NEW DELHI: After shutting down its only factory in India last month due to poor, loss-making operations, cult American bike maker Harley-Davidson has decided to partner local heavyweight Hero MotoCorp to run its business in the country. It has opted for a model that has already been adopted by other global players such as BMW, KTM and Triumph.
In February this year, Hero Moto chairman Pawan Munjal had expressed his intention of partnering Harley (founded in 1903 in Milwaukee, Wisconsin) when he told TOI, “If they want to (enter into a partnership), then why not? Sure… I am open to the right kind of match… The sooner it happens, it’s good for everyone.”
Harley and Hero said on Tuesday that they have signed a non-equity agreement to ride together, which will see the Indian partner develop and manufacture mid-sized engine bikes for Harley in India, apart from taking care of sales and service of its existing bikes as well as merchandise.
TOI had first reported about Harley’s plans to scale down its India business in its edition dated August 6 this year, while also reporting about partnership plans with Hero Moto in the February 19 and September 8 and September 24 editions.
“This arrangement is mutually-beneficial for both companies and riders in India, as it brings together the iconic Harley-Davidson brand with the strong distribution network and customer service of Hero MotoCorp,” Hero and Harley said in a joint statement.
Harley, which set foot in India in 2010 amid much fanfare and optimism, had failed to crack the formula for success, managing to sell only around 25,000 units in a decade. Its bikes were expensive, many-a-times not as per local tastes, and its network was inadequate. Left with 33 dealerships and 70 employees, the company last month announced closure of its Bawal assembly facility, a move that is estimated to involve $75 million in restructuring costs, and even some job losses.
Harley had faced dealer ire after the announcement, and would now be hoping to soothe some nerves following the agreement with Hero. The Pawan Munjal-run company is seen as a dependable partner, which had last partnered Japan’s Honda for almost 26 years (as Hero Honda JV). Under a distribution agreement, Hero Moto will sell and service Harley motorcycles, and sell parts and accessories and general merchandise, such as riding gear and apparel.
Source From : Times Of India