Harley struggles to fire up new generation of riders with electric bike debut

CHICAGO - Harley-Davidson Inc is betting on electric motorcycles to attract the next generation of younger and more environmentally conscious riders to reverse declining US sales.

But as Harley ships its first "LiveWire" bikes - priced at $29,799 - to dealers, there is little evidence the 116-year-old brand is catching on with new young customers.

The problem lies mostly with this "super-premium" product's price. The bike costs nearly as much as a Tesla Model 3, and aims for a market that does not really exist: young, "green" and affluent first-time motorcyclists.

The sleek sportbike has been available for preorder in the United States since January. However, the bulk of the orders are coming in from existing and old riders, according to interviews with 40 of the 150 dealerships nationwide that are carrying the bike this year.

The dealers Reuters spoke with account for little over a quarter of LiveWire dealerships and are spread across Wisconsin, Illinois, Indiana, Ohio, Michigan, California, Nevada, New Jersey and New York.

Harley has for years failed to increase sales in the United States, its top market accounting for more than half of its motorcycles sold. As its tattooed, baby-boomer base ages, the Milwaukee-based company is finding it challenging to woo new customers.

In 2018, Harley posted the steepest sales decline in four years in the United States. US sales are tipped to fall again this year.

The heavyweight motorcycle maker's stock price has declined by 42 percent in the past five years. By comparison, the S&P 500 Index has gained 47 percent.

PRICE BARRIER

When Chief Executive Officer Matt Levatich announced LiveWire's launch last year, his hope was the ease of riding motorcycles with no gears or clutch would help attract young and environmentally conscious urban riders.

In an interview with Reuters in February 2018, Levatich said the bike would help address Harley's demographic problem.

"It is more about the next century than the last century," he said at the time.

The preorders, thus far, have belied those hopes, according to the dealers.

"It is appealing to a demographic that is already riding," said Gennaro Sepe, a sales manager at a Harley dealership in Chicago. His store has received four preorders for the bike. All of them are from existing riders.

Harley declined to comment on LiveWire preorders.

The motorcycle maker is not the only company investing in battery-powered transportation.

Tougher emissions rules in Europe, China and the United States are forcing auto companies to switch to electrified models. A survey of US millennial motorcyclists, published in February by the Motorcycle Industry Council, found 69 percent of the riders interested in electric motorcycles.

Harley's dealers said they are getting inquiries from young customers, but are struggling to translate them into sales. A key reason: LiveWire's retail price.

"Interest is very high," said a sales manager at a New Jersey-based dealership, who declined to be named because he was not authorized to speak to media. "But once you get to pricing, interest is thrown out of the window."

Over half of young college graduates in America, whom Harley is courting with battery-powered bikes, are saddled with student loans that entail average repayment of $200 to $300 per month.

Harley is not offering any discount or incentives to push the sales, either, the dealers said.

In an interview with CNBC television in May, Levatich called LiveWire "one of the best engineered products on the market" and said it was worth its price.

Gary Jon Prough, general sales manager at a dealership in Countryside, Illinois, said the vast majority of millennials cannot afford the bike as LiveWire is targeted at young and affluent customers with incomes above $100,000 a year.

TESLA'S WAY

To drive up sales, Prough and other dealers expect Harley to go Tesla Inc's way: launch more affordable battery-powered vehicles after creating a buzz with the premium model.

Tesla's first electric car cost over $100,000, but prices came down with subsequent models. Its Model 3 now comes with a base price of $35,000 and was instrumental in lifting its vehicle deliveries to a record level in the latest quarter.

Traditional Harley Davidson entry-level bikes cost about $6,900.

The motorcycle maker has plans to bring out four more electrified models in the mid-power, low-power, e-bicycles and kids' two-wheeler segments by 2022.

But unlike Tesla, Harley does not enjoy the true first mover's advantage.

California-based Zero Motorcycles is already selling electric bikes in the United States with retail prices ranging from $8,500 to $21,000. Its top-end bike - SR/F - is similar to LiveWire, but costs nearly $9,000 less.

Still, Bob Clark, a dealer for Zero's bikes in Chicago, says he has not yet sold one SR/F to riders under the age of 35. All three electric bikes he sold to young riders this year were in the $10,000 price range.

"Young riders are environmentally conscious, but are also very price-sensitive," Clark said.

It is not just pricing. LiveWire's limited range is also hampering its sales.

The bike can travel 146 miles (235 km) in the city or 95 miles in combined city and highway riding per charge. An ordinary household outlet can provide an overnight charge, while Level 3 direct current fast chargers stationed at Harley dealers will fully charge the bike in 60 minutes.

This renders LiveWire less effective for longer-distance rides, limiting its appeal among rural riders who prefer touring bikes.

Seven Harley dealerships told Reuters they have not even bothered ordering the bike, which would require investing in a Level 3 charging station and training staff.

An Ohio-based dealer, who had initially signed up for LiveWire, said he pulled out at the last minute as he was not sure of the bike's demand in his area.

