MANJIV SINGHs DOPESHEET Q1> What is Harley Davidson and what is its history?

HARLEY DAVIDSON IN INDIA Harley-Davidson is a 107 year old American motorcycle manufacturer. The company sells heavyweight (over 750 cc) motorcycles designed for cruising on the highway. Harley-Davidson has more than 1300 authorized dealerships in 68 countries worldwide. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, the founders William S. Harley and Arthur Davidson produced their first motorcycle in 1903. Harley-Davidson survived the Great Depression and also survived a period of poor quality control and competition from Japanese manufacturers. In 1969, American Machinery and Foundry (AMF) bought the company, streamlined production, and slashed the workforce which resulted in a labour strike and a lower quality of bikes. Sales declined, quality plummeted, and the company almost went bankrupt. In 1981, AMF sold the company to a group of thirteen investors led by Vaughn Beals and Willie G. Davidson for $80 million. Harley-Davidson's association with sportbike manufacturer Buell Motorcycle Company began in 1987 which then led to complete ownership in 2003. On October 15, 2009, the company issued an official statement that it would be discontinuing the Buell line and ceasing production immediately. On July 11, 2008 Harley-Davidson signed a definitive agreement to acquire the MV Agusta Group for $109M USD (70M). The acquisition was completed on August 8. On October 15, 2009, Harley-Davidson announced that it would divest its interest in MV Agusta and sold the Italian motorcycle maker MV Agusta to Claudio Castiglioni, ending the transaction on the first week of August 2010. Harley Davidson, launched twelve of their motorcycles in India at the 2010 Auto Expo in January.

Q2> What is Harley Davidson Inc?

Harley-Davidson, Inc. was incorporated in 1981, at which time it purchased the Harley-Davidson motorcycle business from AMF Incorporated in a management buyout. In 1986, Harley-Davidson, Inc. became publicly held. Harley-Davidson Inc is the owner of Harley-Davidson Motor Company, Buell Motor Company, MV Agusta Group and Harley-Davidson Financial Services. Harley-Davidson holds the rights to all of the brands, and manages the licensing agreements with the different suppliers that offer Harley-Davidson branded products and services.

Harley-Davidson Motor Company manufactures and sells the HarleyDavidson motorcycle range, as well as Genuine Parts, Accessories and General Merchandise. Harley-Davidson Financial Services Inc. provides wholesale and retail financing, insurance and credit card programs to Harley-Davidson & Buell Dealers and customers. HDFS conducts business principally in the United States and Canada. Buell Motorcycle Company manufactures Buell motorcycles, sport bikes that offer a genuinely unique proposition, through the Trilogy of Technology, unique styling and superb handling in the air and watercooled ranges of motorcycles. On October 15, 2009 the Company announced that it would exit from the Buell product line. MV Agusta Group was the most recent addition to their portfolio of brands. A line of exclusive, premium, high performance sport motorcycles sold under the MV Agusta brand; and a line of lightweight sport motorcycles sold under the Cagiva brand. On October 15, 2009 the Company announced its intent to divest MV. Q3> How did HarleyDavidson manage to penetrate the Indian market? What all problems did they face? In the past, India had taken a tough stand on the import of Harley Davidson citing the American bike maker's inability to meet emission norms. On the other hand, the Indian mangoes had not been allowed to the US market due to various non-trade barriers. In 2007, U.S. Trade Representative Susan Schwab and the Minister for Commerce and Industry of India, Kamal Nath, had agreed that HarleyDavidson motorcycles will be allowed access to the Indian market in exchange for the export of Indian mangoes. Plans to export to India were also held up by import duties of 60% and taxes of 30%, which effectively doubled the sale price. Though bikes in India have to meet the Euro IV norms, Harley Davidson is being been given a liberal treatment. But its bikes would have to meet at least Euro III norms. Plans to enter the Indian market had been delayed for several years, due to high tariffs and emissions regulations. The pollution regulations were ofcourse changed, but the tariff problem is yet unresolved. Q4> What models has Harley Davidson released in India and how much do they cost? Harley has more than 40 motorcycles from 5 families of bikes. 12 of these models have been shortlisted for India. These motorcycles will range from INR 6,95,000 to whopping INR 34,95,000(ex-showroom New Delhi). Here is what the complete Harley-Davidson line up in India will consist of from each HD family: Sportster: XL 883L Sportster INR 6,95,000 XL 883R Roadster INR 7,50,000

