Harley-Davidson's Modest New Line Still Gets Customers Fired Up

Harley-Davidson's (HOG) 2011 line of motorcycles has everything you'd expect: contemporary custom-designed bikes (also known as "customs") drenched in chrome and dark retro-style bobbers (bikes with a rear fender shortened or "bobbed") and wicked new colors and graphics.

But there are some new twists to the storied brand, like a built-in iPod Nano; a suspended, heated, two-up seat with leather inserts; dual mufflers featuring new chrome billet end-caps with black spears; and new mirrors finished in chrome.

"Everybody looks forward to seeing what they come out with," said Glenn Roberts, editor of Ontario-based Motorcycle Mojo magazine. "It seems like their new line is keeping with the trend of putting out a couple of new models and adding a bunch of modifications to existing lines and then giving them new names."

Overall, the new line Harley introduced Tuesday is modest, with only three new models -- the SuperLow, XR1200X and Road Glide Ultra -- and a host of upgrades to its existing line, including more powerful engines and so-called "Smart Security System." The Milwaukee, Wis.-based company's Custom Vehicle Operation line, or CVO, is also offering four new, limited production motorcycle lines for next year. The base prices on the new lineup of 2011 CVO Harleys range from $29,500 to $36,500, and the three new production models range in price from $7,999 to $12,799.



Harley-Davidson's New Rides

Harley-Davidson unveiled its new 2011 lineup, which included three new bikes and four new limited-edition custom motorcycles.



Hog Sales Still Slow

Yet even with the more powerful engines and sexy new bikes, investors weren't feeling exhilarated. Given the soft economy, Harley has been more tentative in recent years with the introduction of new lines. The company's stock slipped 65 cents, or 2% to close at $28.23 on Tuesday. In after-hours trading it dropped 2.5% more.

Sales are down this year, as they have been for the last three years. Last week, the company reported a $71 million profit, more than triple the same quarter last year. Harley has been saving money by squeezing its operations. It announced plans to cut up to 1,600 jobs by the end of next year. Last year, Harley cut 2,000 jobs, or a fifth of its workforce.

Last week, the company said it would begin talks with the union representing its employees in Wisconsin, where the company plans to restructure or relocate its production facilities in Milwaukee and Tomahawk in order to "close large cost gaps" and "improve flexibility to meet seasonal and other customer-driven production needs." Should a new labor agreement fail to be reached by mid-September, the company said it will move its production operations from Wisconsin to another part of the U.S. (Harley-Davidson said it will keep its headquarters, product development team and its Harley-Davidson Museum in Milwaukee no matter what the outcome.)

"Our focus on continuous improvement goes beyond simply reducing costs," said CEO Keith Wandell. "It extends to our ability to deliver the right bikes to the right markets at the right time."

What About That New Engine?

The three new models add to Harley's existing line of 32 motorcycles. The new line includes the SuperLow, a bike that's designed for new riders with the hope of expanding the company's customer base. The SuperLow is built to be comfortable and to help new riders maintain balance and control.

But it was the four limited-edition motorcycles that had motorcycle blogs on fire Tuesday following the announcement. Particularly notable is the custom fuel-injected Screamin' Eagle Twin Cam 110 V-Twin, the largest-displacement engine ever produced by Harley-Davidson.

Production of this motorcycle will be limited to 3,000 units, and the model has a suggested retail price of $35,999. It comes in three custom color schemes: Rio red and black ember with quartzite graphics; charcoal slate and black twilight with quartzite graphics; and frosted ivory and vintage gold with quartzite graphics.

This story was updated at 2:00 p.m. on Wednesday July 28, 2010.

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