Hero MotoCorp and Harley-Davidson have kept their partnership open to include more agreements in future including joint development of products as the Indian bike maker aims to go after the premium segment aggressively.
Following the October 27 announcement which said that Hero will sell and service Harley products in India as part of a licensing agreement, a senior Hero MotoCorp official has confirmed that the partnership will keep ‘expanding and extending’ in future.
When asked by an analyst if there will be joint development of products or if Hero will develop products for Harley to be sold by it Hero MotoCorp’s Chief Financial Officer Niranjan Gupta said both partners will work together for such details.
“These are the detailing of how both partners will work together but primarily as we said the bikes will be developed, manufactured and sold by Hero. But the cooperation and collaboration will keep expanding and extending,” Gupta said.
While Hero MotoCorp, the leader of the budget bike segment (100-110cc), has clarified that it will not take over Harley-Davidson’s assembly plant in Haryana, the US-based cruiser bike specialist will supply bikes and other products to Hero under the agreement.
When asked if the motorcycles will be manufactured and supplied to Hero MotoCorp by Harley-Davidson, Gupta replied ‘yes’
In September Harley decided to shut down the Haryana plant as part of its global restructuring exercise. The joint statement released by both the companies on Tuesday does not carry any details about the India plant of Harley, which is one of its only two plants outside of the US.
After the withdrawal of the Karizma 225cc, the biggest bike manufactured and sold by Hero till date, the company re-entered the premium bike space (150cc and above) with the launch of four bikes powered by 160cc and 200cc. The Delhi-based company is desperate to get a better foothold in the high-margin premium bike segment currently controlled by Bajaj Auto.
“We will not be able to share exact details like engine size and the product range under the Harley partnership but clearly it is going to enhance and accelerate our journey into the premium segment as there will be bikes that will be developed carrying the Harley brand name. So this partnership will straddle across engine capacities,” added Gupta.
As far as sales and distribution are concerned Harley-Davidson bikes will be sold through the existing network of Harley’s 29 dealerships as well as select dealerships of Hero MotoCorp. Most likely these select dealerships will wear a different front-end look to suit the corporate requirements of Harley in case of a shop-in-shop sales model.
“Hero will sell Harley products through the existing network of Harley Davidson dealers and select dealership of Hero network in India,” added Gupta.
Gupta further added that presently there is no scope in the partnership of making India the manufacturing hub for Harley-Davidson.