Hero will keep the premium Harley Davidson dream alive in India beginning at dealership level
Harley-Davidson saw a steady dip in demand in the country. Dismal performance could be blamed on its high pricing along with wrong product portfolio and marketing strategy. Harley-Davidson paid higher attention to the more expensive cruiser bikes in the country while its competitors also offered more affordable and technologically advanced lineup in varying categories.
This resulted in rival brand offerings appealing to a wider and more diverse segment of buyers in the country – and thus higher sales. For Harley, this resulted in the end of the road of their India operations.
A few weeks after shutting down the only factory in India citing poor sales and mounting losses, and part of a move to restructure, Harley Davidson announced its association with Hero MotoCorp. The two bike manufacturers have signed a non-equity partnership through which Hero MotoCorp will sell the premium range of motorcycles under the Harley Davidson banner.
This is not the first of its kind of such two wheeler tie-up. There is the BMW Motorrad-TVS partnership forged in 2013 to make mid engine premium bikes. Triumph of UK has partnered with Bajaj Auto to introduce mid-size motorcycle for India and global markets. There is also the KTM Husquvarna –Bajaj association wherein Bajaj Auto owns about 48% stake in KTM. Jawa, BSA, Yezdi and Mahindra are some of the oldest brands which are being brought to India by Classic Legends in partnership with Mahindra.
Hero – Harley Deal
Getting back to the Hero MotoCorp partnership with Harley-Davidson, the Indian giant, which is the world’s largest manufacturer of motorcycles and scooters in terms of volumes, will hold the boat steady here. Hero MotoCorp conducts its production operations via 8 manufacturing units out of which 6 are located in India while there are one each in Columbia and Bangladesh.
Only last month it was announced how transition will progress. This included the announcement of a clear future path for current Harley-Davidson India dealers by year-end. All changes comes into effect from January 1, 2021.
Since Harley’s departure in September 2020, dealers have discussed compensation packages on offer. Existing contracts expire at the end of 2020. Harley-Davidson Dealers Association is steadfast in its demand for fair-compensation for all dealers, representing all 33 Harley-Davidson outlets in India. Collectively, the brand bastions have been on a Blackfoot since Harley-Davidson announced withdrawal of independent operations in India, and announce its partnership with Hero MotoCorp.
Considering the time-bound, take it or leave it situation on offer, 10 of 33 dealer partners have accepted terms to be a part of Hero MotoCorp’s dealership network. Meanwhile, dealers continue to wait to hear from Harley-Davidson on matters pertaining to adequate compensation. The on offer new dealership contracts being held off for 23 of the 33 dealers is indicative of how the situation isn’t beneficial to anyone.
Harley Dealers Unhappy
Hero MotoCorp is absorbing only 33 percent of dealers. The remainder are treading with uncertainty in regard to dealer partner investments and future business outlook. This includes the 10 who ‘will be coerced to act without receiving any benefit’. The plight of the 23 dealers who are not being approached by Hero MotoCorp to be a part of its dealership network is unknown. The association feels ‘that providing us with a fair deal is Harley-Davidson’s undeniable responsibility towards us’.