May 11, 2025
Jochen Zeitz's five-year tenure wraps up
Jochen Zeitz stepped down as CEO of Harley-Davidson after five years, having transitioned the company’s focus from expanding its demographic to catering to its traditional, older customer base. Originally joining the board in 2007, Zeitz took over as CEO in 2020 during the pandemic, implementing a strategy called "Rewire." This plan prioritized high-end touring bikes and cut back on lower-cost models and youth-targeted innovations, such as the Livewire electric motorcycle, which was spun off as a separate brand. While Harley had a strong market presence in 2019, Zeitz's tenure raises questions about the long-term sustainability of his approach in a rapidly changing motorcycle market.
Harley-Davidson financial statements
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00:00 - Introduction
00:52 - Background
01:29 - Vision change
03:05 - Results of his 5 years leading Harley
10:56 - What's next for Harley?
22:17 - Wrap Up
WEBVTT
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Zeitz, the CEO of Harley-Davidson, is leaving. Is the motor company better off than when he started?
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Welcome to the Throttle and Roast podcast. I'm your host, Niels Meersschaert. Jochen Zeitz is stepping down from the CEO role at Harley-Davidson after five years at the helm. We'll talk about some background on his connection with Harley, how his vision differed from his predecessor, Matt Levitich, what the results of his five years leading Harley-Davidson have been, and what may be next for Harley. Let's get started. So Jochen Zeitz actually joined the Harley-Davidson board back in 2007. So he actually has a fairly long affiliation with Harley-Davidson. Of course, he's well known for helmed Puma, German athletic sporting company, for many years. But he took over as the CEO of Harley-Davidson in February of 2020 on an interim basis and then became the full-time CEO in May of that year, replacing Matt Levitich.
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Now, 2020 was, of course, the real start of the pandemic and sales dropped for many businesses in the early months But if we look at where Harley was in terms of its vision that had been pushed by its prior CEO, Matt Levitich really wanted to have more roads leading to Harley. He felt that the aging out of their core demographic meant that they needed to attract fresh blood.
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And he wanted to introduce as many as a hundred new models and attract younger riders. models like the Livewire, the Panamerica, and even the concept bike of the Bronx Street Fighter reflected that vision that he had, just to change up a little bit and maybe have some different type of models that Harley would offer. Now, of course, in juxtaposition to this, Jochen Zeitz decided to double down on the aging demographic and focus on the high ticket touring bikes that classic Harley riders had tended to buy.
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And he focused on slashing spending and offerings to help reduce supply and thus boost margins. As he put it, Harley Davidson has a tremendous opportunity to build a unique global lifestyle brand rooted in motoculture. Now, this is kind of controversial in some ways because this is a pretty radical change that had occurred from one CEO to the next. One CEO recognized that Harley was losing some market share. It was its demographic of who was buying their bikes was starting to age out. They weren't really appealing to younger riders. And of course, these touring bikes were very, very expensive.
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So if we look at the five years at the helm for Jochen Zeitz, let's kind of look back and see a bit of history. So if we think of it, he really sort of started to take over at the beginning of 2020 and really wrapped up. I mean, now it's it's May of 2025, he's announced a few weeks back that he's going to be stepping down. But let's kind of give through the end of 2024 is kind of his reign. So 2020 to 2024 was sort of his time period that he was fully in in that role. So let's look back at 2019 and see what the full year stats were that now, mind you, this was just preceding the pandemic. So the pandemic impact had not occurred quite yet. But if we look at the full year, Harley was defining the U. S.
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market as anything that was 601 cc's and over. And in 2019 they said that there was 253,000 new registrations of which 124,000 were Harley. And this is in the United States. And that gave them a 49% market share. So they were actually doing pretty well.
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I mean, that's one out of almost two bikes was a Harley Davidson back in 2019. And Harley's fiscal year 2019 income was about $5. 36 billion, of which 4.6 billion was motorcycles and related products. And the remainder was things like financial services. They sold 218,000 bikes globally in 2019.
