Hero to develop Harley Davidson bikes for India

Inside a Harley showroom in India

Hero MotoCorp said it has signed an agreement to co-develop and sell “a range of premium motorcycles” with iconic US motorcycle maker Harley Davidson.

The announcement comes a month after Harley Davidson decided to exit the Indian market due to poor sales.

The company had been selling over 10,000 units per year during the peak around 2016, but had seen sales decline since then due to rising competition.

The maker of premium, cruise-oriented motorbikes faces competition from the likes of Triump, KTM and BMW in India.

It has also found it harder and harder to attract users to buy bikes that are priced at Rs 5 lakhs and above.

Hero MotoCorp sits on the other end of the spectrum, gaining nearly all of its sales from bikes priced below the Rs 1 lakh mark.

The company is also an ideal partner for Harley Davidson as it has no offering of its own in the 2 lakh plus market.

Besides developing new Harley models tuned to the Indian market, Hero MotoCorp will also continue to sell imported Harleys through its extensive dealer networks. It will also sell them through exclusive Harley Davidson showrooms.

“These actions are aligned with Harley-Davidson’s business overhaul, The Rewire, and the company’s announcement in September to change its business model in India,” the companies said.

“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,” it added.

India is the world’s biggest motorcycle market, but also the most price-sensitive. The median motorbike sold in India costs only around Rs 75,000 rupees, or around $1000.

Nevertheless, the country is home to a large number of aspirational buyers who want to get their hands of cruisers and choppers.

However, given that most of the Harleys and Triumphs available in India cost more than the average Indian family car, many of these would-be buyers are forced to keep their aspirations aside.

A Harley branded motorbike priced in the vicinity of Rs 2.5-3.0 lakhs ($3,700-$4,000) could hit the sweet spot for the category of ‘premium’ bikes in India.

However, competition in the premium segment is set to rise with Hero’s former partner, Honda, announcing the H’ness CB350, likely to be priced around Rs 2 lakh before road taxes.