Daily Management Review

Harley Davidson To Sell Used Bikes Under Its Certified Used Bike Program To Attract Young Customers


Harley Davidson To Sell Used Bikes Under Its Certified Used Bike Program To Attract Young Customers
A new strategy to get younger customers to purchase a new motorcycle adopted by Harley-Davidson Inc is to first offer them a used one.
A certified pre-owned bike program, known as H-D Certified, is being planned to be rolled out the Milwaukee-based company. This strategy is used by car makers for years now in which well-tended used vehicles are offered to customers as an alternative for “entry-level” new models that have low margins.
This new used bike selling strategy adopted under the Chief Executive Jochen Zeitz is part of a five year turnaround program of Harley. This is also the latest program of the company to expand the appeal of its brand to the broader market segment in addition to its staple customers of middle-aged and affluent ones.
Over the last six years, Harley which has a 118-year-old heritage and history, has been steadily losing out market share in its home market of the United States with steadily declining retail sales.
At the same time however, there has been strong demand for used bikes of the company as they are generally much less e3xpensive than new ones. The sale of new Harley bikes was three times less than the sale of pre-owned bikes last year, according to reports quoting some dealers of the company in the US.
There has been an increase in demand for outdoor recreational activity because of the coronavirus pandemic but dealers are finding it hard to offer customers bikes that suit their purposes, said Melissa Walters, owner of a Harley dealership in Fresno, California, as quoted in a report.
“People are tired of staying home,” she said. “They want to go out and do something.”
Other reports also quoted similar sentiments from other dealers.
In 2020, the brand most in demand in the used big bikes market was Harley according to data from industry consultant J.D. Power, which is a boost for the certified program of the bike maker in terms of attracting new customers.
This also means that Harley will not have to expend resources engineering and manufacturing new lower-cost bikes – that typically delivers lower profit margins to the company, and yet be able to build brand loyalty and attract new customers.
“We believe this program will drive Harley-Davidson desirability, increase sales and margins, and enhance the overall customer experience while supporting growth,” Zeitz said.
Harley had launched the pre-owned bike program last month and under it the company will certify motorcycles up to five years old that has been used for up to 25,000 miles (40,234 km). The company will also provide a 12-month limited warranty after inspection of the bike under the certified used bikes program and consumers can also get finance from Harley’s financial arm. In this manner the certified used bike program will distinguish itself from other used Harleys bikes.
“It’s going to draw new riders … and will give them entry into the Harley-Davidson world,” said Brad Conn, marketing coordinator at an Indiana-based dealership that plans to sign up for the program.