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Now, Zeitz as I said, he started with a new strategic realignment that he called the Rewire to help them define this five-year strategic plan. And what they ended up doing was killing off some... planned models that would potentially appeal to the non-traditional Harley-Davidson buyer. they spun off Livewire, which of course was that electric vehicle that was actually featured in Long Way Up, a film that came out in 2020 featuring Ewan McGregor and Charlie Borman, of capturing the same sort of vision that they had done with a few of the preceding films. But this time they were riding the Livewire electric motorcycles up from the southern tip of South America up to Los Angeles and having to deal with all the things of how do you manage an electric motorcycle? So they had an opportunity to really market it, but he ended up spinning it off into its own company. It was no longer going to be sold in Harley-Davidson dealers, so it really was kind of almost put out to pasture in a bit of ways.
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And he focused on marketing to the higher end of the market. So they really focused on their touring bikes, especially the Street Glide and the Road Glide, and they eliminated a lot of the lower cost bike options. If you remember, there were some really low cost 750 type bikes that were really meant as almost like an entry-level bike to get new riders into the Harley-Davidson ecosystem. They were water-cooled, so they were not necessarily the same ethos that traditional air-cooled V-twins for Harley riders had been for many, many years, but really focused on that sort of classic bikes that they had been doing forever. there's an argument to be made for that that's a right thing. And certainly for some of the loyalists of Harley, they absolutely do have that ethos that they want to have their bikes in the exact way that they want to have them, and no other way. But so let's look at the financials for 2024. Now in the fiscal year of 2024, Harley-Davidson earned $5.
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billion, of which $4. billion was from motorcycle-related products, and the rest was, of course, financial services. Net income was about $455 million, sales by region in 2024. So North America was 15.1 thousand, with worldwide being 25.7 thousand for the fourth quarter, while the full year had 102,000 units in North America and 151 thousand globally. Now for market share, they said that there had been 253 thousand total new motorcycle registrations in the US, of which 94 thousand were Harley, giving them now a 37.3% market share. So 2024 represented a 7% drop in sales globally and 4% in the US versus the prior year. So if you think of this, in the five years that Zeitz was CEO, total revenue, if we compare full 2019 to 2024. So what was it like the year before he came in and his final full year as CEO?
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Well, total revenue actually went down by about 5%.
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Motorcycle revenue fell by about 11%. Now net profit did climb by about 7%, which makes sense that they were targeting some higher ticket bikes Unit sales dropped by nearly 31%, and US market share dropped by 25%, while the average price per bike climbed by nearly 29%. So definitely going for the high-ticket bikes, but it did impact unit sales. Unit sales, and quite honestly, with only a 7% uptick in net profit, but with a much smaller market share, I'm not sure that that was the right approach for them. And I think this really comes down to the way that in the early days of what Zeitz said about the brand, about Harley-Davidson, he thought of Harley-Davidson as a lifestyle brand, rather than as a motorcycle maker And without a doubt, there is definitely riders who live and bleed Harley-Davidson. To them, it is a large part of their self-image, it is a large part of their lifestyle.
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But the problem is, is that Harley-Davidson was also originally for working class.
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This was, if you look at its origin, people who were coming back from World War II and some of the surplus bikes, they were buying those and then using those bikes. That's where Harley-Davidson really, really exploded in terms of its popularity was in that post-war And when you think of the mindset of keeping a brand purely as a lifestyle brand and then targeting the very, very high end, well, that can certainly work for fashion brands and certainly amongst the wealthy. against the working class origins of Harley-Davidson.
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People in general, they want good bikes at good value. And they may be willing to pay a little bit more for one brand over another. But quite honestly, they can't do it where the price is double or even triple. And with an average bike cost at Harley-Davidson of nearly $27, 000 and a lowest price of $10, 000, the target market for Harley-Davidson now is really limited. I mean, it's not easy for someone, especially given the leisure style of riding that we tend to do here in the United States, people are going to be a little hard-pressed to say, I'm going to spend $10, 000 to $30, 000 on a motorcycle that I might get less than 1,000 miles ridden in a year. It's a very expensive prospect for something that is so infrequent, especially if you're a brand new rider who isn't even sure if motorcycling is right for you. Are you really going to drop $10, 000 just to try it out? I'm not sure.
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So what's next for Harley?
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Well, the new Road Glide and Street Glide that were just updated this past year, they're doing well for their segment.
