Give it up: Why you're not getting a Harley-Davidson Bronx

It's understandable that some people inside Harley-Davidson are tired of hearing it. We hear it here, too, just about every time Common Tread posts a story on anything related to Harley-Davidson. It even came up in Zack's recent Daily Rider review of the Harley-Davidson Nightster.

I get it. Lots of people want Harley-Davidson to build the Bronx. Here's the deal, though. It's not going to happen. You might as well get over it.

The concept that will not be realized

In case you're new to this discussion, back in 2019 Harley-Davidson showed a concept called the Bronx, using the new, modern, liquid-cooled Revolution Max engine in a motorcycle with standard ergonomics. It even appeared on the Harley-Davidson website as "coming in 2021." It never did. But there's a segment of the riding public that really wants to see Harley-Davidson build a performance street bike, something that's not hampered by cruiser ergonomics or bagger-class weight or is adventure-focused like the Pan America. Those are the people who keep looking at every year's new model announcements and ignoring the shiny new stuff while asking the beleaguered Harley-Davidson employees, "But what about the Bronx?"

Look, it's really simple. You're not getting the Bronx because Harley-Davidson's guiding corporate strategy was completely changed right after the Bronx concept was shown. Under former CEO Matt Levatich, the strategy was "More Roads to Harley-Davidson." The focus was on growing the number of models, expanding into new segments, growing sales outside of North America, and aggressive outreach to riders and potential riders beyond Harley-Davidson's core customers. When Chairman and CEO Jochen Zeitz took over in 2020, he reversed course with a plan called the "Rewire" and by summer of 2020 I was speculating he might kill the Bronx.

Under Zeitz, Harley-Davidson is selling fewer motorcycles but making more profit on each one. In the financial report recently released, Harley-Davidson shipped 7% fewer motorcycles globally (10% fewer in the main North American market) in 2023 than in 2022, but revenue was down just 1%. Zeitz brags about how many models have been eliminated from the lineup. And what did Zeitz brag about most on the conference call about the financial results? Profitability. He noted that in 2019 Harley-Davidson made a profit of $1,300 per motorcycle sold. In 2023, that figure was $3,700 per motorcycle sold.

The Bronx would only drag down that average profit. Currently, the most similar bike in the company's U.S. lineup is the Nightster Special at $13,499, with the same Revolution Max 975 engine we'd expect to see in the Bronx. So let's assume a Bronx would cost the same or a little more, with better suspension and brakes. Sure, some people who specifically want a Harley-Davidson performance bike would rush to buy one. But just as we saw with the original LiveWire electric motorcycle and the Pan America adventure-tourer, after those initial enthusiastic buyers are burned through, new buyers will be shopping more critically. Many of them will decide to spend a few thousand dollars less and get something like a $10,599 Yamaha MT-09 instead. Others will go with a brand more associated with performance and buy a KTM Duke 890 R with a current MSRP of $12,949 (though discounted units are easily had). And that's just to name two of several strong competitors.

This is exactly the kind of competitive, lower margin segment Zeitz dislikes. It's the same reason that a Pan America 975 that some of us half expected to see this year did not materialize. In fact, Harley-Davidson went the other direction. Instead of adding a Pan America 975 at the lower end of the range to the Pan America 1250 and 1250 Special, Harley-Davidson went the opposite direction, eliminating the base 1250 and adding the $28,399 CVO Pan America. So $20,000 is now the starting point for a Harley-Davidson adventure-tourer. That's the prevailing wind in the company: not toward more affordable and more accessible, but toward more premium and more profitable.

Whether that's a great long-term strategy is, as my colleague Zack Courts is fond of saying, a whole 'nother podcast. But it's working in the short term and as long as Zeitz is firmly in control of corporate strategy, I don't see that direction changing.

I'm not the first or only person to make this case about the Bronx. Regular Common Tread reader "Mr. Bond," who knows finance because he's a bond analyst by trade, has made similar comments many times in response to other readers asking why we haven't seen the Bronx. In my discussion with the Harley-Davidson employee, I outlined Mr. Bond's case. The response? "He's not wrong."

And that's why we won't see a Harley-Davidson Bronx.