This Korean cruiser is Harley’s future

Dailies -

By

ATK-Cruiser

Believe it or not, but today’s pot-bellied pirates didn’t get their start on the gigantic chrome vibrators they now ride. Instead, they learned on, gasp, foreign-made, small-capacity bikes that had a wide range of abilities and appeal outside Harley’s existing customers. Hoping to recreate the ability and appeal of those original Aermacchis, Utah-based ATK is planning to serve Harley dealers with the small-capacity, affordable entry-level machine’s they’re begging for, giving those dealers a way to bring new blood into their showrooms, hopefully hooking new riders for life. ATK wants to be the Scion to Harley’s Toyota and these 250-680cc re-badged Hyosungs are the first in a new range of products for sale at a number of Harley’s dealers.

We’ve previously discussed the disturbing departure between the average age of Harley’s customers increasing at a rate faster than aging (it’s now 49-years-old, up seven years in the last five) and The Motor Company trying to convince its shareholders that their model range actually holds some youth appeal. At the current rate, Harley’s core demographic will age out of riding, or at least buying large numbers of new bikes, in about 10 years. We’re not the only ones to notice this; back in July, pressure from dealers for an entry-level product forced Harley to declare that it would start developing just such a product. The problem is, it won’t reach the market for at least three years.

Enter ATK, which has a range of small and mid-capacity motorcycles virtually ready to go and deals with a number of Harley dealers that want to sell them.

Don’t be too put off by the fact that the bike pictured here is merely a re-badged Hyosung Aquila, itself a worthy cruiser, but hardly a revolutionary new bike capable of transforming a new generation into lifetime riders. These first products are merely unsold stock, left over after Hyosung tried to sell an unknown Korean brand through tiny, out-of-the-way dealers. In 2012, ATK plans to commence final assembly of a new range of bikes in Utah using Korean-made parts. Assembly in Utah will hopefully give the bikes American quality, while Korean components will give them import prices. Its deal with S&T Motors (formerly Hyosung), gives ATK access to an existing range of 250-680cc standards, cruisers and even sportsbikes, but the Utah company also plans to enlist top American design talent to develop new models specifically tailored to the youth market here. Skewing even younger, they also hope to sell mini dirtbikes, literally adopting a drug-dealers’ business model; hooking them young and keeping them for life.

They key to all this and the thing that separates ATK from the Japanese competition is that ATK holds the keys to much of Harley’s distribution network through relationships with key dealers. Some of the largest motorcycle dealers in the country will now be equipped to reach a sub-Harley market or even address the needs of current customers with easier bikes to learn on.

The bike you see here, the ATK 700 Cruiser, is a 680cc, 65bhp, 46lb/ft, 495lbs, liquid-cooled v-twin cruiser that’ll retail for $6,995. There’s also a 250cc version that looks almost identical, but weighs just 388lbs and will retail for under $4,000.

So why hasn’t Harley stepped in to fill this market gap itself? Its insistence on developing its own motorcycles, in America, top-to-bottom is a huge handicap. That HD learner bike? Well that’s costing them $60 million and taking three years to develop. That’s money the company can ill-afford to spend when it’s repaying Warren Buffet for a $900 million loan at 15 percent interest, which is actually part of nearly $2 billion in total loans Harley’s had to take out in the last year or so simply to keep itself alive. Remember, all this financial woe is relatively recent, Harley was still generating record profits in 2006 and it appears the company’s management was simply unable to foresee a time when using sub-prime loans to sell expensive, unnecessary, trend-dependent lifestyle accessories to people who didn’t need them and couldn’t afford them would cease to turn profits. The first suggestion that Harley even recognizes a need to pursue a non-boomer audience comes with this $60 million learner bike.

Meanwhile, the market is ripe for a quick-moving startup to give Harley dealers the bikes they need to survive the current economic climate while equipping them with the tools to develop and grow a new audience capable of seeing them through decades to come. You get the feeling that even while ATK is throwing its dealers a potential lifeline, Harley is doing everything it can to prevent the success of what it sees as a future rival to its business. Each and every communication from ATK carries the following language, “Neither Harley-Davidson Motor Company, Inc. nor its affiliates endorse or support ATK in any way.”

If ATK is able to deliver the affordable, appealing small and mid-capacity bikes it’s promising and Harley dealers are able to profit from them, then a bunch of executives in Milwaukee are going to look pretty silly.

