What Was Harley Thinking in Shutting Down Buell?

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One of the biggest puzzles for me last year was Harley-Davidson shutting down its Buell brand and not putting it on the market for possible sale. I’ve talked to a couple of presumably knowledgeable people about why, but I’ve not received any answers that make sense.

I’ve always been under the impression that H-D bought and nurtured Buell to provide its dealers with a younger customer. Today’s typical H-D buyer is 47, compared to 41 for motorcycle owners in general, according to the MIC 2009 Statistical Annual. It obviously seemed like a good idea at the time, and while the market in general has declined significantly, it still seems to be a smart thing to do in building for the future.

The boomer generation is slowly fading from the scene and will continue to do so at an accelerated rate. To a lot of younger people, Harley-Davidson is their equivalent to the boomer generation’s “grandfather’s Oldsmobile.” I’m not saying Harley-Davidson is going to fade away completely — I’m confident it’ll always have a hard-core following. But without attracting a significant number of younger buyers, it will be a diminishing factor in the marketplace as demand for its product wanes and younger buyers opt for motorcycles of a different style.

I’m possibly the only journalist who doesn’t know Eric Buell, and to be honest, I haven’t paid that much attention to Buell motorcycles. I had an opportunity to ride one for about 50 miles back in 1999. It was a Thunderbolt S3T. It was a pleasant enough motorcycle, until you had to come to a stop, at which point it was like riding a paint shaker. The bike struck me as nothing special but perfectly acceptable as long as it was moving. Time passed, and the bikes got better and better. With the introduction of the Ulysses, it appeared that Buell had finally reached the tipping point. The bike was universally lauded in the press, and I heard a lot of people talk about buying one, although I don’t know anyone who actually did.

In a recent interview by Moto Magazine, Eric Buell attributed part of Buell’s demise to a falling big-bore sportbike market. Yes, that’s true. The market fell from its peak in ’07 of 70,000 units. Large-displacement cruiser sales dropped almost 13 percent over the same period.

From an outsider’s point of view, Buell looked to be doing alright and certainly moving in the right direction. Obviously I’m not privy to any Harley inside information, and I know that corporations do strange things for reasons that are obvious to them but not to us. But, again, it seems to me that for the long term, Harley would be wise to develop the Buell line and engage customers of a younger age.

I find it odd that a 2010 Harley-Davidson looks pretty much like a 1930s Harley- Davidson, while the current Mustang looks nothing like model A. The people buying things change, and their tastes in what those things look like changes as well. Motorcycles change too, to reflect the tastes of a changing market. No one, with the exception of a couple of Euro retro models and Harley, is building what it built in the ‘60s or ‘70s. (OK, it’s not exactly the same, but the casual observer would be hard-pressed to tell the difference.) In the case of Triumph, it builds and sells far more modern bikes than Bonnevilles.

 

 

 

 

 

 

 

 

 

 

 

In the same issue of Moto Magazine, Buell expressed his confidence in the ability of America to design and build a world-class sportbike, and I agree with him. The problem is money. It seems it’s been available to build Harley clones, but not so available for sportbikes.

Harley still has within its grasp the opportunity to expand its market share — or at least steady it — and move the brand’s appeal to the next generation. It’s possible with the Buell brand to take on the world with up-to-date, innovative sportbikes and tourers and whatever else the next generation of motorcyclists is going to demand. Maybe that’s the plan: to stabilize its current brand offerings and restart Buell down the road. Maybe.

If I were Victory, I’d sure be looking at Buell. While Victory’s basic product line has evolved nicely and it has demonstrated an ability to think outside the box, its sales haven’t quite taken off as it probably would have liked. The addition of a sportbike or line of sportbikes would expand its opportunities.

In the meantime, Harley sits on an asset that will lose value as each year passes, one that could conceivably be sold, or developed to make it attractive to another group of customers.

This story originally appeared in the Dealernews March 2010 issue.