Harley Pulls In New International Business

"Mob Scene" at Harley-Davidson Hyderabad Opening

India is mostly known for Mohandas Gandhi, who fought for Indian independence with non-violence.

But, in Hyderabad last week it was the sight of a near mob scene thanks to Nandamuri Taraka Rama Rao or more popularly known as Jr. NTR.  The film actor was present for the inauguration of the first Harley-Davidson showroom opening in the country.  You can watch the pandemonium HERE.

Should we care?  Given that one of the major tenants of Mr. Wandell (CEO) and Harley-Davidson board’s growth strategy being international expansion I think it’s fair to follow India’s success.  India has culture, spiritualism, yoga, spices, multiple languages and now Harley-Davidson Hyderabad.  With four more dealer/showrooms in the pipeline at Chandigarh, followed by New Delhi then Mumbai and Bangalore the motor company could be set to capitalize on any untapped heavy cruiser market.  Clearly the company is betting on India to help grow sales.

Interesting to me is that India is the world’s second-largest motorcycle market.  However, most sales are of small, inexpensive scooters that can weave through traffic in the heavily clogged cities.  India does have some open roads outside the large cities but many are marred with potholes and don’t make for easy riding.  As part of Harley’s long-term commitment to the country they chose to enter India as a subsidiary rather than through a pre-existing dealer network.  With the motorcycles being made in the U.S. and shipped to India they face hefty custom duties.  In fact, the cost of a basic Sportster starts at 695,000 rupees ($14,917)… all this does make one wonder just how many India customers are willing to pay for ownership bragging rights.

I also found it intriguing that buried in the announcement was the point that the company plans to relocate a 20-year service veteran from Harley’s headquarters.  Talk about a culture change…  Miller vs. India Pale Ale (IPA).

UPDATE: July 14, 2010 — Anoop Prakash (H-D Managing Director, India) told reporters during an announcement about securing the ICICI Bank for vehicle financing that the size of the market (800cc and larger) for 2009 was about 700 units and was growing at double digits.

Photo courtesy of HD and TV5.

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Mango Countdown

In two days the Indian “Alphonso” mangoes will hit the U.S. supermarket shelves for the first time in 18 years!

I’m reminded of that Jimmy Buffett song “Last Mango in…”

I went down to Captain Tony’s to get out of the heat

When I hear a voice call out to me, “Son, come have a seat”

The “seat” in this case is attached to a Harley-Davidson.  In exchange for importing mangoes, H-D will be allowed to launch its 883 Sportster and Fatboy in the “land of a billion people” (a.k.a. India) on August 27th as long they comply with Euro-III emission norms. In a country that snaps up more than 6 million new motorcycles a year, H-D is a bit late to the party, but they have to be optimistic given the successes of Yamaha, Suzuki, Honda and Ducati “superbikes” (anything over 800cc are referred to superbike in India).  The bikes will be shipped to India and available as a CBUs (Completely Built Units).  Previously the Indian government had not specified emission standards for motorcycles over 500cc which effectively prohibited the import of H-D motorcycles who could not meet the standards set for scooters.

Speaking of standards…  I’m talking about a country that after more than six decades of independence, over 55% of the population (~660Million) defecate in the open! Given these statistics it’s no surprise the government was slow to specify emission standards on 500cc motorcycles when they clearly are busy with sanitation issues.

New Deli Traffic

Until this week Royal Enfield (owned by Eicher Group) was the only motorcycle maker to offer cruisers in India.  Consistently large orders from the Indian government led to establishing a factory back in 1955 in the town of Chennai, India.  Even after production stopped in England they continued in Chennai.  Here is a 5 min video of them building a motorcycle.  There seems to be a fondness of following the old British tradition and use of a mallet to assist in the precision parts fitting!

Anyone who has visited India knows that the large cities of New Deli, Bangalore, Hyderabad, or Mumbai have traffic that defies amazing.  It’s extremely densely packed roads with stop-n-go vehicles and engines idling most all of the time.  Then there are the rickshaws (phat-phatis), bicycles, jay-walkers, street-car peddlers, cows, donkey carts and at any given time each traffic lane supporting triple the number of vehicles that it should so, what you end up with is pure chaos.  Even with astronomically high traffic-death rates, scooters and motorcycles are the more practical method of getting around on these packed roads.

Matt Levatich, President and COO of Harley-Davison reportedly will be on hand at the launch and annual Society of Indian Automobile Manufacturers (SIAM) to welcome back H-D to India for the first time since World War II.  At that time thousands of motorcycles were shipped to the eastern Assam state of India with the intention of transporting men and deliver mail.

India is a prime target given the sheer market size and I want to wish them success as they work to diversify their revenue base.

Photo courtesy of H-D India and Flickr.

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