Aermacchi & Buell

In the '60s the Japanese redefined the motorcycle market with a slew of high-quality lightweights aimed at  youthful buyers, posing a serious threat to Harley-Davidson in the process.

Since the American firm did not have the resources to quickly create new models and an expanded line, the Motor Company bought half ownership of the Italian firm Aermacchi in 1960. The venture allowed Harley-Davidson to explore previously untapped markets  with lightweight models like the Sprint and the Rapido.

Ultimately, Aermacchi Harley-Davidson was simply unable to keep up with the rapid technical development of the Japanese brands, and in 1978 Harley-Davidson sold its Italian interests to Cagiva. With the divestiture of Aermacchi, Harley-Davidson made the strategic decision to focus strictly on the heavyweight motorcycle market.

The sale of Aermacchi did not mark the end of Harley's experimentation with sportbikes, however.

Erik Buell, a former employee of the Harley-Davidson Motor Company, began to build his own motorcycles in 1982, starting first with an imported British two-stroke road racing engine, then changing to Harley-Davidson XR1000 and 1200cc Evolution Sportster engines.

Recognizing Buell's potential as a skunk works to test new ideas and explore new areas of market expansion, Harley-Davidson began to acquire an ownership stake in Buell during the 1990s, eventually acquiring 98 percent of the company by 1998.

Harley-Davidson's investment in Buell and the development of the all-new V-Rod engine seem to be sure indications that the tradition-bound Motor Company is willing to position itself for a future that may rely more on engineering than on tradition.

Next: A Tribute to Dealers