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| Harley entered the market a decade ago, but managed to sell only 27,000 bikes |
Source: Business Standard
Under the agreement Hero Motocorp will produce and handle distribution and after-sales for Harley products
Hero MotoCorp, the largest two-wheeler manufacturer in India, will produce and distribute Harley-Davidson motorcycles in the country after the US-based firm last month discontinued its sales and manufacturing operations here. The move is part of its global restructuring initiative, under which it is planning to exit the markets where the volumes and profitability have been elusive. The agreement to produce, sell, and service motorcycles manufactured by the US company marks Hero MotoCorp’s entry into the super-premium 300-600 cc segment.
Hero, despite having a 36 per cent share of the two-wheeler market, has largely remained a commuter-based, volume-drawing manufacturer with affordable price tags. “…. Hero MotoCorp will sell and service Harley-Davidson motorcycles, and sell Parts & Accessories and General Merchandise riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero’s existing dealership network in India,” Hero said in a statement.
UK-based Triumph Motorcycles, Harley’s rival in the 500-cc and above segment, has a non-equity partnership with Hero’s immediate competitor Bajaj Auto. Under the deal, it manufactures at Bajaj’s Chakan factory. Bajaj also handles the distribution for Triumph. Hero’s another rival, Honda Motorcycle and Scooter India, (HMSI), the country’s second-largest two-wheeler manufacturer, had recently announced its entry into the middle-weight motorcycle segment — 300 cc and above — with the launch of the Highness CB 350. The company's latest offer will compete with market leader Royal Enfield’s Classic 350 and other products in the segment.
Industry executives say the premium segment of two-wheelers is becoming popular among Indian customers. According to the data of Society of Indian Automobile Manufacturers, motorcycles in the 251-500cc category peaked at 833,112 units in FY18. The volumes declined to 658,924 units in FY20, as economic slowdown hit sales in the country. “The motorcycling community in India is growing day by day and they are a set of customers who look for more premium products and need a personalised approach. We will have an exclusive portfolio for them,” Yadvinder Singh Guleria, director, sales and marketing, HMSI, recently said, adding that Honda would launch three more products in the segment.
An industry executive said: “Hero’s prowess in distribution and sales will help Harley to increase its reach across the country. In return Hero will get technology transfer and access to some of Harley’s international markets. It’s a win-win deal for both.” Harley entered the Indian market a decade ago, but has so far managed to sell only 27,000 bikes, barely half of what the country’s segment leader, Royal Enfield, sells in a month. In the first quarter of this financial year, it sold only 100 motorcycles and in the whole of last financial year, it was 2,470 units, dropping from 4,708 units in 2015-16. The Milwaukee-based motorcycle manufacturer has been scrambling for years to grow sales beyond baby boomers in the US and has not posted retail sales growth there in the past 14 quarters. Chief Executive Officer Jochen Zeitz, who took the reins at the company in February, unveiled a major “Rewire” in July to boost profits by reducing Harley’s product portfolio by 30 per cent and investing in 50 markets with growth potential in North America, Europe, and parts of the Asia-Pacific.
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