Hogs With Muted Growls Tour U.S. as Harley Tests e-Bikes

June 23 (Bloomberg) -- Zero Motorcycles CEO Richard Walker discusses the company’s electric motorcycles and competition from Harley Davidson on “In The Loop.” (Source: Bloomberg)

Forget about the snarly Harley, the folks at Harley-Davidson Inc. (HOG) want to know what you think of a quieter Hog that whistles down the road on electric power.

After generations of growling gasoline engines with their powerful potato-potato rumble, the Milwaukee-based motorcycle maker has come up with a green bike that runs on electricity. It’s sound is “high-toned, but still very strong,” said Mark-Hans Richer, the company’s chief marketing officer, sort of like a fighter jet landing on an aircraft carrier.

“Whether it’s riding by or you’re riding on it, the sound needed to have an emotional character,” he said. “When you hear it go by, you say, ‘Wow. That’s cool.’”

The motorcycle maker, whose storied highway cruisers are as loud as they are large, will take 22 electric bikes on a U.S. tour starting next week to solicit reactions that will help shape the environmentally aware vehicle’s development. Depending on the feedback, the no-exhaust Harley may never make it out of R&D, said Richer.

“It’s how we like to explore product, through the eyes of our customers,” he said in an interview. “We couldn’t imagine this sitting on a turntable at a show with models handing out brochures. It needed to be something real, something that customers could have a first-hand experience with.”

Photographer: Daniel Acker/Bloomberg

A Harley-Davidson dealership in Ottawa, Illinois. Close

A Harley-Davidson dealership in Ottawa, Illinois.

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Photographer: Daniel Acker/Bloomberg

A Harley-Davidson dealership in Ottawa, Illinois.

Two fleets of the prototypes will be demonstrated in more than 30 cities starting June 24 in New York, the company said in a statement. People will be able to take the bike for a spin or sit astride one hooked to a machine that’ll simulate the riding experience, Richer said. The tour will continue next year in more U.S. cities and in Europe and Canada.

Changing Rider

“At first blush, this certainly looks contrary to what Harley-Davidson’s image and message has been historically,” Kevin Tynan, an analyst with Bloomberg Industries, said in an interview. “It’s progess and if they can do it at a reasonable price and comparable performance, I don’t see any business case why you wouldn’t open the brand to a whole new generation and mindset.”

Richer declined to comment on the electric bike’s power pack, or how many miles it can go without a charge.

For much of its 111-year history, Harley sold choppers as fast as it could to buyers it knew well: wealthy, middle-aged American white men. The recession changed that.

Revenue in 2009 fell almost a quarter from a year earlier. Chief Executive Officer Keith Wandell, hired from auto-parts maker Johnson Controls Inc. (JCI), cut costs and pushed Harley to try to expand its customer base to women, younger drivers, non-whites and non-Americans.

Source: Harley-Davidson Inc.

Harley-Davidson, whose storied highway cruisers are as loud as they are large, will take 22 electric bikes on a U.S. tour starting next week to solicit reactions that will help shape the environmentally aware vehicle’s development. Close

Harley-Davidson, whose storied highway cruisers are as loud as they are large, will... Read More

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Source: Harley-Davidson Inc.

Harley-Davidson, whose storied highway cruisers are as loud as they are large, will take 22 electric bikes on a U.S. tour starting next week to solicit reactions that will help shape the environmentally aware vehicle’s development.

Overseas Sales

While 25 percent of its 2006 revenue came outside the U.S., the company now forecasts that by this year 40 percent of sales will be in foreign markets, which is where more than half of its dealerships are located.

Harley also changed how it develops new models, using focus groups and clinics and opening up test-runs to a wide circle of consumers and dealers in the U.S. and overseas.

Results hit the market last year with the Touring line, equipped with voice-activated and touch-screen GPS systems, and the Street bikes, Harley’s first lightweights in decades.

If Harley does go green, it’ll compete against a handful of companies, including Brammo Inc. and Zero Motorcycles Inc. Global sales of electric motorcycles are expected to grow slightly, according to a report from Navigant Research, to 1.4 million annually in 2023 from 1.2 million this year.

“This plays into this whole sustainability movement,” Jaime Katz, an analyst with Morningstar Inc. in Chicago, said in an interview. “Millenials are becoming more important and as generations evolve this sort of ecologically different project is something that could attract a much wider audience.”

Harley rose 0.3 percent to $70.14 at the close in New York. The shares have gained 1.3 percent this year.

To contact the reporter on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Niamh Ring, James Callan

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