind.

[Kraz]

Kinda funny - the original article gets waved around as proof that HD doesn't need to attract young buyers, b/c they already have them.

[SuperHans]

I think some of you are focusing a little too much on the HD part of the article and not the article as a whole.

Don't just accept what a company or the media spoon feeds you to be true. Take these things with a grain of salt and think for yourself.

Of course HD isn't going out of business now or anytime in the foreseeable future. That wasnt the point of posting this article. If you actually read the whole article, it mentions more brands/topics than just HD.

[Kraz]

I think some of you are focusing a little too much on the HD part of the article and not the article as a whole.

Don't just accept what a company or the media spoon feeds you to be true.

I think that most of us don't need an article to tell us that.

[johnnyquest]

So is all this Harley Davidson "market share" and "demand" the reason that I got an all-Harley issue of MotorCyclist in the mail? I'm definitely writing the editor about this. Harley finally makes a bike that handles somewhat decently (xr1200x) and suddenly the mag thinks they should make an all-Harley issue? Are they really that out of touch with their readership and subscribers?

I dunno, I guess I'm still pissed about the way they killed off Buell right when they were starting to enjoy some success.

And they really think they need to make a starter bike? I thought the 883 was the starter bike?

JQ

[SuperHans]

I think that most of us don't need an article to tell us that.

I beg to differ. I hear a lot of people parrot what they read in a magazine around here.

[falconati]

I read that BMW makes final drives that explode and the explosion makes the parts go everywhere and the parts that they manufacture are heat seeking and at least 5 people now have died from a BMW driveshaft through the heart.

[SuperHans]

I read that BMW makes final drives that explode and the explosion makes the parts go everywhere and the parts that they manufacture are heat seeking and at least 5 people now have died from a BMW driveshaft through the heart.

That is actually true.

[badcat]

So is all this Harley Davidson "market share" and "demand" the reason that I got an all-Harley issue of MotorCyclist in the mail? I'm definitely writing the editor about this. Harley finally makes a bike that handles somewhat decently (xr1200x) and suddenly the mag thinks they should make an all-Harley issue? Are they really that out of touch with their readership and subscribers?

I dunno, I guess I'm still pissed about the way they killed off Buell right when they were starting to enjoy some success.

And they really think they need to make a starter bike? I thought the 883 was the starter bike?

JQ

I just received my all Harley Motorcyclist too, WTF. If I want to read a Harley rag, I'll pick up the latest Easyriders. I don't mind Motorcyclist covering them, because, well duh, they are motorcycles, but c'mon... I don't like any motorcycle magazine doing an all anything issue. It just smacks of "special advertisements" but instead of a section, it's the entire magazine. Just cover motorcycles and motorcycle racing and toss in some motorcycle history while you're at it.  

[Blunder]

How much did you pay for that issue of Motorcyclist?

[Kraz]

I beg to differ. I hear a lot of people parrot what they read in a magazine around here.

Well I said most, not all... I really doubt MOST people hear are just mag parrots.


Anyway, only in America can a 900cc V-twin be called a starter bike.  

[badcat]

How much did you pay for that issue of Motorcyclist?

I paid the subscription price. How does that change anything?  

[Blunder]

 I paid the subscription price. How does that change anything?  

I got mine for free, so I don't care what they issue.

[badcat]

I got mine for free, so I don't care what they issue.

Point taken. I pay, so I care somewhat. All I meant was that if I wanted to read exclusively about Harley's I'd buy a Harley rag. Right now Motorcyclist is approaching Cycle World on the major suckage scale. At least they still have Jack Lewis.

[Blunder]

Ahh, Jack Lewis. Dude might have a future if he further develops his style. Right now he seems to be a Henry Manney III wannabe, and a poor one at that, but I'll give him another read. Afterall, I'm getting the rag for free.

[Galo]

There are no Harley-branded bikes under 883cc currently in production, although The Motor Company has identified the need for a real learner bike and told us that it’s currently developing such a model.

Tongue somewhat firmly in cheek, I've always considered any bike with about 45 hp as a 'learner's model'. Not a basic, raw 'beginners' model, but I can't with a straight face swallow the line that a 45 hp bike is an experienced rider's first choice for a performance steed.

