Youth Must Be Revved

Close to half a million bikers will pour into Sturgis, S. Dak, this week for the annual motorcycle rally, revving their hogs to a deafening pitch and baring their Harley-Davidson tattoos for all to see. But no matter how much leather they don, most will have a hard time looking tough. There will probably be far more aging white-collar baby boomers trying to recapture their imaginary rebellious youth than Hell's Angels flaunting it. The average age of a Harley devotee is now 45, up from 37 a decade ago; 20% are over 55.

That is why the nearly century-old American industrial icon has so much riding on the V-Rod, the sleek, radically new bike it will unveil at this year's gathering. Even though the company, based in Milwaukee, Wis., is firing on all cylinders, it could be headed for a nasty spill if it doesn't navigate this generational speed bump. Despite its powerful brand, Harley has failed to attract enough young riders, who prefer the speedy, more technically advanced machines from Asian powers like Honda and Yamaha and European rivals BMW and Ducati. While it still leads the pack when it comes to the heavyweight cruisers favored by Mom and Dad--they're cute on their big bikes, aren't they?--Harley is no longer the No. l seller in the U.S., having been overtaken by Honda last year.

The V-Rod, the company's first completely new model in a half-century, aims to change all that. "This is the first departure from their traditional customer base," says Don Brown, a motorcycle consultant with DJB Associates. And it shows. With its aerodynamic look, clamshell-style instrument panel and unpainted aluminum-and-steel frame, the long, low-slung V-Rod lives up to its billing as Harley's first "performance custom" motorcycle--although a pricey one at around $17,000. (A classic hog goes for $10,000 to $15,000.) It features a 115-hp engine, designed with help from Porsche, that claims a top speed of 140 m.p.h.--without the trademark earth-rumbling noise. "We wanted to make our own statement," says Willie G. Davidson, 68, the head designer.

Harley is still boss on Wall Street, blowing past expectations with record second-quarter profits that rose 28% from a year ago; in roughly the same period, its stock has gained nearly 50%, closing last week at $52. While other manufacturers downsize, Harley plans to spend $145 million on a massive expansion of its plant in York, Pa. The company offers classes at dealerships to lure younger, less experienced riders, especially women. In the past year, its sports-bike subsidiary, Buell, rolled out the Blast, an affordable lightweight motorcycle ($4,395) targeted expressly at beginners, with easy handling and a single-cylinder engine.

Sales in the industry are riding ahead of the braking economy, up 3% in the first six months, though nothing like the torrid 20% pace of the past few years. Harley hopes to sell 11,000 V-Rods, which will be available this fall, by the end of this year. That's about 5% of its total annual output. Still, Harley is by no means guaranteed a smooth ride. The V-Rod is a few thousand dollars more expensive than comparable bikes like Honda's hot-selling VTX. And expanding beyond the core franchise is never easy, as Harley learned in the 1970s, when the company's owner at the time, AMF, blanketed the market with poorly designed clunkers.

But given the company's cult following, demand shouldn't be a problem. Managing that demand so that people invariably have to wait three to 12 months to get their prized possession has always contributed to the Harley mystique. CEO Jeffrey Bleustein says he's No. 38 on the waiting list for a V-Rod at his local dealership. And for more than three years, riders have been sending Bleustein money as a deposit for a special centennial-edition model in 2003. There's only one hitch: Harley hasn't even announced such a celebratory bike yet. Bleustein can only hope that the V-Rod gets the next generation of bikers to finally follow their parents' lead.