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But it's a very high-priced bike.
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And when you also consider the CVO, which they've also been really highly prioritizing, these are basically the same bikes, but coming with a few of the options already put in and maybe some really cool paint jobs. But then a price tag that jumps it even further. So that$30, 000 bike might suddenly become a $45, 000 or $50, 000 bike. So very few clients are going to be able to actually realistically afford that as a motorcycle. And this really was the market that Zeitz was aiming for. But again, going up market is cool. Everybody wants to do it. But there's only so many people who can realistically afford that. And given that Harley-Davidson bikes tend to be more popular in the United States in Europe, for example, you're even shrinking it in terms of who's going to be interested in buying your bike.
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It's not like the 80s and 90s when every dentist was buying a Harley to show off. It's the people who actually like to ride who are buying motorcycles today.
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And this is, I think, the challenge. on one hand, many of Harley's riders are fiercely brand loyal. But they're also absolutist on the style and characteristics of the bike. So they don't want it to really change. They want it to look pretty much like it did in the 50s with no real changes. And that's fine. People can have an aesthetic that really resonates with them.
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it's this aspect that they're so gung-ho on. They have to have an air-cooled V-twin. And for many of them, it's the only option.
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So they won't even consider things like the Panamerica or even the Nightster, the new low-end model that's in that $10, 000 range, And a lot of the classic riders won't even consider it. But we no longer have that real Sportster, if you will, the original ethos of it, which was a low-cost bike. The Sportster today is like $12, 000,$13, 000, $14, 000. So it's a very expensive motorcycle for the vast majority of people. and while the Road Glide and the Street Glide have basically the same look as some models did 10 or more years ago, with some very limited tweaks, you they basically look exactly the same.
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But the same problem that Matt had back preceding Jochen Zeitz is many of the Harley riders are aging out. They're not necessarily going to be buying another bike over the next 5, 10, 15 years. And if you look at the bikes that are actually selling the most at Harley, interestingly, trikes are one of the most popular models. And who is riding a trike? It tends to be the older riders who it's kind of hard to keep that 7, 8, 900 pound bike up. It's hard to maintain that balance. So they're getting a trike because they can't manage a traditional two-wheeled, certainly not a super heavyweight bike like the high-end touring models are. So they're getting the trike.
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That's not necessarily going to be an opportunity for you to continue to sell more bikes because that's probably those riders' last bike they're going to buy. They're probably not going to be buying one after that trike.
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So where does this leave them?
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to me, I think if you modernize, you may be left behind. And I think there's another brand that's been out for a long time that recognized this. And while they still have that connection to their past and their history, they do have modernization. And really, this brand is Triumph.
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And if we think of it, they've done a phenomenal job of this.
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They have their modern classic bikes, which look very vintage, even with the appearance of having carburetors. So they aren't just being an air-cooled appearance. They actually look like they're the old carbureted bikes. I mean, really, really keeping into that visual view of what the old bikes were. But they sport modern, water-cooled engines. So they've got more power, more performance. They're actually phenomenal bikes in terms of from a performance and handling perspective. And they still have a really great rumble and sound to them. And their sales have been climbing and climbing. They set new records pretty much every single year.
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And if we think of BMW, BMW once thought of as a very stodgy, old-school bike. A lot of people loved those bikes. They ran forever. And so a lot of riders would get BMWs for that. But they weren't really thought of as sporty. Well, they kind of threw off that edge back in the 90s when, long way around, long way down. These all featured BMW motorcycles for the adventure riding part of the equation. And then, of course, in the early 2000s, when BMW released the S1000RR, their race replica sport bike, which has been a runaway sale success for them.
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It is amazing that they've brought in a completely new demographic of riders into a brand that had never really been doing sport bikes, at least in the modern view of what a sport bike is. And they not only have that, they have things like the Cruiser. They have the BMW R18, which I own, which I love that bike. It's a phenomenal, phenomenal bike. But they even have scooters. So they've got bikes across pretty much every segment. And BMW has been setting new unit sales records for like the past 15 years.
