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Harley-Davidson gives sneak peek of electric motorcycle prototype

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Posted at 4:24 PM, Sep 07, 2014
and last updated 2014-09-08 08:01:19-04

"What the hell is wrong with freedom? That's what it's all about."

—Billy, in the movie "Easy Rider"

It didn't end well for Captain America and his sidekick, Billy, while riding their Harley-Davidsons in the 1969 film. But a story about a couple of rebels chasing freedom on the open road suited a generation.

Or at least enough of it to give Harley-Davidson plenty of customers over the years as they became prosperous enough to afford a motorcycle that can cost $20,000 and up.

But times change, baby boomers age and Harley-Davidson, facing a demographic free-fall, is in the midst of a shift to ensure its future.

Though baby boomers remain the company's bread and butter, it has begun snagging more women, minorities and young adults with the new cheaper and lighter Street 500 and 750 models built at its Kansas City, Mo., plant.

And then there's Project LiveWire, a prototype electric motorcycle that rolled into Kansas City on Thursday. Consumers examining the bike saw that it's a far cry from the "hogs" that made Harley-Davidson famous.

Though no decision has been made yet to mass produce it, the prototype sends a signal, say observers, that more is afoot. The company wants to be "cool" to a new generation and known for doing more than producing your father's motorcycle.

"They don't want to become the Oldsmobile of motorcycles," said Tom O'Guinn, a consultant and marketing professor at the University of Wisconsin in Madison.

Harley-Davidson, born in 1903, has had its struggles. It suffered from mismanagement and imports in the 1980s. The company surged back and, at its peak, fueled by baby boomer cash, sold 349,000 motorcycles in 2006. That was a 10-fold increase from 1986. After its peak, the company was slammed by the recession and has slowly recovered.

In 2013, it sold 260,000 motorcycles with roughly a third coming from international sales.

But the decline in sales couldn't all be chalked up to bad economic times. The number of baby boomers who owned motorcycles was beginning to drop, and they were the ones that most preferred the "hogs."

The share of boomers among motorcycle owners in the U.S. fell from nearly half in 2012 to 36 percent in 2009 and has continued to decline, according to the Motorcycle Industry Council.

Also ebbing was a key group of baby boomer customers in their 50s with incomes topping $100,000.

"I am a great believer that when you are over 50, you still want to be 30," Nigel Villiers, a Harley executive in Europe, said in an interview with the publication New Perspectives. "You buy the right clothes, the right shoes and accessories and, when you're over 50, you can actually afford it."

Chris Harrison, recreational riding manager for the American Motorcycle Association, is optimistic Harley-Davidson can overcome the demographic crunch. The Street 500 and 750, which cost less than half the heavier cruiser and touring models, can bring in younger adults. Once they get used to them they may trade up to more expensive bikes.

"It is a pivotal cycle," he said.

But any shift will need to avoid alienating its core group of older customers.

Dick Carpenter, 68, lives in Pleasanton, Kan., where he owns and restores Harley-Davidsons. He admits to being old-fashioned and doesn't much care for the idea of a Harley-Davidson electric bike.

"Personally, I wonder if it is worth doing," he said.

Several of the electric bikes are making an appearance in Kansas City through Saturday. The bikes, if you have a motorcycle driver's license, are available for test drives.

On Thursday, they got plenty of interest.
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