  • slowtire

    Wes,if a Harley dealership is allowed to sell these things, than why wouldn’t they take on Honda or Yamaha or other established brands that have small and mid capacity bikes in their line-ups?

    • pauljones

      Why would Yamaha or Honda want to be associated with Harley? I’m not asking this as a slight against Harley, but Honda and Yamaha both make great bikes of their own that compete in the same market as Harley.

      • slowtire

        Good point and I think you’re right. However, I can’t see these things selling to well when you could buy something similar from Honda, Yamaha, etc. for a little bit more money. If these things are junk, they could actually turn people off from mototrcycling. But then again, look at the market share Hyundai now has. Should be interesting!

        • pauljones

          They actually aren’t bad little bikes; they’re certainly no worse than anything else in their class. They Hyosung Aquila has even gotten positive reviews in a couple of motorcycle magazine. As long as they can undercut the others on price, even if it’s just two hundred dollars, they ought to move decently.

          • slowtire

            Alright Paul, give it up. You work for ATK, right?

        • pauljones

          Ha! I wish I worked for a motorcycle manufacturer.

          I rode a Hyosung GV250 at my MSF course, back-to-back-to-back with a Honda Rebel and a Suzuki GZ250. It didn’t seem any worse to me than the others.

          • slowtire

            Well, like I said, it’ll be interesting to see what happens.

        • danger

          Word on the street is that Paul is right. Generally people with Hyosungs have given good reviews — the main issue in the US was parts availability and dealer network etc.

          I heard Hyosung actually is a OEM manufacturer for one of the bigger motorocycle companies as well.

    • http://hellforleathermagazine.com Wes Siler

      I’m not terribly knowledgeable of dealer/manufacturer contractual relationships, but my limited understanding is that manufacturers can’t legally dictate that a dealer not carry other brands, but they can create very complicated relationships that discourage that. In the case of a dealer carrying both Japanese bikes and Harley, I’d imagine pressure not to do so would come from both sides, making such an arrangement uncommon.

      This is a case of a group of very powerful dealers essentially saying “fuck you” to Harley and pushing back, the dealers need new customers just as badly as the mothership does and unlike the MBAs in Milwaukee, they’re being proactive about it.

  • robotribe

    “ATK”?

    Branding–or should I say, “re-branding”–plays a huge role in their success, IMO.”ATK” sounds like a manufacturing or pharmaceutical acronym. For example, to the uninformed, “Benneli” looks and sounds just as authentically Italian as “Ducati”. ATK (as well as Hyosung) could benefit from a little “uh-Mehrkinization” of their brand if they want their product to not look like also-rans right out of the gate; “Eagle”, “Patriot”, or “Shotgun” are some names that come to mind. Maybe they can buy a name from one of the many ill-fated custom chopper brands.

    That aside, this whole affair reminds me of the run-up in fuel prices three years ago that led to some HD dealers also becoming scooter dealerships overnight. Perhaps this ATK option is a better fit.

    • lucky jim

      Agreed. That’s just the name of the parent company that is trying to make the business deal… I have no doubt there will be some re-branding going on. Hell they could simply call them “Attack” or something, and their name is still in there. :)

      That said, I don’t understand your example. Benelli IS an authentic Italian motorcycle company. They were just bought out by the Chinese.

      • robotribe

        Good point. I referenced Benelli as an “Italian” company in as much as MINI is “British” though owned by BMW.

  • DD

    Harley is over. They should have bought out this guy http://www.mac-motorcycles.com/motor.html and I would have waited in line to buy one. Harley already has an entry level bike called a sportster. The company just doesn’t evolve, so it will die.

    • pauljones

      The Sportster is the entry-level Harley, but it’s hardly an entry-level bike. Even 883cc is still pretty big. That’s where the ATK bikes will come in until Harley at last finishes its own in-house attempt at a bike in this market.

      Allowing this would be a smart move for Harley; the Hyosungs are fine little bikes that suffer from a lack of a real dealership network. It will drive more traffic into Harley showrooms, and thus leading to greater exposure to potential buyers. Even if they buy a little ATK to learn on for a while, chances are that if they have a good dealership experience, they’ll come back and shop for their next bike at the exact same place.

  • contender

    Capable or not, Hyosung bikes sure look cheap. No. Thanks.

  • http://www.thisblueheaven.com Mark D

    I don’t see this working out at all. If some is in the market for a motorcycle, and only wants a Harley, why would they instead get an “ATK” made from Korean-sourced parts? By essentially refusing to compete with the rest of the motorcycling industry, Harley has isolated itself to the point where anybody going in a dealership wants a Harley, and nothing else.