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Every single year has been a new sales record for them. So if we look back on Zeitz's reign, it was really just more of the same from Harley. And while his predecessor with the more roads to Harley was really trying to expand the market and get more new riders connected to the Harley brand, looking at the numbers from Zeitz's term, the doubling down on old bikes concept just really hasn't worked out all that well for them. Their revenue is down.
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Their unit sales are way down.
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Their market share is way down.
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Yeah, they have a slight increase in profit, but that's it. That's the only positive number they have after five years of trying this strategy.
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what are they going to do? I mean, of course, Harley can stay the course. They can follow along with what Zeitz had been implementing. But it will likely mean that Harley will just continue to become more and more niche over time. And I'm particularly worried about the lack of a low-cost offering. If you want to get in new riders into your brand, you have to have that thing that gets them in the door, something that is cheap enough for them to get a taste and become comfortable with the brand so that they then stay with it as they naturally progress. lowest cost offering is $10, 000, in all likelihood, those riders are going to try a different brand that is more affordable for them and they will probably stay with that brand. So you do lose out on that opportunity to attract a rider to your brand and then stay with it. And if we think of this, I mean, look across all the real focus that they have, that expensive touring and CVO.
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Well, people who are buying a big, expensive touring bike are probably people who have been riding for a long time and they need something that can take them on those long journeys and have plenty of packing space.
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People who are willing to invest$40, 000, $50, 000 on a CVO aren't getting that as their first bike. It's just not realistic. So you're missing out on those new riders. And instead, those riders might turn to things like Royal Enfield or Triumph or BMW or others where they can afford a big touring bike. They may even stick with that other brand. And that will further dilute Harley's brand and their market share over time.
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Now, look, I've never personally owned a Harley. I have ridden Harleys. I've tried them out.
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problem I ran into with a lot of them is just I'm very tall. I'm six foot four, so I don't deal well with feet forward controls.
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I just find them incredibly uncomfortable. It puts a lot of pressure onto my tailbone. And after 15, 20 minutes, I want the hell off of that bike. It's just not a comfortable ride for me at all. But the bikes that I actually had considered from Harley were the ones that were a little bit more of the mid controls, a little bit more of the sportier style. And those are the ones that they've tended to phase out and cut. now I'm not representative of every single other rider that's out there, but I'm using it as an anecdote to illustrate a point, which is there are probably many other people like me where there were certain models that they would have considered buying a Harley for. But when they're taken out and they're like, yeah, so I got the choice between a bike that doesn't really perform.
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It's very expensive.
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And I can get something for a third, the price that's better.
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What are they going to pick?
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They're probably not going to go for that Harley. while I love classic bikes, I mean, I have a 50 year old motorcycle. My R18 is very classic looking. It looks just like a 1932 R5 from BMW. I like that aesthetic, but it still has to something that I can actually ride. So the ergonomics on the Harleys just don't work for me, but they're missing out on riders like me. And I've spoken to a lot of other riders who are in the same boat. They're like, they can't do the feet forward.
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They can do mid controls. They love mid controls. If Harley built one, they would absolutely consider it. And so I'd still be very sad to see Harley disappear because they have been such a part of American history more broadly of motorcycle history.
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They are a brand that you cannot ignore. Even if you don't own them, they are a brand that has a lot of presence. They're a brand that has meant a lot through the history of motorcycling. And it would be an absolute tragedy if they were to disappear off of the face of the earth. But my worry is that if they cannot revive the brand, if they can't get back to providing a bike that everyone is able to afford and enjoy, they're going to just end up trying to be like the Gucci of motorcycles. And yeah, Gucci is an amazing brand, beautiful, beautiful quality, but it's out of reach of most people. There's only so many people who can afford to buy it.
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And Harley is not going to around if they grow their revenue. If they can't maintain profitability, if they can't still be seen as relevant in the market.
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So we talked about the transition from Matt Levitich's more roads to Harley strategy to Zeitz's rewire. We also looked at how Harley has progressed over the past five years of Zeitz's term, losing market share and revenue with a slight profit increase. And finally, we talked about what may be next for Harley. So my question for you is, what do you think of Harley's current offerings? Are they headed in the right direction or do you think they should do something different?
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Share your thoughts with the text the show link in the show notes or leave us a voicemail at throttleandroast. com/voicemail Thanks for listening. I'll talk to you next week.
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