What’s happening over at Harley Davidson is what’s happening in the vehicle industry, generally. Harley is making more money off each sale but its sales are declining – by about 45 percent vs. a decade ago.
That’s not a typo.
Ten years ago, Harley was selling nearly twice as many bikes as it is selling now. It is also making three times as much money now – $377 million – as it was making a year ago. Part of this money has been made off financing – in tandem with selling high-profit-margin bikes; i.e., expensive bikes. 
This is something akin to the final life stages of a sun as it enters its red giant stage. For awhile, the red giant swells to many times its original size, emanating more light and, of course, heat. But this seeming increase in puissance is in fact a harbinger of death. The sun is burning through its last reserves of hydrogen and will shortly – in solar lifespan terms – run out and collapse in on itself and explode.
The same is likely to happen to Harley. It is already happening. Dealerships are closing – and consolidating. There is not enough business, apparently, to sustain the current network of stores and that, as they say in law enforcement, is a clue.
“Examples are nationwide, from San Francisco Harley-Davidson, originally founded by AMA Hall of Famer Dudley Perkins, closing after 110 years, to New York Harley-Davidson shutting down. And it’s not just dealerships in high-cost urban areas. Dealers have closed in Illinois, Ohio, Wisconsin, Minnesota, Colorado, Wyoming, Florida, and elsewhere.”
And it’s not just Harley. As mentioned above, the trend is general. Sales are waning across the industry as profits-per-sale wax. It’s weird – but temporarily lucrative. The money made selling a $50,000 vehicle is much higher than the money made selling a $20,000 vehicle but the catch is that it’s harder to sell a lot of $50,000 vehicles. It is, however, easy to be enamored of the money made on the sale of $50,000 vehicles, especially if you are a salesman. The same goes for $20,000 motorcycles, by the way. Just one sale entails a commission high enough to make the salesman – and the dealership – feel momentarily flush. It works like crack and for just as long as there enough people coming through the door who are able to pay $20,000 for a motorcycle or $50,000 for a crossover.
Harley’s own data shows there are not enough. Or – more finely – soon won’t be, if the current downturn continues.
During the same roughly one-year period that Harley made $377 million, North American sales were down by 6 percent. That is an ominous trend, one that correlates with the trend on the four-wheeled side of things. Sales of new vehicles have yet to recover from what they were before “COVID” – when for the first time the average transaction price (what people paid for a new vehicle, on average) approached $50,000. It is now above that mark and all indications are it will rise even higher. It is not unlikely that by the end of the second Trump term in office, the average transaction price will have risen to $55,000 and possibly even higher if Trump floods the system with “stimulus” checks again.
They will stimulate inflation, as more money that’s not worth the paper it’s printed on reduces the buying power of the money already in circulation. Prices will go up in congruence with this, but most of us will not have a congruent number of dollars available to match this rise in prices. This is why sales of motorcycles and four wheeled vehicles are trending down. The effect of less (and more worthless) money in our pockets is of course exacerbated by the now almost-universal disappearance of basic (and so more affordable) things.
Motorcycles were – once – the archetype of this. A tube steel frame, an air-cooled engine (in the case of Harleys as they once were) and a lot fun for not much money. Until fairly recently, most did not have computer controls and such – the cost-adding things that have made cars into expensive appliances.
Bikes were once a way to avoid the cost and boring-ness of a car but they have become nearly as pricey as cars once were, back when working and middle income people could afford to buy them new and often paid them off in as little as three years. New bikes are still less expensive than new cars but the point is they are now more expensive; so much more expensive that buying a car makes more sense because a car is at least capable of carrying more than two people and it keeps you out of the wet and cold.
If you can only afford one vehicle, will it be a bike – or a car?
So who is paying top dollar for Harleys to offset the waning sales of Harleys? It is chiefly men in their 50s and older, who are for the most part the only demographic that can afford to spend what Harley charges for a bike. The problem there – for Harley, inevitably – is that men in their 50s and older begin to get creaky; their backs and knees and eyes aren’t what they were when they were 30. And 60 isn’t far around the corner. 70 comes fast. A dwindling few will continue to ride by then; most won’t.