DELAYED ARRIVAL

A delay in LiveWire's arrival in stores has left the dealers in the Midwest and the East Coast with hardly a month to aggressively push the bike before the snow season sets in. Winter generally means a lull for motorcycle sales.

When dealers began taking preorders, the delivery was expected in August, but was later shifted to September. On Sept. 30, the dealers Reuters spoke with were still waiting for the first bike.

In a Twitter post on Oct. 2, Harley said the bikes are starting to arrive at authorized dealers. The tweet also carried a picture of the first LiveWire that was "rolled off the line" at its York, Pennsylvania, facility in late September.

With the demand rather limited, the dealers said, Harley has decided to keep the supplies tight in order to protect the bike's brand value and prevent any price-discounting pressure. The dealers said they are all expecting to receive less than 10 LiveWires this year.

James Hardiman, an analyst at Wedbush Securities, reckons Harley would sell between 400 and 1,600 LiveWires in the first year. That is not even 1 percent of the 228,051 bikes it sold worldwide last year.

"This is going to be largely a rounding error certainly this year and even next," Hardiman said.

(Reporting by Rajesh Kumar Singh in Chicago Editing by Caroline Stauffer and Matthew Lewis)

source: news.abs-cbn.com

Nissan grants Renault execs boardroom seats, ending dispute

TOKYO/PARIS - Japan's Nissan said on Friday it would grant alliance member Renault's representatives seats on key committees of its board, ending a dispute between the 2 automakers.

Nissan said it would give Renault Chief Executive Thierry Bollore a seat on its board's audit committee and Renault Chairman Jean-Dominique Senard a seat on its nomination committee. Senard will also become vice-chairman of the board.

The move comes after demands by Senard for representation on the committees in return for approving Nissan's overhauled governance structure plunged the 2-decade-old partnership into crisis.

"Groupe Renault welcomes Nissan's decision to grant Renault's representatives a seat on the committees of the Nissan board, which will be presented to the general shareholders' meeting on June 25," Renault said in a statement.

"The agreement reached on Renault's presence in Nissan's new governance confirms the spirit of dialogue and mutual respect that exists within the alliance," added Renault, whose merger talks with Fiat-Chrysler broke down this month.

Nissan also said it would nominate Yasushi Kimura, adviser at JXTG Holdings Inc, to chair its board.

The French state has a 15 percent stake in Renault, while Renault itself owns 43.4 percent of Nissan.

French ministers have consistently highlighted the importance of ensuring the Renault-Nissan alliance remains strong, before planning any further consolidation with the likes of Fiat-Chrysler.

The 20-year-old partnership between Renault and Nissan has been strained since former leader Carlos Ghosn was arrested for suspected financial misconduct last year. Ghosn denies wrongdoing.

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Volkswagen to end production of the Beetle next year

Volkswagen said on Thursday it would stop producing its Beetle compact car in 2019, ending a model that looked backward to the 1960s counterculture as the automaker prepares for a leap toward a future of mass-market electric cars.

The original VW Beetle, developed in the 1930s, made a journey from a product identified with Adolf Hitler to a symbol of Germany's rebirth as a democratic, industrial powerhouse after World War II. In the 1960s, the Beetle was a small-is-beautiful icon of the postwar baby boom generation. Volkswagen discontinued US sales of the "bug" in 1979, but continued production for Mexico and Latin America.

In the mid-1990s, at a time when Volkswagen was struggling to rekindle sales in the United States, then-Chief Executive Ferdinand Piech pushed to revive and modernize the distinctive Beetle design pioneered by his grandfather, Ferdinand Porsche. The result was a crescent-shaped car called the "New Beetle," launched in 1998, which offered playful touches such as a built-in flower vase.

The New Beetle was a hit during its early years, with sales of more than 80,000 in the United States in 1999, but recently the car's US sales have suffered along with most other small cars. Overall, VW has sold about 500,000 Beetles globally since 1998, the company said.

Volkswagen sold a total of 11,151 Beetles in the United States through the first 8 months of 2018, down 2.2 percent from the same period a year earlier. US consumers looking for a small Volkswagen vehicle overwhelmingly prefer the Jetta sedan, or a Tiguan compact sport utility vehicle. The Jetta, Tiguan and Beetle are built for North America and other markets at a factory in Mexico.

The end of the Beetle comes at a turning point for Volkswagen. The German automaker's last 3 years have been rocked by the fallout from a scandal caused by its admitted cheating on diesel emissions tests. Now, Volkswagen is gearing up to launch a wave of electric vehicles to appeal to a new generation of environmentally conscious consumers - children and grandchildren of the 1960s Beetle enthusiasts.

In a statement announcing the end of the Beetle, Hinrich Woebcken, head of Volkswagen of America, said that as the company ramps up its electrification strategy, there are no plans to replace the Beetle. However, his statement did not rule that out someday. He noted the company’s ID Buzz, a prototype for a 21st Century reincarnation of the microbus. The automaker has said it intends to put a vehicle similar to the ID Buzz into production as an electric vehicle.

