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Finding the right partner for Harley in India

Murali Gopalan | Updated on April 30, 2020

Perhaps a surprise will emerge in the form of a Japanese brand

Think of an iconic motorcycle brand and Harley Davidson is generally on top-of-recall. There was a time when it was the monarch of all it surveyed, especially in the US, its home market, but things have changed dramatically since.

Today, Harley is no longer the formidable entity that it used to be with its leadership team keen on finding new riders overseas. The loyal Harley commuter in the US is a fast diminishing community and the company is naturally keen to target a new generation of buyers in Asia and Europe.

Naturally, this is not going to be easy since this will mean carving up a competitive cost structure that can help woo riders in these price-sensitive markets. This is what prompted Harley to conceive of the Street 500 and 750 as new motorcycle options in these markets but they did not quite live up to expectations.

US President Donald Trump has constantly brought up the Harley example in his tirade against tariffs, especially in India. While there is no disputing the high levy, it is not as if this has been the singular obstacle to Harley in this part of the world.

The company has constantly been found wanting in after-sales service and customer support even while there is a diehard loyal riding community in India that swears by the Harley brand. The resurgent Asia plan involves rolling out competitively priced midsize bikes and Harley recently announced a tie-up with China’s QJ group to make 350cc motorcycles.

This plan will, however, not extend to India, where the American motorcycle maker is still keen on finding a local partner to take the story forward. This will mean scouting for someone who brings to the table economies of scale and the most likely candidate seems Hero MotorCorp, which has long parted ways with Honda and would be open to a new ally.

All this still remains in the speculative domain even while it is near certain that a Harley-Royal Enfield partnership is unlikely given that neither will benefit from the deal largely on issues of commonality.

Perhaps, Harley will pull out a rabbit from the hat and go in for an unconventional alliance with a Japanese two-wheeler maker for India and ASEAN. This would mean choosing from Suzuki, Honda and Yamaha or even a long shot like Kawasaki. It also remains to be seen if the US will take kindly to Harley’s partnership with the QJ group given the growing animosity against China in the ongoing pandemic. The administration has made its distaste of China quite clear and, assuming he returns to power later this year, Trump is quite likely to prevail upon Harley to call this off.

Published on April 30, 2020

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