Harley-Davidson to begin selling motorcycles in India

Posted Jan 9, 2010 by Steven Z.K. Nickels
Harley-Davidson motorcycle company announced recently at the India Auto Expo that it will enter the Indian market in 2010 with motorcycles from five of the company's models, in hopes of cashing in on the world's second-fastest growing economy.
The iconic U.S. motorcycle manufacturer, Harley-Davidson (HD) announced January 5, at the India Auto Expo in New Dehli, that it will introduce twelve HD motorcycles from five model lines in India.Sales will begin with bookings in April and deliveries to start in June 2010. The models represented will be the Sportster, Dyna, VRSC, Softtail and Touring bikes. The price for the motorcycles, according to the Hindustantimes, will range from (Indian rupees) INR 6,95,000 ($15,175) to INR 34,95,000 ($76,310).
For now, Hindustantimes said five HD dealers will be established to sell the motorcycles with plans for 20 dealers in India over the next five years. The dealers announced will be located in Delhi, Mumbai, Bangalore, Hyderabab and Chandigarh. The motorcycles will range in size from 883 cubic centimetres (cc) to 1,500 cc.
Motorcycle transportation is extremely popular in India but most of the bikes sold are used more for utilitarian purposes as opposed to the pleasure-riding crowd Harley-Davidson normally attracts. The Wall Street Journal (WSJ) reported that over three-quarters of the motorcycles sold in India are 125 cc or smaller. The least expensive bikes are usually 100 cc models which cost about INR 30,000 ($655).
Harley-Davidson also announced an agreement, according to the WSJ, with ICICI, India's second largest bank (by assets) for Indians who wish to finance the HD cycles. ICICI has agreed to finance up to 85 percent of the retail price for up to five years with an interest rate of 11 percent.
With an annual gross domestic product (GDP) of only $2,900 per person, the market for HD's higher-end motorcycles may be a tough sell, at least in the beginning. They do not give any sales projections for 2010, likely a sign that they are more interested in getting a foothold in the world's second-fastest growing economy, which is growing at a sizzling 7.5 percent, than making money in the beginning.
Other high-end transportation companies are banking on the growing disposable income of mostly young Indians as well. The WSJ said automakers BMW, Audi and Mercedes-Benz have introduced luxury models to India's market. And other motorcycle makes are not sitting still either as Honda, Suzuki, Kawasaki, Yamaha and Ducati all have a presence in the country and are beginning to offer some of their higher-end models.
Harley-Davidson seems to be making a good strategic move with its entry into the Indian market. The economic recession has made for lean times for the company, which according to WSJ, has seen sales drop globally about 21% last year and 24 percent in the U.S.
Harley-Davidson sells its motorcycles in over 70 countries around the world but still sells over 70 percent in the United States. The company began building motorcycles in 1903 and was incorporated in 1907 in Milwaukee, Wisconsin, where it is still headquartered.