HARLEY-DAVIDSON Riding on a cycle of success

Aging riders is Harley's main concern for its second century.
MILWAUKEE (AP) -- Harley-Davidson Inc., the iconic motorcycle maker whose bikes call to mind James Dean, "The Wild One" and leather-clad easy riders cruising down the open road, has reached its centennial, surviving the Depression and near-bankruptcy to become an American success story.
Along the way, the company has collected thousands of fans who love the freedom-of-the-road lifestyle and the bike's classic chrome-and-metal look, dependability and a distinctive engine rumble known to Harley riders as "potato, potato, potato."
Harley-Davidson is also celebrating a 46 percent share of the North American heavyweight motorcycle market, an impressive showing for the company that William Harley and Arthur Davidson started in a wooden shed.
"When they're buying a Harley, they're buying an image and a lifestyle first, and a motorcycle second," Tim Conder, an industry analyst with A.G. Edwards & amp; Sons Inc. brokerage firm, said of Harley buyers.
Aging concern
But analysts say Harley has to do more to ensure another 100 years of success.
Aging baby boomers form Harley-Davidson's customer base; the median age of Harley buyers is 46, compared with an industry average of 38. Nine percent are women, and only 16.5 percent of Harley's revenue comes from outside the United States.
"Harley will rightly argue they have plenty of boomers left. But in the long term, the most critical issue of Harley is whether buyers will start looking at Harley as the old guy's bike," said Don Brown, an independent motorcycle analyst in Irvine, Calif.
Market share figures point out the company's potential weaknesses. Although Harley dominates the North American heavyweight market, it comes in second to Honda in the overall U.S. market, according to the Motorcycle Industry Council. Younger riders and those overseas prefer the faster Japanese sports bikes that cost less than the $15,000-plus price tags most Harleys carry.
The company and its hefty motorcycles have left indelible marks on American culture -- giving rise to the rebellious motorcycle culture immortalized in the movies "The Wild One" in 1953 and "Easy Rider" in 1969. That has helped feed a side business of merchandise, including leather jackets, that bear the famed black, white and orange Harley-Davidson logo.
Overcoming obstacles
Harley's first century wasn't always easy. The company overcame the advent of the automobile, the Depression and two world wars to emerge in 1953 as America's only major motorcycle maker. But then came a flood of inexpensive imports midcentury and a merger with American Machine and Foundry Co. in 1969. Harley's quality soured, and AMF put the company up for sale in 1980.
Jeffrey Bleustein, chief executive officer, and 12 executives bought Harley in 1981, and began fixing its finances and quality.
At the company's urging, the government imposed five-year tariffs in 1983 on imported heavyweight motorcycles. That helped, but Harley squeaked by bankruptcy in 1985 after it finessed new financing.
"You consider in 1981, we were begging, borrowing and stealing every penny we could get to invest in this company, not knowing where our future might take us," said Willie G. Davidson, chief styling officer and grandson of a founder. "That's an amazing success story."
To attract new customers, Harley two years ago introduced the sleek V-Rod, its first bike with a liquid-cooled engine. Harley is now launching a second bike into the V-Rod's family and is redesigning its Sportster family of entry-level, lower-priced bikes in an appeal to younger riders and women.
The company also has a subsidiary, Buell Motorcycle, that makes sports bikes, but it only accounted for 4 percent of Harley's bike shipments last year, according to company figures.