(Reuters) – Harley-Davidson Inc (HOG.N) said on Monday it would cut costs, launch new models including smaller light-weight motorcycles and revamp its dealer network in a plan to revive flagging sales in the face of rising global tariffs.
FILE PHOTO: Harley Davidson motorcycles are displayed for sale at a showroom in London, Britain, June 22 2018. REUTERS/Henry Nicholls/File Photo
Harley is scrambling to steer through a year-long slump in U.S. demand as it grapples with an aging customer base and it is aiming to boost sales of its motorcycles overseas.
The company said it expects to spend $675 million-$825 million on these initiatives and expects the new plan to generate more than $1 billion of incremental annual revenue in 2022 as compared to 2017.
“The accelerated strategy will require significant investment to change the trajectory of the business globally, and the company plans to fund it entirely through comprehensive cost reduction and reallocation of previously planned investment and resources,” the company said.
Harley said it plans to develop a more accessible motorcycle with a small-displacement engine of between 250cc and 500cc for Asia through an alliance with a manufacturer in the region.
The company will continue to develop improved touring and cruiser motorcycles and launch new modular 500cc to 1250cc middleweight platform of motorcycles, starting with a 1250cc custom model and a 975cc Streetfighter model in 2020, it said.
Harley has also been spending on product development and marketing, including promoting its learn-to-ride academies at showrooms and developing electric motorcycle technology.
The company plans to launch its electric motorcycle in 2019.
Reporting by Arunima Banerjee in Bengaluru; Editing by Maju Samuel, editing by Saumyadeb Chakrabarty