Sunday Strategist: Indian Motorcycle Shifts to Conquest

(Bloomberg Businessweek) -- No one is panic-buying motorcycles. Well, probably not. But it’s safe to say there is no longer a bull market for a chrome-covered splurge. 

Tomorrow, into the midst of the pandemic, Indian motorcycles will launch one of its most ambitious (and expensive) ad campaigns to date, splashing “mid-seven figures” across a wide range of media, including a national television buy (the NBA and the NHL playoffs were a big part of the package, though the spots will transfer elsewhere). At its heart, the new Indian push is an old-school, Coke-Pepsi taste-test, encouraging motorcyclists to compare its bikes to those of Harley-Davidson.

In addition to the ads, Indian, a Polaris brand, has stocked at least one $21,700 Harley at almost all of its 200 North American dealerships for the moto-curious to compare and contrast. 

"It's as big of a bet as we've placed previously," Indian marketing chief Reid Wilson told me.

Every consumer-facing executive faces a binary market dynamic: either draw new, first-time customers or steal someone else’s—what car and motorcycle makers call “conquesting.” Indian has always been tuned for the latter, since Polaris bought the long-defunct brand and relaunched it in 2014. Its first product wasn’t a small, starter bike aimed at riding rookies, but rather a big, piggy cruiser with a Harley-esque price tag ($19,000).

"From a brand standpoint, there’s a definite slice of the pie that wants a different choice,” Wilson says. “They don’t want to be confined to an image that was already there.”

In other words, Harley’s outsized lore, its brand swagger, its appropriation as a cultural identity by roughnecks and retired dentists alike, can be a liability as much as an asset. Indian's oppositional stance has worked out nicely. It now reckons that it has rounded up about 10% of the U.S. market for big, cruiser bikes and 20% of the mid-sized bike business.

As for the new ad blitz, Indian was working on it long before the world started falling apart, but the timing is propitious. Harley is skidding badly. At the end of January, CEO Matt Levatich stepped down shortly after posting the company’s fifth consecutive year of declining U.S. sales. Harley has made decent headway luring green riders, but it’s having a hard time keeping them on the road. Meanwhile, it’s losing some of its best customers to age and, increasingly, Indian.

It’s safe to say the motorcycle market is in for a rough ride as Covid-19 casts a shadow over the busiest time of year for sales and rallies. In the U.S., motorcycling still hasn’t recovered from the last recession. New bike registrations dropped to 253,000 last year, less than half of their 2006 peak. Meanwhile, Harley’s U.S. market share has slipped from 53.3% when Indian revved up in 2014, to 49.1% last year. 

It's a scared and scary new world out there and customers will be scarce for awhile. Savvy companies will be working hard to keep the ones they have, while stealing the ones they don't. Self-contain, swipe, repeat.

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To contact the editor responsible for this story: Silvia Killingsworth at skillingswo2@bloomberg.net

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