Harley-Davidson To Partner New Alliances For Lightweight Bikes Sales Growth In India

Harley-Davidson Inc is searching for a partner with a manufacturing and distribution hold to produce lightweight motorcycles for use in India and other Asian markets, a top executive in the company said. The Milwaukee-based motorcycles company, known for its heavy-make touring motorcycles, said last week it would launch a 250cc to 500cc motorcycle in India to boost sales in the world’s largest two-wheeler market as it comes to terms with an aging customer base and falling sales in the United States.

Industry sales are projected to grow 25 percent a year in India which is termed as Asia’s third-largest economy in the 250cc to 500cc segment through 2021.

“We realize that we as a company have been very focused on large heavyweight motorcycles and our expertise in the 250-500cc space needs to grow,” Marc McAllister, vice president of product portfolio at Harley-Davidson, told Reuters in an telephone interview on Friday.

“We are looking for a strategic alliance that can help us grow through understanding the product, understanding the consumer, understanding the assembly,” he said.

That could convey that Harley will not necessarily make the new motorcycles at its own facility located in India, and may instead use a local partner in the country, McAllister said. He declined to discuss any names or details of potential partners.

Supported by rising discretionary spending, motorcycles sales in India are experiencing double-digit percentage speedy growth, compared with tepid recent consumer demand in the USA.

Attracted by the enticing growth prospects, British motorcycle maker Triumph and Germany’s BMW have partnered with domestic Indian companies Bajaj Auto and TVS Motor, respectively.

Harley expects the lightweight segment to act as a “bridge” for future big deals for its brand, said McAllister, allowing it a chance to make deeper inroads into a market where over 20 million two-wheelers are sold annually.

The company was heavily criticized by U.S. President Donald Trump over a plan move production for European customers overseas to avoid ongoing retaliatory tariffs in a trade dispute between the United States and European Union.

Harley is hoping a foray into the lightweight segment very soon, along with other new type of product launches, will expand its operating margins and add up to whopping $250 million in operating profit in 2022.

Analysts are doubtful of the profit targets as India is a highly cost-competitive market and lightweight bikes are historically lower-margin products.

McAllister said the new bike will be a premium product as an offer, but declined to reveal a price range.

As part of its huge drive to increase market share in India, Harley said it will increase its number of dealers in the country from the current 30, McAllister said.

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