Harley-Davidson Inc.'s Chief Executive Matt Levatich resigned Friday, leaving the motorcycle maker after years of declining sales and limited success attracting younger riders to its iconic brand.
Harley's board said Friday that director Jochen Zeitz would serve as acting CEO and board chairman as it looks for a permanent chief executive. Mr. Zeitz will remain chairman when a new chief executive is hired, the company said.
"We will look to new leadership to recharge our business," said Mr. Zeitz, a director since 2007 who replaced Michael Cave as chairman.
Harley remains the top U.S. motorcycle maker, but its annual domestic sales have fallen for five straight years--the entirety of Mr. Levatich's tenure since taking the top job in 2015.
Harley's motorcycle sales in the U.S. fell 5.2% in 2019, amid prolonged weakness in demand for the big, expensive touring bikes that make up the core of its model line. The company's loyal base of baby boomer customers, who drove a Harley revival during the 1980s and 1990s, is aging and purchasing fewer new motorcycles.
The company has struggled to attract younger customers to take their place. Efforts to woo new riders have included ridership classes, a fleet of smaller, cheaper bikes and Harley's first electric motorcycle. Deliveries of the electric vehicle, the LiveWire, were briefly halted last year because of a problem with its charger.
"I am proud of what we have achieved during my time as CEO, in one of the most challenging periods in our history," Mr. Levatich said in a statement.
Shares in the Milwaukee-based company rose 5% to $31.99 after hours.
Mr. Levatich, who joined the company in 1994 and served as chief operating officer from 2009 through 2015, set a goal as CEO to attract 2 million new riders over 10 years. He signed off on dozens of new models for both the U.S. and foreign markets where Harley sees growth opportunities. But those models are just reaching the market now and face tough competition from entrenched brands. Measuring progress toward the ridership goal was difficult and created tension between Harley managers and its dealers and investors.
Dealers complained the learn-to-ride classes were costly and didn't yield enough new motorcycle buyers. Mr. Levatich's relationship with the company's independent dealers had grown increasingly frayed as successive waves of new models, engines and other attempts to revive sales fizzled.
Mr. Levatich turned repeatedly to cost reductions to offset declining sales. The company closed its Kansas City, Mo., assembly plant in 2019 and initiated multiple rounds of layoffs and voluntary buyouts for employees.
The company has expanded output of motorcycles overseas hoping to find more customers, particularly in Asia. But the smaller motorcycles aimed at those markets are also less expensive than the "Hogs" that Harley relies on in the U.S., weighing on the company's sales revenue overall.
Harley aggressively pursued foreign sales during Mr. Levatich's tenure. He set a goal of selling half of Harley motorcycles overseas. Last year, 42% of Harley's sales volume was outside of the U.S.
The company has shifted some production overseas as well, attracting the ire of President Trump in 2018 when the company revealed it planned to shift production of motorcycles for the European Union offshore to avoid an EU tariff on American motorcycles in retaliation for U.S. duties on European steel imports.
"A Harley-Davidson should never be built in another country-never!" the president tweeted at the time in reaction to Harley's move.
Mr. Zeitz's professional background is in sporting goods and lifestyle products. He served as chairman and chief executive of Puma SE from 1993 to 2011, where he led a turnaround of the company when it was near bankruptcy.
