The dream bike of many young Indians is shutting its shop in India. This move was rather seen as an inevitable by many experts.
While Harley did manage to create an aura around cruisers and leisure riding, the move ended up helping local brand Royal Enfield more that saw a massive growth in demand. Enfield often seen as "India’s Harley" by the middle class has been on a roll over the past few years and plans to become the world’s biggest mid-engine motorcycle maker across the world
Below are some of the key points on why it is closing down its operations and what is in store for this cult motorcycle manufacturer?
Tax Structure:
Even President Trump has often raked up the issue of "high" import duty that Harley bikes faced in India and he even called it "unfair", even taking it up with Prime Minister Narendra Modi. Trump’s complaints had led the Centre to reduce the duty on Harley motorcycles from 100% to 50%, though the US government still remained unsatisfied.
Harley’s exit from manufacturing in India may be a dampener for India’s trade discussions with the US, as the latter may continue to blame the import duty structure.
India not a market for big bikes?
On paper, India is one of the biggest two-wheeler markets in the world. More than 17 million two-wheelers were sold in the market last fiscal, more than anywhere else in the world. Yet, it is a market not for big burly and noisy leisure bikes in which Harley excels, but for puny commuter machines meant for intra city runabouts that cost less, are easy to maintain and dirt cheap to run.
Over 90 per cent of them are motorcycles, scooters and mopeds with engine capacity of less than 150cc. Volumes in the super bike category with engines bigger than 500cc and where Harley operates, are restricted to just a shade over 25,000 units per annum. Quite simply, Harley isn't meant for India.
Price:
The smallest and most affordable Harley motorcycle in India is the 750cc Street 750 that costs Rs 4.7 lakh. Harley offers more than a dozen bikes in India with price going upwards to half a crore. This kind of pricing even with attractive finance options, puts a Harley out of the reach of most Indians. What did not help matters was the company's delay in bringing out smaller displacement and more affordable bikes for emerging markets like India. Neither did it have options like off-roaders, which Triumph and KTM have, or out an out sports bikes like BMW.
Royal Enfield:
In India, Harley Davidson found a fierce challenger in the Royal Enfield and by all means it came up short against the local rival. In fact, the growth of Enfield in the last 10 years suggests that entry of Harley only helped it.
Customers checked out a Harley and drooled over them but ended up buying the more affordable, lighter and easy to maintain Enfield.
During this time, Enfield brought out newer models like the Himalayan off-roader. More recently, it charted into Harley territory directly with the twin cylinder 650cc Interceptor twins.
Lack of an Indian Partner:
If you can't beat the competition at least join with them. This might be the trick that Harley missed completely. KTM and Triumph did it with Bajaj Auto. BMW did it with TVS. Harley remained in glorious isolation.
The result is there for all to see. Though there were widespread rumours of a potential tie-up with India's largest two-wheeler maker Hero MotoCorp, the companies never admitted nor refuted such claims.
Not Suitable for Indian Roads:
Another big reason why Harley could not sell in India in numbers it thought it should was many customers felt its suspension and chassis had not been tuned enough for India's pothole ridden roads. Faulty brakes and burnt clutch plates are the most obvious problems and repairing or replacing them are no mean tasks either. Social media sites are replete with customers narrating their horrid experiences-parts not available with dealers for weeks on end, high cost of service or recurring malfunctions. On numerous occasions, Harley had to also issue recalls to fix those problems. This did the credibility of the company no good. The perception that went around was that the bikes aren't equipped to handle the rough and tumble of Indian roads.
Customers will surely expect a no hassle ownership when they are buying a bike for Rs 10 lakh and above. This surely didn’t go down well with the Indian customers
End of the Road:
All in all the U.S cult bike manufacturer has sold only has sold only a little over 27,000 units in the last 10 years while the country’s-segment leader Royal Enfield sells double of that every month. Last fiscal, it sold a mere 2,470 units and only about 100 motorcycles in the first quarter of this fiscal
To stay afloat, Harley Davidson is planning to trim its product portfolio by a third and shrink its global footprint to 50-odd profitable markets
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PK,
PK Enterprises.
