The one time iconic American motorbike brand Harley-Davidson Inc has been struggling to find an appropriate strategy to woo young customers and revive sales in the United States and elsewhere. On Friday, the company selected a new interim chief executive of the company – the choice was a board member of the company credited with turning around the Puma brand’s near-bankrupt business.
After the company reported its worst ever sales performance in at least 16 years, the former Chief Executive Officer Matthew Levatich was ousted by the Milwaukee, Wisconsin-based company after the very poor performance. The new interim chief will be Jochen Zeitz in place of Levatich.
The mandate for the new interim CEO Zeitz is till such time that a new chief executive ius found for the company by an external search firm, Harley-Davidson said.
The market was expecting the exit of Levatich, said Michael Uhlarik, founder of consultancy Motorcycle Global.
The near impossible task of turning around the loss-making Puma in the 1990s and making it one of the largest sports brands of the world is credited to Zeitz.
“It is not about the next quarter or earnings per share,” Uhlarik said. “They will have to build a long-term, multi-year strategy.”
It has been years that Harley had reported a growth in sale in the United States – which is its biggest market by far, as more than half of the total motorbikes sold by the company is the accounted for the market. The main challenge for the Milwaukee-based company is to attract the younger generation to its bikes as age is catching up with the tattooed, baby-boomer consumer base of the company.
The strategy that Levatich used for turning around the fortunes of the company in its home market after taking over the reign of the company in May of 2015 was to make a slew of new launches including battery-powered bikes.
However the result of the strategy was not encouraging at all.
The sale of the company for 2019 was the lowest in 16 years. The company has been forced to scale down production of its bikes in order to prevent price discount pressure and protect profit because of the drop in its sales in the past 12 quarters.
The shipment of bikes by the company in the US for 2019 was its lowest in over two decades while the global shipment in the same year was the lowest since 2010.
Investors were becoming restless because the company can show no signs of a sales revival.
There has been a drop of 46 per cent in the stock value of Harley since Levatich took the helm. In comparison, there has been about 40 per cent gain in the S&P 500 Index in the same period.
The poor performance of the company raised questions about whether the company would try a buyout or go private to workout its production strategy as well as its branding and marketing strategies without the pressure from restless shareholders always demanding the company ensures profits are made.
(Adapted from Reuters.com)