Will Harley be able to make money selling half-again fewer motorcycles ten years hence than it is selling now?
Maybe – if it can persuade the relative handful of Social Security-eligible men still riding by then to pay $30,000 for a new bike.
. . .
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I often wonder with the huge amount of kids riding e-bikes these days if they will graduate to motorcycles in a few years and we will actually see an uptick in motorcycle ownership? Obviously not Harley’s but maybe the overall trend of motorcycle sales being down will reverse?
When I went looking to buy my first harley back in 1995 I had to get on a waiting list for the 96 model year ( 95s were sold out) put down $500 and was told I would be #5 for a shiny new Road king at my dealer.
Year later I picked it up and paid for it in full. I couldn’t do that today nor would I . Don’t like the new stuff with all the bells and whistles.
My carburetor 96 is still running strong with a little over 100, 000 miles
Couldn’t help but remember this scene in Fletch Lives with Chevy Chase as “Ed Harley”.
https://youtu.be/RZZEJgSkPmQ?si=bDf7FINDfZayyBDC
Morning, Rich!
Those Fletch movies were great; thanks for the memories!
Cant believe no one mentioned them going woke with DEI. People are moving to Indian.
I have a 25 year old Sportster I love it It’s pretty damn quick It’s just the right size for my 60 year old bones to move around and it’s so simple that it’s basically bullet proof. I have no desire to buy a new HD garbage wagon at all
I own a Harley but quit buying their hats and other clothes that all say Made In China, thats just wrong in sooo many ways. Makes me ill a hat on Black Friday sale list for $36 why are they ripping off their customers
HD is in trouble and they/we know it. All very high cost cruisers.
But, they started to get it a little when they created their first adventure bike the Pan American in 2021. It big and pretty awesome and brought a very fair and competitive fight to the market leader BWM in that segment. I bought one, and enjoy the hell out of it.
BUT, the many adventure bike riders were all starting to want middle weight models. Everyone came out with them, and HD was on that path to do so, until that recently fired CEO cancelled the program, obviously to just bolster the stock price. And now they are screwed without it.
The Pan Am accomplished an important thing, in that it got non-HD riders into the dealership, me and others. They would be smart to make a Pan AM middleweight that was likely already designed but canceled.
My brother was into Harleys and talked me into riding. I bought an old sportster and fixed it up. The day I went to the dealership to get an inspection sticker I was pulled over by a policeman. He asked where I was headed, I said to get an inspection sticker. He believed me, then pointed out that my kick stand was flopping down as I rode. I had put the spring on the wrong part of the frame. I fixed it with my leatherman right there. The officer wished me a safe trip. I got to the dealer and brought the bike around back. As I got off the bike a guy walked up to me and asked what I was doing, I told him I needed an inspection sticker. The guy was the manager, he literally told me to get that piece of Sh!t out of there. I was shocked but left. I stopped at a Honda dealer and got a sticker in 10 minutes. I never went to the Harley dealer again. As a side note, I read Harley sold the rights to make the EVO engine to a chinese company and the engine is made in Italy now.
Frankly all the recreational mechanical stuff is way overpriced for what’s left of the middle class. I had the Road King in for brake fluid flush (thanks to antilock brakes another complication that requires regular fluid flush). The dealer is multi line with the quads, side by sides, and OTH bikes (Other Than Harley). The quads were way bigger than I remember along with the $14k price tag. The Polaris side by sides were worse, many $30k & they topped out with a two seat/tiny dump box Polaris special edition something at $65k. Heading out I saw a small beginner bike that anyone older than 8 would be too big to ride, it was $3500.
I grew up middle middle class, friends the same. Boats, bikes, camping trailers, hunting gear, every family had something “goin’ on” for weekend fun. In the ‘60s we had a 23 ft cabin cruiser boat with twin outboard engines and ship to shore capable radio, in dry indoor storage at a marina. Two week boat trips from south of Seattle to the Canadian San Juans every summer. Try duplicating that today without working three jobs.
