As the motorcycle industry turns its eyes towards millennials, it seems that Harley-Davidson is facing a problem common to many companies attempting to target this age group – namely, student debt and delayed life milestones.
According to a report by Bernstein Research, 5 key factors are leading millennials to buy fewer motorcycles than previous generations. The analysts highlighted two factors they believe have the most significant impact:
1. Burgeoning Student Debt
Millennials are more likely to attend college than previous generations but this comes at a cost. A difference of £11K ($15K) and £19K ($26K) of student debt represents a monthly repayment of £100 ($130), roughly the amount that would be spent on a monthly bike payment for an £6.2K ($8K) bike.
2. Later Life Stages
Compared to their predecessors, millennials are generally moving through traditional life stages later, including family formation. Motorcycle usage follows predictable patterns over time, with peaks immediately before family formation and immediately after children leave the house, or the classic “midlife crisis”. The report suggests that millennials’ current dampened propensity to ride may simply reflect their developmental progress.
To capture younger audiences, Bernstein suggests that motorcycle makers, like Harley-Davidson, consider new ways to make owning bikes more affordable and convenient. Perhaps the key lies in a “like Uber but for Harleys” platform that offers simple ride-sharing options and cost-effective alternatives to purchasing. Only time will tell if the industry will adapt quickly enough to keep pace with future buyers.
Decline of Young Riders Hits Motorcycle Makers
The motorcycle industry is facing a serious problem – a decline in young riders. Without any clear reason behind the shift, the industry is struggling to find ways to attract millennial riders in an attempt to bolster sales figures.
According to analysts at UBS, there are many possible contributing factors. These include the decrease in dirt-bike usage, fewer prominent motorcycle-riding media role models, and a global trend toward urbanization. While the analysts noted that the latter reason was unlikely, due to motorcycles being relatively small and easy to park, they suggested that millennials may prefer experiences over physical possessions because they cannot afford to buy things or don’t like owning cars and homes due to the burden of debt that comes with them.
UBS offered two potential solutions for motorcycle manufacturers to attract more young riders. One suggestion was to experiment with leases rather than loans as the primary means of financing. Another idea was to embrace the concepts of sharing economy through initiatives such as motorcycle sharing programs.
The analysts also proposed more creative strategies to capture the attention of younger generations. These included subsidizing kids’ dirt bikes and producing a TV show with a young, cool motorcycle protagonist. Additionally, they suggested sponsoring more “American Chopper” memes.
Despite these proposals, Harley-Davidson and other motorcycle manufacturers saw a decrease of nearly 20% in 2018, far behind the S&P 500’s growth rate, mostly due to slow sales and unpredictable tariffs. It remains to be seen whether these strategies will bring new riders into the fold.