XL 1200N Nightster INR 9,95,000 XR 1200X INR 11,95,000 Dyna: FXDB Street Bob INR 13,95,000 FXDC Super Glide Custom INR 15,45,000 VRSC: VRSCDX Night Rod Special INR 18,95,000 Softail: FLSTF Fat Boy INR 18,45,000 FLSTC Heritage Softail Classic INR 19,45,000 Touring: FLHR Road King INR 20,45,000 FLHX Street Glide INR 21,95,000 FLHTCUSE Ultra Classic Electra Glide(CVO) INR 34,95,000 Q5> Is there any difference in the models that sell here in India and the ones in the US in terms of specifications and pricing? Although the entire range of models arent available in India as of now, there isnt any difference in the models that are available here and the similar ones in the US in terms of specifications. All its bikes would be imported from the US facilities as completely built units. In terms of pricing, there is a huge difference. Harley-Davidson currently imports its bikes into India as Completely Built Units (CBUs), paying 60 % import duties for the bikes and 30 % local taxes which double the MRP. So FLHTCUSE Ultra Classic Electra Glide(CVO) which costs USD 35,999 (INR 16,02,000) in US, costs INR 34,95,000 in India. Harley has tied up with ICICI Bank who will finance up to 85% of the bikes price tag. The bank charges 11% rate of interest, so owning the cheapest Harley (XL883L Sportster) will set you back by 12,845 rupees every month for a period of five years. But, if youve been dreaming of a Harley-Davidson and dont have the money to chalk out on the full payment or the finance schemes down payment, wait and save up for a couple of years and hopefully by then your dream Harley-Davidson ride should be much cheaper and will also be assembled in India. Harley has high hopes for selling heavyweight motorcycles in the worlds second largest two-wheeler market after China, where it expects to have twenty new dealers by the end of 2015 so as to have a nationwide coverage. For Harley, India is to be the biggest market in Asia in the next ten years. India is high on Harleys priority list because of its burgeoning middle-class population and desire for American products. The company plans to increase foreign sales to 40% by 2014 and India plays an important role in this respect. This is the first time in any market that Harley has entered using a wholly-owned subsidiary which they established in August 2009 in Gurgaon. Despite the mass market still being dominated by inexpensive bikes, the company is bullish about the growth and expects to see leisure biking grow in a substantial manner.

Q6> Does Harley provide any financial support ?

Q7> What does India mean to Harley?

Q8> What is Harleys future plan with respect

Harley-Davidson is planning to assemble its bikes in India after countries like Malaysia, Brazil, Indonesia and Singapore, in a bid to lower its

to India?

products sticker price and boost sales. The company could bring this figure down to 30 % if it starts to assemble its bikes from Completely Knocked Down (CKD) kits sourced from abroad. The ideal situation for the company would be to have the duties reduced, but knowing India, it seems like a far cry. Harley-Davidson may also consider going a step beyond assembly, and may actually start manufacturing the motorcycles in markets where it picks up well. Although, having a manufacturing plant in India could have a negative effect on the brand. H-D has always been very closely associated with America, and manufacturing it outside may take some of the pride and exclusivity away from the brand. The cult bike maker also plans to establish a product development centre for the design and development of bikes for the Indian market. The company is also looking to start rental services of its bikes through its dealer network by the end of next year. Harley Davidson India appointed first five dealers across India in Bengaluru, Chandigarh, Hyderabad, Mumbai and New Delhi. The dealers appointed will be the sole retailers for Harley-Davidson motorcycles, genuine parts and accessories, and Motor clothes apparel and will operate authorized service centres across the five cities in India. The five new dealerships are as follows: Tusker Harley-Davidson in Bengaluru, led by Srinivas Reddy Himalayan Harley-Davidson in Chandigarh, led by Siddharth Garg Banjara Harley-Davidson in Hyderabad, led by K Jairam Seven Islands Harley-Davidson in Mumbai, led by Arjun Bafna Capital Harley-Davidson in New Delhi, led by Atul Aggarwal The Harley-Davidson India dealerships are being designed to the companys global standards and will reflect the essence of the brand. After the bookings commenced from 20th April the delivery of the bikes started from the month of June. Harley Davidson is a well known brand. It is not a brand that goes for traditional advertising. They rely more on word of mouth publicity. To get the customers in, Harley participates in motorcycle shows, rallies and other high profile events. Harley did a remarkable amount of public interaction when they organised the Boot Camp and the Founders Ride in India. Mr Anoop Prakash, MD, Harley Davidson India, says I want all enthusiasts to look and feel for themselves what it is to ride a Harley. We already have an incredible amount of people registering on our website to be informed about events and rides. We want to reach out to as many and as quickly as we can. So, I believe at the front end there is not a lot of value in advertising in the traditional sense. Another important marketing strategy that Harley uses is H.O.G. (Harley Owners Group). Established in 1983, H.O.G. is the largest factorysponsored motorcycle club in the world. With over 1 million members,

Q9> Where are the dealerships for HarleyDavidson in India?

Q10> What is their marketing strategy?

the Harley Owners Group is one of the largest enthusiast groups in the world. H.O.G. is all about providing members with a means to Ride and Have Fun. This is achieved by organizing and supporting local, national and international events and riding activities during the year. This allows for a close to the customer approach and the opportunity to H.O.G. members to meet fellow enthusiasts. Harley-Davidson has one of the most highly devoted customer groups in the world. Not only does this enthusiasm build the brand name, it also translates well in sales. On average, an active H.O.G. Chapter member spends 60% more on a visit to their Harley-Davidson dealer than a non member. In addition, H.O.G. members account for 24% of all brand new Harley-Davidson motorcycles sold worldwide and an equally significant proportion of all after-sales and service expenditure at a dealer level. Q11> Who is their prime competitor? On one end of the spectrum, there are the commuter bikes and on the other end, there are the sports super bikes. So there is a huge gap in the middle which Harley hopes to fill. So Harley claims that they do not have any competition since there is no market that exists in India for what Harley is bringing. If we were to name a competitor though, it would probably be the Royal Enfield, the only Indian motorcycle company offering cruisers. Though expensive, Harleys strengths lies in its heavy weights or over 750cc bikes that Royal Enfield does not offer. Royal Enfields heaviest bike is 500cc while Harleys lightest is 883cc.