Just like muscle cars, Harleys are now for the Hair Club For Men set. I’m squarely in the middle of Generation X, and I’m often the youngest person at a car show, cruise, or bike meet.
In fact, I can remember when a Hog or a muscle car was a cheaper and less desirable ride: Hogs and muscle cars were for trashy bad boys—The cool set went with Japanese and European sport bikes and sports cars. So, hogs and muscle cars were available on the cheap.
That’s no longer the case. That said, when the boomers and early GenXers check out or “have to sell for health reasons,” hogs and muscle cars will be much cheaper. But they will be like steam locomotives or steam tractors—a niche market that few will be interested in.
I’ve said it before, like them or not, the Ricer culture is what used to be muscle cars and hot rods. I’m GenX and don’t care much for customized Civics and Subarus but do respect what they’re doing. It’s absolutely what I did in the 80s: find cheap cars, work just as much as necessary at a shit job to turn it into -your- car, spend whatever free time you have left prodding and ribbing other guys. The most important part is busting knuckles and emptying cheap beer cans with your mates.
In 2005, I bought a brand new Honda VTX 1300 for $8500. I enjoyed it and rode it for 10 years, then that was enough for me. I sold it for 50% of what I paid for it new. Proliferation of cell phones helped retire the bike riding for me.
Harleys are cool, but it seems like if you ride a Harley, you have to put on an act. On the Honda, I could be me.
That new VTX had that Harley rumble. A couple of rough looking Harley riders pulled up next to me at a stoplight and were admiring my new bike. One of them asked what it was. I told them Honda. They looked at each other in disbelief and gave me a nod as they rode off.
Just ask a young rider how much he has to pay for insurance to ride even a Sportster and you’ll see why they’re not interested in riding. Dirt bikes ridden off road probably don’t require insurance either.
Even before I was older than dirt Harley sold a complete line from small to large bikes. Maybe they didn’t make a fortune on their S-125 bike back then but it got you into the stealership and when you made more money you could afford a newer, bigger bike.
However now you start out on a smaller import bike and when you’ve got the money to buy a bigger bike you’ll probably be riding a bigger import instead of a Harley if only because you’ve become comfortable with a certain brand and that brand probably won’t be Harley.
Dirt bikes in some state do need liability insurance and maybe an OHV sticker. I ride a dual sport, a street legal dirt bike is all it is, not a fancy BMW or Trans Alp. It differs from a real dirt bike only because it got a 17-digit VIN, DOT approved headlight, blinkers and horn from the factory so it can get a license plate. My annual full coverage insurance is $95 and registration is $80 or so. The thing (DRZ400) cost me $6k brand new in 2021. It’s still possible to have some fun without a lot of cash. Although as a street bike it’s I’m sure not as fun as a Harley, although I can generally out handle them, a 400 thumper is a whole lower orbit when you twist the throttle. I sold an old Honda Shadow 600, which was much better on pavement of course. But too many close calls, just much less stress and more fun camping and following forest service roads instead.
In marketing there’s this thing called mindshare. Harley had plenty of mindshare built up thanks to Hollywood playing up the “bad boy” in the 1060s and 70s. The most obvious being Fonda/Hopper/Harley Davidson staring in Easy Rider. But it was a shortcut to character development in many films, and that translated to sales. But instead of working on getting more riders, they decided to push their “brand” by morphing into a clothing and tattoo company. More mindshare, but not converting that into bike sales. They became a marketing company… er, “lifestyle brand.” The Ferrari of motorcycles. Now that Hollywood has abandoned the bad boy character, at least in human form, they’re not putting characters on bikes (except for CGI renderings of futuristic two wheelers), and Harley-Davidson’s mindshare fell back to the core.
Meanwhile there are lots of people riding. They just do it off-road. Every weekend I see RVs pulling trailers carrying 2 or more KTM or Yamaha bikes out to Moab for a few days of fun in the dirt. Where’s HD? Why aren’t they in this segment? Many of their dealers are. Their Grand Junction dealership also has KTM and BMW cycles, and while the big sign facing I-70 says Harley Davidson, I’ll bet the sales from the other end of the building are what keeps it lit.
