Harley-Davidson Inc <HOG.N> said on Thursday it would discontinue its sales and manufacturing operations in India, effectively abandoning the world's biggest motorcycle market after a decade of unsuccessful efforts to gain a foothold.
Harley-Davidson Inc (HOG.N) said on Thursday it would discontinue its sales and manufacturing operations in India,
effectively abandoning the world's biggest motorcycle market after a decade of unsuccessful efforts to gain a foothold.
and in the process take a $75 million write-down
when, if ever, is the investment community to going to punish HOG for the never ending string of horrible management choices?
Harley-Davidson Inc (HOG.N) said on Thursday it would discontinue its sales and manufacturing operations in India,
effectively abandoning the world's biggest motorcycle market after a decade of unsuccessful efforts to gain a foothold.
and in the process take a $75 million write-down
when, if ever, is the investment community to going to punish HOG for the never ending string of horrible management choices?
Bound to happen... World's largest motorcycle market yes, but the cost of a Harley is astronomical to being with. Couple that with reliability issues, and additional taxes thrown in, it's not going to be easy to get sales there... Unless, they manufacture parts there and use them to keep assembly lines in the US going...which will be blasphemy when owners find out...
Bound to happen... World's largest motorcycle market yes, but the cost of a Harley is astronomical to being with. Couple that with reliability issues, and additional taxes thrown in, it's not going to be easy to get sales there... Unless, they manufacture parts there and use them to keep assembly lines in the US going...which will be blasphemy when owners find out...
India has a different market ethos and for most of the population, the focus is on cost and economy, which is why there are swarms of 125cc class two wheelers there.
"125cc", is totally out of Harley's league. I think the last time Harley had a small bike was when it collaborated with Italy's Aermacchi and that did not end well.
Besides, with India's taxes and import levies, it is a largely "protected" market i.e. they favor the local.
Not to say that the potential to buy big machines is not there, but it will be a niche market.
I think the market in India for Harley is very limited and if they thought that they could get a piece of it, It was a big mistake. Motorcycles are more utilitarian in India, not just an expensive "toy" for the weekends. It was a good decision just to cut their losses and run
Euro5 effectively killed all those big air cooled V Twins in Europe.
I always though Levatich was a bit of a strange choice for a CEO. He was a bean counter and some/many of his decisions reflected that.
I actually like Zeitz. He's more of a Strategist and Marketer and did a great job with Puma. I wonder if we will see Madonna riding into concerts on her Harley... LOL.
Although the only bike I really liked was the Streetfighter which he canned. I guess time will tell
hate to be that GTAM dude that does this
Levatich is not a bean counter
he's an engineer with a business MBA
was with the Co. from 1984 in operational roles
eventually rising to COO before becoming CEO
he rides/owns bikes ( Softail Slim, XR1200 )
the new guy is a bean counter and a hatchet man
comes to the company from Colgate-Palmolive and Puma
it's rumoured that he once looked at a picture of a motorcycle
reading up on HD's status in India is interesting
they were making the Street line there for domestic sales and export to Europe
sales of that line suck worldwide, so that plant won't be missed
the heavy bikes were still imported from the US and subject to a 60% import tariff
the tariff was nearly eliminated in '07 in a trade deal that fell through
India would drop the tariffs on HD bikes if the US would do the same for Indian mangoes
didn't happen, but sounds like a good deal to me
Remembering back to the original HOG India strategy....
I thought they were just making (or mostly) making the cheaper 500 and 750 street models for India and other countries (all other than NA). If so they not only had India sales but Asia and beyond. Did they ever make any of the classic large bikes there?
Making them there was also a way around the tariffs.
They were still at a premium price locally but they were not after dominant market share, just a small chunk of the huge market. They should have been able to do that at the price point if people wanted the product. I guess they did not.
Regardless, they miscalculated the move and are cutting their losses.
Then, well...Harley. If you think any full-tilt Harley fanatic is going to simply abandon the brand because suddenly their motorcycle comes from offshore, well, perhaps you know different HD fanatics than I know.
They'll say all sorts of things, hell, even Trump will probably huff and puff about it and make all sorts of empty threats, but in the end, I doubt sales would dip a whole lot. Profits sure would soar though.
FWIW I'm not condoning it in any way, it's like GM Oshawa moving their **** to Mexico in my eyes...difference being, not every GM driver was a fanatical owner (and benefit from the insane brand loyalty that Harley carries despite any and all realities), and many HAVE spoken with their wallets - we typically always had 2 GM vehicles in our driveway. Now it's 1. Next new vehicle once I move on from the Bolt, there's a very good chance it'll be none. That's my way of telling GM to **** off.
Indian usually bought by guys who, like Jap bike guys, post hopeful "Harley's Going Bankrupt" threads in forums every three months. Wants to buy an American bike because he doesn't want to be accused of being anti-American. In the U.S. they're usually disgruntled ex Jap bike owners who vote Democrat and can't stand Harleys because most owners vote Republican religiously, laugh at them, and don't believe in socialism.
Okay, that's enough stereotype promotion for now but...
It's easy to say your bike sales are doing well when you're only producing a few thousand a year and you're only tooled for a 10,000 bike production run. Remember, Polaris is a company that just abandoned Victory Motorcycles. It's not all good news for them either.
Indian usually bought by guys who, like Jap bike guys, post hopeful "Harley's Going Bankrupt" threads in forums every three months. Wants to buy an American bike because he doesn't want to be accused of being anti-American. In the U.S. they're usually disgruntled ex Jap bike owners who vote Democrat and can't stand Harleys because most owners vote Republican religiously, laugh at them, and don't believe in socialism.
Okay, that's enough stereotype promotion for now but...
It's easy to say your bike sales are doing well when you're only producing a few thousand a year and you're only tooled for a 10,000 bike production run. Remember, Polaris is a company that just abandoned Victory Motorcycles. It's not all good news for them either.
Indian makes 1 bike for every 10 produced by HD, so they have a way to go. They are making a dent in the lowest end with the small Scouts, the big iron... not so much. That might not be a bad thing (for Polaris) considering the overall market for smaller stuff is growing, bigger stuff shrinking.
Keep your eyes on Polaris (the company that owns Indian). The and HD were about the same revenue in 2016, Polaris has seen double digit growth in the last few years, Harley the other way. Polaris is quite a bit more diversified so a downtick in the MC market does not hurt them much. Watch carefully, they are now bringing in about 50% more revenue than Harley.
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