Sorry. Bring on the flames now....

[Kraz]

Bike #13 for me is an 883... but you're right, it's not exactly a lot to handle.  

That being said, I don't think it's a great beginner bike just b/c it's so heavy and still fast enough to get you in trouble.  45hp isn't a lot, but it's geared pretty low and the torque is very usable.  Also, it's a bit expensive to be a first bike right off the showroom floor.

There's more to riding than HP.

Tongue somewhat firmly in cheek, I've always considered any bike with about 45 hp as a 'learner's model'. Not a basic, raw 'beginners' model, but I can't with a straight face swallow the line that a 45 hp bike is an experienced rider's first choice for a performance steed.

[badcat]

Ahh, Jack Lewis. Dude might have a future if he further develops his style. Right now he seems to be a Henry Manney III wannabe, and a poor one at that, but I'll give him another read. Afterall, I'm getting the rag for free.

Henry Manney? Never heard of I, II or III. Still I like Lewis, his stuff makes me laugh and these days I'll take a laugh wherever I can get one. But, to each, his own, eh?

[bomber]

Lewis is the only bright spot in Motorcyclist these days --

I hadn't made the Manney link, but, yeah, I can see that -- I was thinkink of Lewis as a second rate Hunter Thompson, but there are lots and lots of those . . . .

What we need is a good LJK Setright replacement.

mumblemumblemumble

[Geoff]

So is all this Harley Davidson "market share" and "demand" the reason that I got an all-Harley issue of MotorCyclist in the mail? I'm definitely writing the editor about this. Harley finally makes a bike that handles somewhat decently (xr1200x) and suddenly the mag thinks they should make an all-Harley issue? Are they really that out of touch with their readership and subscribers?

Motorcyclist takes a break from their all Ducati coverage and you're complaining?  

[chornbe]

Well, Harley's screwed. I hear there's a world-wide shortage of 49 year olds.

[Geoff]

Well, Harley's screwed. I hear there's a world-wide shortage of 49 year olds.

No there isn't. Check out all of the middle age 'working women' on Craigslist.  

[Blunder]

We have an LJK Setright reference! That dude was brilliant.  

Can we go for a Gordon Jennings?

Henry Manney III was Road & Track's Editor at Large and European correspondent from the mid-'60s through the mid-'70s. He wrote the F1 reports before Rob Walker took over that job. His turn of phrase was most humorous. He authored most of the April Fool's Day Road Tests, reporting on such things as motorized skateboards, coal-fired steam locomotives and desert sail cars.

Henry was yr fthfl svnt. Sadly, he succumbed to a series of strokes. Peter Egan now has Henry's position and while there are instances of influence, Peter has held himself back from full on plagiarism. Mr. Egan has developed his own worthwhile style.

Now, can anyone find an example of Dick O'Kane? If you thought Hunter could get weird....

[antvq]

Well, Harley's screwed. I hear there's a world-wide shortage of 49 year olds.

That's OK, I hear they are making more 49 year olds next year.  That goes hand in hand with the predicted shortage for 48 year olds.   


Oh, and it's worldwide not world-wide 

[shah269]

Look HDs will always sell.
Yes they are slow, yes they are heavey, yes the technology which powers these things is the same that powered the first HD that came off the line.
BUT...as long as girl get all hot and horny over the sight of a HD they will continue to sell these things!
No joke, I can't tell you how many times girls have asked me if I ride a HD and when I said no they were really well....not too into me for I rode a non HD bike.
Untill this changes, HD will have a market. Be is smaller than what it was but it will have a market.

[Geoff]

Look HDs will always sell.
Yes they are slow, yes they are heavey, yes the technology which powers these things is the same that powered the first HD that came off the line.
BUT...as long as girl get all hot and horny over the sight of a HD they will continue to sell these things!
No joke, I can't tell you how many times girls have asked me if I ride a HD and when I said no they were really well....not too into me for I rode a non HD bike.
Untill this changes, HD will have a market. Be is smaller than what it was but it will have a market.

Manufacturers of Harley clones will have a market, too. Bolt on cooling fins and plastic chrome are the new authenticity, ya know.