The company said 2 special Beetle models will join the final lineup - Final Edition SE and Final Edition SEL - in the United States and would offer driver-assistance technology. 

source: news.abs-cbn.com

Hyundai launches new Genesis sports sedan in SUV-driven market

SEOUL - South Korea's Hyundai Motor Co will launch its first new sedan under the premium Genesis marque in Seoul on Friday, hoping to cement the brand's place in the luxury segment and make up for its lack of a strong SUV line-up.

US pop singer Gwen Stefani will perform for about 10,000 people at a gala event to launch of the G70, the third sedan to carry the Genesis name but the first to be marketed exclusively under Hyundai Motor's fledgling premium brand.

Starting from $33,000, the sporty four-door offers bang for the buck as it takes on rivals including affiliate Kia Motor's Stinger sedan and BMW's 3 series.

But analysts say the G70 will not solve Hyundai's troubles in the United States, where sports utility vehicles (SUVs) are all the rage and the two previous Genesis-branded sedans failed to take off.

"Look at Cadillac, with just one crossover, the brand is struggling in the US. It will be much the same story for Genesis until they can get a crossover to market," said Dave Sullivan, product analysis manager at US consultancy AutoPacific.

"It's not because the G70 will be a bad product ... The sedan lineup just doesn't match consumer demand."

The G70 debuts in South Korea on Friday followed by the United States next year. Hyundai has not said when it would enter China and Europe, which are dominated by German premium brands.

Hyundai's China sales tumbled more than 60 percent in the second quarter due to its lack of a strong SUV line-up and political tensions between China and South Korea over North Korea's nuclear weapons program.

In the United States, SUVs made up 35 percent of Hyundai's total US sales from January to August this year, far lower than the industry's 62 percent, according to US researcher Autodata.

CRITICAL TEST

The Genesis project is being closely watched by Hyundai Vice Chairman and heir apparent Chung Eui-sun, as he prepares to take over the world's No.5 auto group from his father, 79-year-old Chairman Chung Mong-koo.

As the first Genesis model which was not previously sold as a Hyundai, the G70 will be a key test of the two-year-old marque's ability to survive in a fiercely competitive field.

Its chief rival will be Hyundai affiliate Kia's slightly cheaper Stinger, which shares the same platform as the G70 and launched in late April. Other rivals include BMW's 3 series, Audi's A4 and Mercedes-Benz's C-class.

Hyundai has said the Genesis line-up will grow to six by 2020, with the addition of a sports coupe and two SUVs.

source: news.abs-cbn.com

New California driving laws make holding cell phones illegal

Using your cellular phone while driving is now illegal in the state of California.

Starting January 1st, 2017, it is now illegal for drivers to hold their cellphones or other electronic devices while driving in the state of California.

Regardless if you’re using your phone as a GPS or talking with the speaker to avoid putting it up to your ear can warrant a ticket.

The California Highway Patrol explains where a driver can safely place electronic devices in the car if you have to use it while driving.

“It can be mounted on the dashboard as long as it’s not blocking your view, at the same time, on the windshield. Like where your GPS would go, there’s a small part in lower right-hand corner or lower left-hand of our windshield but the main thing is that it shouldn’t obstruct your view and at the same time you’re going to be holding it with your hands,” said Officer Art Montiel.

Drivers may only use one finger to tap or swipe the screen.

The CHP said they have been keeping their eye out for drivers already violating the law.

“A lot of times when they’re texting and driving it’s very similar to when they’re under the influence. They can’t stay in the lane. They’re swerving in the lane. So that’s when we approach because they are focused on their phone and not on their surroundings…especially with a motorcycle officer those are actually easier for them to look at the driver without them knowing they are there,” he added.

Another new law directs the CHP to create motorcycle lane splitting “educational safety guidelines”. However, it makes it clear that lane splitting by motorcyclists between freeway lanes is still legal.

“Going back to common sense, don’t split lanes at 40, 50 miles per hour. Only do it when traffic is stopped or going really slow and I wouldn’t go any faster than 10 miles per hour or the speed of the other vehicles that are traveling,” Montiel said.

According to the CHP, fines depend on the counties you live in but the base fine is 20 dollars and 50 dollars for subsequent violations.

Read more on Balitang America.

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Toyota recalls 396,000 vehicles in N. America

Toyota Motor Corp. is recalling 396,000 vehicles in North America for a third time due to a suspension issue that could result in loss of control when driving.

The recall involves the Toyota RAV4 sport-utility vehicle from the 2006-2011 model years and the Lexus HS 250h sedan from the 2010 model year.

The latest action is the third time these vehicles have been the subject of a suspension-related recall, following ones in 2012 and 2013.

Toyota said rust can form on the suspension arm threads if the nuts for adjusting rear-wheel alignment were not tightened correctly. Continued rust damage could lead to the suspension arm separating from the vehicle and a loss of control.

==Kyodo

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