Harley-Davidson is struggling to stay afloat, and some say the culprit is millennials. Harley Davidson sales have taken a significant hit over the last four years, and the company is struggling to attract new and younger customers.
A survey of 2,100 U.S. adults over the age of 21, cited in a note published by UBS research analyst Robin Farley, found a generational divide in the ways young people think about motorcycles compared to older generations, CNBC reported.
Whereas older generations purchased motorcycles recreationally, or as a hobby, people between the ages of 21 and 34 would consider purchasing motorcycles for “ease of transportation,” the survey found. That is, younger people would be motivated to purchase a motorcycle specifically for practical reasons.
“We believe this significant divergence in incentives to buy a new bike could be what is partly behind Harley’s and the broader heavyweight motorcycle industry’s challenge to tap into a new segment of younger riders to drive growth,” said Farley. “So unless there is a generational shift among younger riders to see motorcycling as a hobby vs. means of transportation, the outlook for the heavyweight industry could continue to be more dependent on an aging demographic.”
It may not be just a generational shift in outlook that’s killing the industry, however. Younger generations might have different attitudes toward purchasing motorcycles than older generations because they can’t afford such a hobby.
Average Harley-Davidson consumers are married men in their early 50s with a household income of $90,000 or higher, according to CNBC. On the other hand, a report by economists at the Federal Reserve found that, “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth.”
In an effort to attract a new generation of riders, Harley-Davidsonintroduced its first electric motorcycle, the LiveWire, earlier this year. The bike will be available at U.S. dealerships this summer.
In a statement to CNBC, the company said, “Our advanced analytic capabilities allow us to deeply understand rider migration trends. In fact, our knowledge of riders informed our strategy to build the next generation of Harley-Davidson riders globally, which we launched in early 2017.”