    If a person is sensible enough to know that an 883 Sportster is not the best beginner bike in the first place, they probably won’t even make it into a Harley dealership. Only a bike branded as a Harley (whether designed by them or not), can help them attract younger riders.

  • Rooster

    I wonder how long it will be before these small displacement bikes from Hyosung outperform the ancient Harley motors and get dropped for making them look bad?

    • http://www.thisblueheaven.com Mark D

      Sportster 883: 53 hp, 48.5 lb/ft, 583. I’d say the Koreans have already beaten that! 12 more hp and 100 lbs less will do that.

      • DD

        LOL! Great stuff! Now, which is the beginner bike?

  • jamesat49

    This Harley soap opera is getting confusing. Ditch Buell, then hawk Korean cruisers? Pure genius.

    • DougD

      By my understanding, ATK is trying to go in the back door to H-D dealerships—ATK has no formal arrangement with H-D, and, most likely, H-D views ATK as dastardly interloper.

      Right Wes?

      • http://hellforleathermagazine.com Wes Siler

        Pretty much. But remember that the dealers want this.

  • Nepenthe

    Three years to develop an entry-level product, very nice! Isn’t it just a Sportster with a Blast! engine? Or a simple reverse-engineered Virago 250 and Virago 535? What’s so hard about that?

    Anyway, I thought Hyosung should try to get in bed with Hyundai and Kia — imagine Hyosung bikes being sold in a corner of Hyundai dealerships.

    I’m guessing no Harley dealers will be selling the GT650R, which is like a 20% off SV650SF.

  • DougD


    Its insistence on developing its own motorcycles, in America, top-to-bottom is a huge handicap.

    C’mon, Wes, you’re gonna bash a company that takes pride in manufacturing primarily in America? Criticizing their choice in motorcycle model sizes is certainly warranted, but why are they deducted more points for manufacturing in America?

    They made $1 billion in a 2006 quarter … surely it’s possible to figure out how to build mid-size cruisers in America and make a profit.

    • http://hellforleathermagazine.com Wes Siler

      I’ll bash a company for failing to have a grasp on reality. They’ll never be able to compete with the ninja 250 on price/performance/speed/quality/everything to price ratio with 100% American manufacture. What’s more important: a company that beats a patriotic drum into failure or a profitable, sustainable American company.

      You really have to question the quality of their decision making when they turned that $1 billion quarterly profit into avoiding bankruptcy by the skin of their teeth just 2 years later.

  • CG

    Well, the English mags haven’t been real impressed with the Hyosungs, especially in regards to the quality. Perhaps, like Hyundai, a long warranty will suffice until quality catches up? A Harley salesman selling Korean bikes? Gotta be real hungry that month… 3 years to build a 650cc bike? That tells you that when they tore down some 650cc cheap Japanese bikes that the engineering scared them to death. Given how much (money and time) GM has spent to finally come up with a 4 cylinder motor to match Honda and Toyota might give you some idea of the challenges that HD face. (And the Ecotech still isn’t as smooth, billions later.) Plus they don’t have Ducati’s race engineering to steal from (Hi there Mr. 1200cc programmable quasi do-everything bike!).

  • JeffNY

    Trying to link to this page, but html editors don’t seem to like the special apostrophe in “harley’s”, they keep changing the link …can you guys use a simple apostrophe like “‘”?? hehe

  • DoctorNine

    I’ve said it before: the entry level Harley is an Enfield.
    If they want to figure this out, they have to read history.

  • dante

    “Assembly in Utah will hopefully give the bikes American quality, while Korean components will give them import prices.”

    American quality? When it comes to reliability almost everybody in their right mind would choose a Korean car or motorcycle over an American one.

    I have yet to find bad reviews of the Hyosungs. The proportion of positive reviews seems to be pretty close to 100%. I’ve already read on the other hand lots of bad reviews of Harleys, lots of stories about new bikes that didn’t work properly from the very beginning, countless repairs, and outrageous repair costs.

    Hyosung produced many motorcycles for Suzuki in the past, and I doubt whether anyone would doubt the quality of a Suzuki motorcycle.

    “Its deal with S&T Motors (formerly Hyosung)…”

    S&T Motors is the company name of the manufacturer, Hyosung is the brand name of the motorcycles.