In fact, just verifying Teddy More actually is a KTM dealer, I found that they have two separate web sites, one for HD and one for all their other brands. I’m certain that’s intentional and required by Harley-Davidson, just because that’s just the sort of thing the marketing department would demand. I’m sure Teddy didn’t have to pay for that site, it’s likely 100% Co-op advertising, but it has the effect of segregating brands. And if you aren’t paying attention, it might mean a casual but interested buyer might just skip stopping by his shop, not realizing there are four other brands he carries (along with a lot of really cool accessories that won’t fit on a Harley). And for Harley-Davidson, it means that there’s no path to upselling a dirt bike rider to a highway cruiser someday.
Excellent points, RK!
Harley sells big, heavy – and expensive – street bikes. The Japanese all sell a range of still-affordable dirt bikes, which constitute a large share of their overall business. The problem – for Harley – is that a big twin is not the ticket for a dirt bike. They’d need to design a new single and then persuade people it’s superior to the others already available.
Remembering the HD Rapido (Aermacchi disaster) probably cured HD from going there again.
I find it interesting that Triumph and Ducati have branched into dirt and are doing well in their offerings. I just don’t know how long it will take to recover their R&D and make a profit.
My anecdotal evidence: Young men I work with have little interest in riding. Only one I know that does rides a Kowie dual sport. Side-by-sides seem to be more popular (and expensive). They’ll go ass deep in debt for a Razor but not a Street Glide.
I quit riding some years ago. Admittedly there’s days I miss a couple hour ride on Jezebel (90’s era Sportster).
One could add that Harley is facing a double whammy:
First, owing to their mainly seasonal use, motorcycles are a discretionary purchase even more so than cars. But discretionary purchases dry up when the middle class is being euthanized by Trump’s relentless stagflation and military Keynesianism.
Second, a big chunk of Harley’s customer base consists of irascible, thick-skulled neanderthal knuckleheads who are aging out. Unlike the legendary Honda ad of the 1960s, you don’t necessarily meet the nicest people on a Harley. 🙁
Another pathetic victim of EeeVee Fever bites the dust …
Riding a Harley became a lifestyle. Once you got the bike, you had to join the club. Then you had a group to ride with on weekends, an excuse to use it. Then someone decided that the club needed to have a better image, so they started charity rides like Poker runs and toy collections. Now you have to ride. The club is a commitment. What? You’re not going on the toy run? You don’t support kids with cancer?
It’s like running marathons but without having to give up ribs and beer.
I never understood this. I ride a 40 year old blockhead Harley but almost always alone for a road trip, coffee, or grocery run since it has side bags, a cup holder, and a little trunk.
That said, I will probably never own a new one, I’m in my late 30s and have more important things to spend money on. $20k for 2 wheels is a lot.
A guy I know just did a toy run into NYC in early December. He does a bunch of stuff like that. He rides an Indian. I couldn’t get into that but at least he’s riding. Better than my father in law who has a 100th anniversary Harley that just sits in his garage. I think it has 5k miles on it. He seems to think it’s worth a fortune. We’ll see.
Eric,
This is a fine article, as far as it goes. But I was waiting for a ritual thrashing of ‘electric scooters’ which never came. But LiveWire deserves it, lord knows:
Declining sales: The company sold 612 electric motorcycles in 2024, a 7% decrease from 2023.
Financial losses: LiveWire’s financial performance has been poor, with losses deepening in 2023 and revenue declining significantly in 2024.
Six hundred twelve — is that a lot?
EeeVee Fever just ain’t what it used to be. 🙁
I think the people who run these companies know from the start what the end result is going to be. I have a feeling it’s just another grift. They’ll get their financial backing because they are part of the green grift, make their ridiculous salary, and move on, screw the blue collar workers in the factory. Green grifters should all get the electric chair powered by solar and wind.
Oh god, I got coffee through my nose… solar electric chair. It would take forever to finish the job. Bzzt… ouch! (Several hours later…) Bzzt… ouch!