The supposed millennial penchant for “killing” industries will get thrown round rather a lot, but it surely may actually be taking place to at least one American icon: the Harley-Davidson bike.
Knowledge recommend a substantial generational divide in attitudes towards heavyweight bikes, the form of bikes offered by manufacturers reminiscent of Harley and Polaris’ Indian model, mentioned UBS analyst Robin Farley in a be aware revealed Friday.
It seems that youthful folks do contemplate shopping for bikes, however for completely totally different causes than older clients, and that has doubtlessly profound implications for corporations reminiscent of Harley-Davidson, which has been struggling with declining sales and an aging demographic.
Shares of the bike maker have fallen 32 p.c within the final 12 months.
The survey’s most important discovering that 21- to 34-year-olds contemplate shopping for a motorbike for “ease of transportation,” whereas older patrons buy bikes “as a pastime” or as a result of “bikes are cool.”
This distinction is essential, because the common Harley-Davidson buyer is a married man in his early 50s, with a family earnings at or above $90,000. These are the purchasers shopping for bikes out of a ardour for the product or way of life.
Youthful patrons look like extra motivated to think about bikes for sensible causes, which suggests it’s doubtless they are going to be extra fascinated about cheaper bikes that herald decrease margins for producers.
“We consider this important divergence in incentives to purchase a brand new bike may very well be what’s partly behind Harley’s and broader heavyweight bike trade’s problem to faucet into a brand new phase of youthful riders to drive development,” Farley mentioned. “So until there’s a generational shift amongst youthful riders to see motorcycling as a pastime vs. technique of transportation, the outlook for the heavyweight trade may proceed to be extra depending on an getting older demographic.”
It may not be all unhealthy, although.
“Maybe one hopeful signal for the trade is that youthful potential patrons cited the second most typical purpose to purchase a bike is that it ‘goes with their self-image,'” Farley mentioned.
Harley-Davidson has initiated an formidable plan to lure 2 million extra riders to the model in 10 years. Amongst different issues, the corporate has is organising driving colleges across the nation, and it’s releasing an electric motorcycle called the “Livewire.” The corporate additionally previewed two electrical idea bikes earlier in January.
Officers at Polaris weren’t instantly accessible to remark, however Harley-Davidson instructed CNBC the corporate has been conscious of the demographic pattern and it has been informing the corporate’s technique.
“There’s nothing new right here,” Harley-Davidson instructed CNBC in an announcement. “Our superior analytic capabilities enable us to deeply perceive rider migration tendencies. Actually, our data of riders knowledgeable our technique to construct the subsequent era of Harley-Davidson riders globally, which we launched in early 2017.”
The survey polled 2,100 adults within the U.S. over the age of 21 from Sept. 1, 2018 to Sept. 21, 2018.