Harley-Davidson Axes Its Factory Racing Programs

[advrider]

It appears that Harley-Davidson’s cost-cutting measures have claimed two new victims.  Namely, its two factory-supported race teams operated by Vance & Hines.

According to Motorcycle & Powersports News, Harley says it is returning to the foundations of its racing efforts.  The MoCo says it will refocus on building the brand by offering support to its dealer network through contingency programs.

“Harley-Davidson’s heritage is rich with racing lore and legacy, and throughout our brand’s history, Harley-Davidson dealers have been the cornerstone of our racing programs.  We are excited to continue to support the XG750R racing motorcycle and NHRA Pro Stock Motorcycle efforts through our dealers.” – Harley-Davidson’s Jon Bekefy, General Manager of Brand Marketing

While supporting grassroots programs is laudable, it does have a major impact on the factory teams attempting to build Harley’s brand with race wins.  In other words, Harley’s factory race teams in American Flat Track and NHRA Drag Racing are on their own for 2021.  And that’s a shame for the teams that have worked so hard to fly the Harley flag on race circuits around the USA.

Vance & Hines’ success with Harley

Vance and Hines have fielded Harley’s NHRA drag racing program for 18 seasons.   And during that time, the team has taken 107 NHRA Motorcycle Pro Stock wins and 10 NHRA championships.

The Vance & Hines NHRA Drag Racing Team was very successful.

In their own press release, Vance & Hines say that Harley has chosen not to field factory racing teams in either NHRA Drag Racing or American Flat Track in 2021.  Without a factory sponsorship, Vance & Hines will “redeploy its racing development team towards creating high-performance products for a variety of vehicles, brands, and race series in both the two and four-wheel segment.”

Vance & Hines founder Terry Vance also thanked Harley for its partnership:

“We thank Harley-Davidson for being a partner with Vance & Hines for 20 years. Together, in AFT and NHRA, we have celebrated 116 wins and 11 championships.  Harley-Davidson has been one of the best partners we’ve ever had.”

Vance & Hines, President and CEO Mike Kennedy added:

“Vance & Hines is having its best year in over a decade. We’re strong and we have a strategy that drives our growth and expansion in our current markets and in new ventures.  While we loved our time running the factory race teams for Harley-Davidson, we couldn’t be more excited about the future.”

Over its 41 year history, Vance & Hines has operated factory race teams for many companies, including Suzuki, Yamaha, and Ducati.

American Flat Track results

Harley did not have as much success in American Flat Track racing as they did in drag racing.  But in 2020, they did take some wins.  Unfortunately, the last championship they were able to capture was in 2015.

Common Tread says that Harley’s termination of its AFT program signals their surrender in the face of Indian’s AFT dominance.  They correctly point out that Harley has been unable to win a title in the Super Twins class since Indian’s FTR750 race bike appeared.

Vance & Hines American Flat Track effort did not yield the number of wins that both Vance & Hines and Harley-Davidson would have liked.

And, they say if the Vance & Hines team with all its expertise and experience couldn’t win the Super Twins class with Harley’s XG750R, it’s hard to imagine that a local Harley dealer will be able to do better.

I would have to agree.  Even though potential race teams can purchase an AFT prepped XG750R Harley-Davidson from Vance & Hines for $35,000, a new team will be starting from ground zero.

Is it race wins or something else?

But from my perspective, Harley’s move is less about race wins; it’s more about cost-cutting and sticking to its core clientele; those who ride heavyweight cruisers.  Race wins likely don’t mean a bunch to the core Harley riders that Zeitz is courting.  Hence, his move seems to be a double win.  He reduces cost, and he doesn’t “dilute” the Harley ethos of his core clientele.

On the other hand, race wins can help bring new customers to the brand.  Once a brand becomes successful, the old saying, “Race on Sunday, Sell on Monday,” can build excitement, which results in increased sales and “new to the brand” customers.

It’s those customers are something Harley desperately needs.  While Zietz publically says that he’s not concerned about his customers aging out of riding, all CEOs have to be concerned about where the company’s future sales are coming from.  This is true, especially if that company’s customers are aging out of the ability to use or enjoy their product.

If Zeitz is really planning to bring the brand back to its heyday, he’s going to have to do more than cut costs.  He needs to ensure that 10 years from now, Harley’s products are desirable for a wide range of clientele.

While Zeitz’s plan to reduce cost increases Harley’s profitability, it’s not doing much to ensure the company’s long-term viability.   In the short term, strengthening the balance sheet is key to keeping investors happy.  And Zietz is doing precisely that.

Long term strategy

But if there are no new products for people to be interested in, the company will ultimately shrink.  And perhaps that’s what Zeitz has in mind.  Keep the investors happy, show better profits, and then sell the business to someone else.   That’s the bet I’m most willing to take.

I’m not happy about it, but I don’t see a way for the brand to grow with Harley’s current business philosophy.  I guess we’ll have to wait and see Zeitz’s “Hardwire” plan to really understand where the MoCo is headed.

What do you think of Harley’s elimination of its factory race teams?  Is it good for the Harley brand?  Let us know in the comments below.

 

All photo credit: Vance & Hines

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