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Will you buy your next new motorcycle by making a reservation online instead of riding over to your local dealer to see the new models in stock?
I'm not talking about a two-wheeled version of Carvana, but rather a slightly different way of doing business by motorcycle manufacturers and dealers. Changes are being forced by the supply chain disruptions that have reduced inventory of new motorcycles in dealerships.
Just about every company is citing supply chain problems in reporting recent sales, though many have turned in good results despite those difficulties. As just one example, in its financial results announced this week, Polaris said that "a lack of product availability during the quarter driven by supply chain challenges" was the reason its motorcycle division lost market share. In other words, you can't sell what you don't have. Polaris reported that motorcycle inventory at dealers in the third quarter of 2021 was 70 percent lower than in the third quarter of 2019. And anyone who's walked into a dealership lately and seen more open space than usual will not be surprised by that news.
While reporting financial results for the third quarter, Harley-Davidson CEO Jochen Zeitz said H-D has sold every available Sportster S so far (see Andy's review or Zack's "Daily Rider" video), mainly to buyers who reserved one in advance. The company now plans to expand that approach.
"In Q4 this year Harley-Davidson will officially launch a reservation process in the U.S. and Canada to capture early demand on select 2022 models," Zeitz said. "This process will provide a consistent experience both at Harley-Davidson.com and at the dealership network."
Recently, when our staff writer Andy Greaser was talking to some people in the car industry, they described a very similar dynamic to him. Instead of sending scarce models to dealers around the country and hoping they end up near eager buyers, they use a pre-order system to get the cars to the people who want them most.
Zeitz said the Harley-Davidson reservation system will benefit both customers and dealers by getting scarce product where it is needed. It's far from being Harley-Davidson's first initiative to adjust to the changing motorcycle market. Earlier this year, Harley created HD-1 Marketplace, which allows customers to search used motorcycle inventory at Harley-Davidson dealers. The company also created the Harley-Davidson Certified program this year to help capture more of the used market and keep that business flowing through dealers.
Multiple companies reporting third-quarter financial results are not predicting a quick and easy end to parts shortages and supply chain disruptions. Expect the motorcycle buying experience to continue evolving as a result.
