Harley-Davidson ties up with Hero MotoCorp For Indian Market

Harley Davidson Motorcycles

Harley Davidson is an American motorcycle manufacturer founded in 1903 .

          Founder : William S. Harley & Arthur Davidson 

CEO       : Jochen Zeitz 

HQ : Milwaukee, Wisconsin, U.S

 Company takes into origin when founder decided to build their first 116CC Pedal Assistant Motor Bicycle in 1901 and work on this was completed in 1903.

How Harley came to India

 

India and US swap deal in 2007, where India will get access of American Market for Indian Mangoes in return for Harley Davidson's entry into Indian Market primarily for Bikes with engine capacity of 800CCor above if they comply with Euro-III emission norms. 

             Harley entered India in 2009 after agreement between Washington & New Delhi.

During 2016-17, India exported 50,000 tones of mangoes valued at Rs. 420.36 crore worldwide where roughly 600-1000 tonnes were exported to USA. And profit from is margely low as because of distance and required special ships to export. Shipment price is way too high for Indian farmers. US tariff were to there on mangoes and no proper mechanism to directly export to US without much hurdles were in order from US side. So India could not avail proper benefit from US market. 

Heavy Tariffs on Import of Harley-Davidson in India

  India from beginning imposed heavy tariff on Harley Davidson's Bikes. When US import bikes to India the tariffs was almost one hundred percent. The type of bike Harley manufacture are very expensive & since India government had imposed even more taxes under GST & other import taxes Harley became more expensive in India. 

Due to US President Donald Trump request India reduces the tariff to 50% from around 100% earlier but was still not sufficient under GST regime. And because of other taxes as well Harley was not able to compete to Honda, Royal Enfield or Hero. 

What happened 

Earlier the news was that Harley Davidson will discontinue sales and manufacturing operations in India & will layoff about 70% employees there. And this decision came weeks after Toyota MotoCorp said it won't expand further in India due to country's high tax regime. There target was to sell 10,000 units annually but in these 11 years since 2009 they could only sell only 25,000 units.

Now on 27 October 2020, Harley Davidson announced that they would hand over sales, service & distribution of its products to Delhi based Hero MotoCorp. 

Hero will take care of sales of parts, accessories, general merchandise, riding gear and apparels of Harley Davidson. Allowing Hero to develop and sell range of premium motorcycles under the Harley Davidson brand name.

  (IT'S AN NON EQUITY TIE-UP THAT DOES NOT INVOLVE          TRANSFER OF TECHNOLOGY FROM HARLEY DAVIDSON)

As per Jochen Zeitz, chariman, president & CEO, Harley Davidson they are exiting about 40 markets where low volumes and little profit don not warrant investment. And establishing dealer-direct or distribution model in about 17 markets. 

(This agreement is going to help both while Harley bikes will still have its presence in world largest market of two Wheeler and on other side helping Hero MotoCorp to capture premium brand market)