The Downfall of Harley Davidson?
Harley Davidson has announced its exit from the Indian market due to poor sales, but upon investigation, this move paints a bigger picture...
The news is out and official – Harley Davidson, the iconic American motorcycle manufacturer is ending its operations in India for good. Harley’s inability to capture the insanely popular cruiser segment in India despite its enviable brand history and recognition will go down as one of the biggest manufacturer flops in the ultra-competitive Indian premium bike segment. But this very move paints a clearer picture of the current state of Harley Davidson as a company and why the future of the brand seems bleak.
Let’s go back in time to 2014, Harley had just launched the much-awaited Street 750, assembled in an all new plant in India and was destined for greatness in the local market. Or, so it seemed. The shift in public preference to cruisers and retro bikes wasn’t in full swing back then and any hopes of Harley initiating the change were put to bed when they launched the bike at a starting price of Rs. 4,10,000 ($5500). While that might not seem like a lot to European and American bikers, the fact that you could get a Royal Enfield Thunderbird for about the third of the price means that Harley was simply non existent on buyers’ shopping lists. Add to that the insane number of quality control issues and the overall lack of desirability of the product meant they couldn’t sell a lot of bikes.
But the issue with Harley Davidson at the moment goes way beyond the Street 750 and India. To put it simply, they are too reluctant to adapt or embrace change. Manufacturers put in a lot of effort to lock young and first-time buyers into their brand, and to do so in emerging markets like India usually involves teaming up with local giants like TVS or Bajaj to develop an accessible entry level model or use their might to reach out to a wider base. KTM and Kawasaki used this model to perfection, and are now the most popular foreign bike manufacturers in the country. BMW has used this model with relative success, and other iconic brands like Triumph are expected to follow suit.
The aforementioned brands were realistically Harley’s biggest rivals in the market. Craving for a chunk of Royal Enfield’s pie was never going to work with the prices they charged for their bikes. And to be honest, that’s completely fine, considering the huge Royal Enfield fanbase in the country. Which brings us neatly on to Harley’s biggest problem yet. Their fanbase.
Buyers in emerging markets in Asia are predominantly young, usually just taking their first steps into the world of motorcycling- on a budget. Manufacturers go to great lengths to tie these buyers into their brands, thus increasing the probability of these buyers upgrading within. Harley though, never had products that really appealed to these young buyers and thus had a relatively older buyer base. Their reluctance to bring in cheaper and new products and sticking on to their old lineup meant that younger buyers simply weren’t interested in the brand. And so, their numbers fell way short of their targets. Although they are moving into segments outside their comfort zone – the Bronx Streetfighter and the Pan America show us that they’ve finally decided to embrace change – their hopes for new markets rests on a cheaper product line, which doesn’t seem to be on the horizon anytime soon.
Harley’s ‘Rewire’ strategy aims to focus on their few remaining profitable markets, and while that might seem to be good for the short term, it’ll mean that Harley will lose the opportunity to grab a chunk of the rapidly growing Asian buyer base in the long run. Companies like Triumph are in position to swoop in and take away Harley’s potential buyer base, and that’s a shame, considering Harley’s significantly better public perception. All hope is not gone yet though, as they could make these affordable bikes in conjunction with a mass market manufacturer. Until then, the case in India will be remembered as a huge “what if?”, and it might very well be the first blow in the downfall of Harley Davidson.
What do you think of Harley Davidson's exit? Do you think that this is the start of their downfall? Leave your thoughts in the comments below.