Harley-Davidson rides on increased demand, extends bike-delivery time

Written by Rachit Vats | Mumbai | Updated: Apr 1 2014, 14:46pm hrs
Harley DavidsonHarley has a manufacturing facility at Bawal in Haryana, the company's second plant outside of US. (AP)
American bike maker Harley-Davidson has joined the league of rival Royal Enfield in commanding a longer waiting period for its motorcycles in India. Powered by a lower price tag on account of intense localisation, Harley's new launch Street 750 comes with an under R5-lakh price tag and a waiting period of three months.

The company had opened booking on March 1 promising delivery by June, but with higher bookings, deliveries have been pushed for September. By 2015, the company plans to launch a far-more affordable Street 500cc bike as it prepares to capture a larger market share in the growing premium domestic motorcycle space.

Harley is a more aspirational brand, but prices are much higher than Royal Enfields and it plans to plug that gap. Harley understands that affordability is key to Indian consumers, thus, it introduced an indigenous Street 750cc, 20% cheaper than the lowest-priced model, making the product more affordable, said Hitesh Goyal, auto analyst, Kotak Institutional Equities.

The price gap between the cheapest Harley and the most expensive Royal Enfield has narrowed from three times in 2013 to 1.8 times in 2014, and the gap will further narrow with the Street 500cc, said Goyal.

Royal Enfield's Classic bikes command a waiting period of over 6 months.

Harley has a manufacturing facility at Bawal in Haryana, the company's second plant outside of US. Other than the engine, the Street750 has most of its parts sourced from the domestic market. These include the tyres, brakes, body frame, cylinder head, engine parts, front forks, swing arm, and others. Currently, the company assembles nine models for the Indian market, including the 883L SuperLow, and Iron 883, while it plans to manufacture at least two models from here.

Street750 and Street500 are the only Harley-Davidson bikes to be built for markets outside North America at the Bawal plant, said Anoop Prakash, managing director, Harley-Davidson India.

Harley aims to export a large quantity of Street 750, 500 bikes from India.

The company is getting aggressive on pricing, and with higher import duties, localisation is the key to bring down price and help on savings. The only thing that they need to focus now is on scaling up dealership, said Yashesh Mukhi, equity research associate at Morgan Stanley.

Harley currently has 13 dealers in India. The company had recently shut down its Bandra showroom and move to larger space in faraway Navi Mumbai. The company claims it will soon open a dealer closer to the earlier location, even as it scouts for newer spots across the country.

In 2014, we will focus on expanding presence in Tier-II markets such as Guwahati, Coimbatore, Calicut and Surat, said Prakash. Harley sold a total of 1,758 motorcycles in India between April 2013-January 2014, a growth of 48% during the same period a year ago.