American Motorcycle Dealer AMD 237 April 2019 | Page 4
Is the Future a Hybrid of Mixed Platforms?
he rumors surrounding Harley's MY2020 announcement later
this year are mixed, but mostly suggesting a 'holding pattern'
of paint, accessory and possible tech changes.
With 2020 production validation due to have been underway by now, I'm hearing
that an extension of traction control may be on the cards, with the inevitable resulting
reconfiguring of some components.
With LiveWire set to debut before the end of the year, it would appear (and it is
logical) that at this stage Harley is already looking way beyond the impact that the
MY2020 announcement will have on stakeholders (all stakeholders) for their
salvation, in the hope that they are doing enough to keep the sharks from circling
any closer.
There's no question that Harley needs a good spring and summer selling season
though, because with 4Q 2018 showing them barely breaking even, budget for the
dividends and buy-backs that have been the primary shareholder value tools has to
be running dangerously low - especially at a time when they are looking to self-
finance the 'More Roads' objectives from house-keeping.
The evolution of the new model strategy outlined in 'More Roads' will still have three
to five years to play out before it can realistically be expected
to have positive balance sheet trickle down. Harley is still
facing a huge timing deficit.
The recent announcement of the StaCyc children's mini E-
Bike acquisition is an ostensibly logical and 'righteous' step,
one that plugs an entry level gap that allows the Bar 'n
Shield to be indelibly associated with E-Bike opportunities
for new generations as they age with the brand.
However, it also shows just how deeply Harley is leveraging
its interim future, its ability to traverse its timing deficit gap, on a market that everyone
from Scott Wine, CEO of Polaris, on down sees, at this stage, as one that is all cost
with no proven long-term benefit as yet.
In this regard, the European experience is not helpful. The new model registration
statistics from EU markets for 2018 are chilling in terms of placing Harley's LiveWire
ambitions in a real world context - less than 8,000 units were registered in a market
of some 350m riding age consumers that is, theoretically, at least a decade ahead
of the United States in terms of its acceptance of the E-Bike message.
It is to be hoped that there isn't some kind of 'Darkside' Force that dooms everything
that Harley touches in E-Bike terms to be problematic. Having partnered with two
now defunct E-Bike businesses in the shape of Mission Motorcycles (the original
LiveWire prototype) and Alta Motors, let's hope that a perfectly promising project
such as StaCyc doesn't go the same way.
With Polaris having chosen to not capitalize, yet, on the investment it made into
certain Brammo assets some five or six years ago, and with news that BRP, who are
known to still be lusting after a position in the motorcycle industry, recently reported
to have acquired certain remnants of Alta Motors, it would appear to be a space
worth watching regardless of the realistic possibilities for returns on investment.
Much of the rest of the Brammo E-Bike assets were acquired a couple of years ago
by diesel engine manufacture Cummins. Personally, I still find it of interest that
Cummins CEO and Chairman Tom Linebarger, who would have signed-off on that
acquisition, is a non-executive director on the board of Harley-Davidson. Also, that
former Harley CEO Keith Wandell is currently serving as Chairman of the Board at a
T
rejuvenated Exide Technologies. Is Matt Levatich cultivating his own personal E-
Nostra?
Maybe the lens through which I am eying the glorious sunlit uplands of mankind's
brave new electric world are tainted by cynicism - either way I can't help thinking
that viewing the 'Rush-to-E' through rose tinted glasses is premature.
I had the pleasure of a conversation with one of the industry's genuinely 'smart guys'
18 months ago - Stefan Pierer, the majority owner and CEO of KTM Motorcycles.
KTM is embracing E-Bikes, and that of itself is a sign of sorts, as pretty much
everything that KTM touches currently turns to gold.
His company made and sold over 260,000 KTM and Husqvarna motorcycles in 2018
and is on course for a self-imposed target of 400,000 by 2022. His view is that yes,
society needs to address the issues arising from emissions, but that the future is
hybrid, not pure electric.
Maybe the future is one of mixed portfolios of platforms, each specified for the task,
replicating the way that a dizzying array of internal combustion engine solutions
have themselves been refined for their tasks.
This is a sentiment echoed by Hugh Charvat, the recently ensconced new CEO of
MAG, when I interviewed him in Texas in January. His is a
largely automotive and motorsport background, and he
too sees a mixed portfolio future in which gasoline still has
a role to play.
If the colossal investments that both Bosch and Audi are
making in bringing 'clean and green' synthetic gasoline
trial production plants on stream in Europe this year work
out, then maybe those who are saying that the story of our
transition from gasoline dependency is still at an early
stage, we think are right.
Then there is the issue of charging infrastructure and capacity for an entirely electric
road transport fleet, and the need to meet its power needs from renewables if the
objective is to be met.
Perhaps, with the benefit of hindsight, 100 years from now the times in which we
are living will be seen as being more like the way the era of transition from
horsepower at the end of the 19th century to the fledgling automotive culture of
the early 20th looks to us now.
Those who think they have all the answers invariably do not. In fact, they generally
haven't even understood the questions.
It may be that history will judge Harley's rush to 'E' to have been an act of perfectly
timed genius. Maybe, by the end of this century, Harley-Davidson will be the global
god of future-facing transport commerce - an all-encompassing future status the
kind that Asimov created for his fictional global superpower 'U.S Robots and
Mechanical Men Inc.' A future in which Black and Orange is the color of all future
transport solutions? On the other hand, maybe not.
“huge timing
deficit”
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AMERICAN MOTORCYCLE DEALER - APRIL 2019
Robin Bradley
Co-owner/Editor-in-Chief
[email protected]
www.AMDchampionship.com