Harley-Davidson is hoping to break into untapped markets in a big way by offering a small and lightweight motorcycle. Countries like India, Italy, Portugal, and Spain are primary countries targeted with the bike’s release. The bike will sell for either $6,700 or $7,500 depending on engine capacity, which makes “The Street” the company’s least expensive motorcycle. The Street is the Harley-Davidson’s first new bike platform in 13 years, and while it is going to be sold in the US, it is geared toward an international audience. The company is projecting a 15 percent increase in international sales from 6 years ago, resulting from a proliferation of dealerships outside of the US.
In the domestic market, The Street is Harley-Davidson’s bridge into the lightweight motorcycle market. The company has stayed out of this segment of the market until now, leaving demand to competitors like Honda, Yamaha, and Polaris. The Street is expected to directly compete with Honda’s Rebel, which is another lightweight motorcycle but costs significantly less at $4,190. The company has been able to operate without a lightweight model by relying on the heavyweight domestic market. In 2012, 62 percent of new motorcycles were considered heavyweight – 57 percent of which Harley-Davidson provided.
While Harley-Davidson’s competition offers comparable or better prices on products, Harley offers prestige products. This prestige factor allows the company to overcome such large differentials in price. Further, the bike’s prestige is enhanced by a lack of supply; the company is unable to produce motorcycles at a rate fast enough to meet market demand. Consumers often have to wait for significant periods (1 – 2 years) before actually receiving a motorcycle. Scarcity is another reason why price is higher than most competitors.