Harley-Davidson eyeing India in 2010

NEW YORK — Harley-Davidson Inc. said Thursday it will begin selling motorcycles next year in India, the world’s second-largest motorcycle market, where the company hopes its iconic, heavyweight bikes will find a niche among the country’s rising middle class.

NEW YORK — Harley-Davidson Inc. said Thursday it will begin selling motorcycles next year in India, the world’s second-largest motorcycle market, where the company hopes its iconic, heavyweight bikes will find a niche among the country’s rising middle class.

The Milwaukee-based company (NYSE:HOG) said it has established a subsidiary near Delhi and has begun scouting the country for dealers.

India is the world’s largest market for motorcycles behind China, but it is overwhelmingly dominated by smaller, inexpensive bikes used primarily for transportation, said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers.

It is also a market dominated by several well-entrenched Japanese and Indian manufacturers. Hero Honda, a joint-venture between Japan’s Honda Motor Co. and India’s Hero Group, holds the biggest market share among two-wheelers.

Honda, Suzuki and Indian motorbike maker Bajaj Auto are also major players.

Still, Harley said the country’s growing economy, rising middle class and expanded highway construction has created a market for leisure motorcycle riders.

“Motorbikes, scooters in India are family commuting bikes,” Chenoy said. “They tend to be more robustly built and the focus is on fuel economy, but there is an increasing market for leisure and high-end bikes which is beginning to happen here in India.”

The company said it has begun identifying initial dealers in Mumbai, Delhi, Bangalore, Hyderabad and Punjab State.

Harley’s entry in India marks a major win for the motorcycle maker, which has been vying for a foothold in that market for years. The country of more than 1 billion people has experienced roaring growth in recent years, though its economy has cooled in the downturn. Growth for the fiscal year ended March slowed to 6.7 per cent from 9 per cent the previous year.

The company first launched plans to enter the Indian market in 2007, but the venture was delayed by two obstacles: emissions standards that hindered sales of heavyweight bikes and tariffs on imported motorcycles as high as 60 per cent.

Spokesman Bob Klein said a change in Indian emissions standards has paved the way for the company’s entry. He said the tariffs remain in place, but the company views demand as strong enough to overcome them.

Levatich said the company would continue to push for lower tariffs but did not want to risk missing out on the rapidly growing market.

“Waiting and continuing to work the tariff issue would have risked the market further developing within the leisure segment without our participation,” Levatich said.

Harley has been pushing hard in recent years into overseas markets, where it hopes rising incomes and the company’s strong brand identity will lure new customers and help offset flagging sales at home.

In 2008, motorcycle shipments in the U.S. fell 15 per cent to 206,000 units while international shipments climbed 9 per cent to 97,000. Harley shipped 32 per cent of its motorcycles overseas in 2008, up from 27 per cent in 2007.

The Asia-Pacific markets in particular have grown in importance for Harley. The company has been opening dealerships in China in recent years and has also sought to enter the Vietnamese market.

Tim Hoelter, Harley’s vice-president of government affairs, said the company still hopes to enter the Vietnamese market, but it continues to be hindered by tariffs as high as 90 per cent.

Last year, Harley’s then-CEO Jim Ziemer said in an interview “it’d be nice if we eventually get to a 50-50 split” between domestic and international sales. The company currently sells bikes in more than 70 countries.

Shares of Harley-Davidson rose 28 cents to $22.23 in Thursday trading on the New York Stock Exchange. The stock has gained 29 per cent since the start of the year, as investors begin to see a recovery in demand after a wrenching drop in sales during the U.S. recession.

Just Posted

Record-breaking year in Red Deer for smoke

Expect more smoke in Red Deer Wednesday

Mustard Seed prepares people for workforce

Employment Readiness Fair to be held August 28

Update: Bomb squad investigating suspicious package in Red Deer

North police station closed as they investigate

Whispering Pines raises $40,000 for STARS

The golf and country resort held its fifth annual STARS Charity Golf Tournament this past weekend

Man dies in vehicle rollover west of Red Deer

Rocky Mountain House RCMP investigate

Updated Red Deer smoke free bylaw to ban smoking cannabis in public

Smoke Free Bylaw returns to Red Deer city council Sept. 4

Liberals unveil poverty plan with lofty goals, but no new spending programs

OTTAWA — The minister in charge of Canada’s latest national plan to… Continue reading

Case of truck driver charged in Humboldt Broncos crash adjourned until October

MELFORT, Sask. — The case of a Calgary truck driver charged in… Continue reading

Animal crackers break out of their cages

After more than a century behind bars, the beasts on boxes of… Continue reading

Alligator kills woman trying to protect her dog at resort

HILTON HEAD ISLAND, S.C. — A woman who often walked her dog… Continue reading

Patients redirected as water leak shuts down Edmonton hospital’s emergency room

EDMONTON — Ambulances are being redirected to other hospitals after a water… Continue reading

Parks Canada moves second bison bull that wandered out of Banff National Park

BANFF — Parks Canada says a second bison bull that wandered out… Continue reading

Lottery for parent sponsorship to be replaced, more applications to be accepted

OTTAWA — The Trudeau government is scrapping an unpopular lottery system for… Continue reading

Air Canada-led consortium signs deal to buy Aeroplan program from Aimia

TORONTO — A consortium led by Air Canada has reached a deal… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month