American premium motorcycle manufacturer Harley-Davidson has joined hands with India’s largest two-wheeler brand Hero MotoCorp. The two iconic brands will ride together in the Indian domestic market.
As the Harley-Davidson and Hero MotoCorp have announced, the latter will sell and service Harley-Davidson motorcycles, as per a distribution agreement. It will also sell parts and accessories and general merchandise riding gear and apparel. For these, Hero MotoCorp will use a network of brand-exclusive Harley-Davidson dealers and the homegrown two-wheeler major’s existing dealership network in the country.
Also, as part of the licensing agreement, Hero MotoCorp will develop and sell a range of premium motorcycles that will use the Harley-Davidson badge. As the two brands claim, these moves come in line of Harley-Davidson’s business overhaul, christened as The Rewire.
In September 2020, Harley-Davidson called quit in India. The American motorcycle manufacturer that was targeting to sell 10,000 units annually in India, struggled to sell even a quarter of that target in FY20. Despite the low sales, the economic crisis and Coronavirus pandemic too hit the company hard along with the rest of the industry.
Besides that, the high import duty too has been another reason behind the quit decision of Harley, even after US President Donald Trump persuaded the Indian government to reduce the taxes on the Harley motorcycles.
Apart from that, lack of clear demand outlook was another reason behind the exit call of the company. The Coronavirus pandemic has pushed back the country’s two-wheeler demand by 2-3 years. Especially, the premium two-wheeler segment has been hit harder due to the pandemic and related economic woes.
In August 2020, rating agency ICRA revised the sales forecast for two-wheelers in India downwards. As it predicted, the Indian two-wheeler market would decline by 16%-18% to around 1.7 crore units in FY2021.
Meanwhile, with this agreement between the two iconic two-wheeler majors, both the companies and riders in India are expected to be benefited. While Hero MotoCorp, the largest motorcycle and scooter manufacturer in India will be at the same level of TVS Motor Company and Bajaj Auto that have respective premium motorcycle range. Also, there would technical upgradation across the range of Hero MotoCorp motorcycle and scooter range.
On the other hand, Harley-Davidson will benefit from the agreement with the strong distribution network and customer service of Hero MotoCorp.
According to the industry experts, this agreement with Harley-Davidson is exactly what Hero MotoCorp needed to create a major disruption in the lucrative premium motorcycle segment in India, the world’s largest two-wheeler market.
Hero MotoCorp has been working on a high-capacity product platform at its R&D centres at Jaipur in India and at Munich in Germany for quite some time. This partnership with Harley-Davidson will help Hero MotoCorp to expedite this process.