Harley-Davidson:

Market Entry Strategies in India

Global Strategic Management

Prepared By:

Aanal Prajapati
Amit Parmar
Harsh Jani
Payal Popat
Indian Motorcycle Industry

 Motorcycle is the major contributor to the automobile sector of the

India.
 There are wide growth opportunities in future due to increase in
disposable income.
 Advanced technology, low maintenance cost, and ability to perform
well on Indian roads are the major growth drivers for the industry.
 Overall economic development is another reason for the increase in
the demand for motorcycles in India.
 There are variety of motorcycle brands available in India.
 Major players operating in India are HONDA, SUZUKI,
KAWASAKI, YAMAHA, DAELIM, LML, HERO, KINETIC,
TVS, BAJAJ etc. who have adopted different market entry strategies
to enter in India.
 Major demand among Indian consumers is for 100cc (light weight)
bikes.
 The factors which influence consumer buying decision :
1. Product quality
2. Performance & design
3. after sales services
4. Brand image
5. Cost

 Current scenario suggests that demand for higher engine capacity

bike is increasing in India. The current players in market are making
suitable changes to meet the demand.
Harley-Davidson in India : Market Entry

 Considering growth opportunities for high engine capacity bikes,

HD was eager to enter Indian market since 2005.
 Due to higher import duties and stringent emission norms, H-D is
struggling to enter in Indian market.
 In addition, there is a trade dispute between India and US
government related to the ban imposed on Indian mangoes.
 Apart from this, there were no emission guidelines for motorcycle
with engine capacity above 500cc.
 In India H-D is targeting the youth with higher disposable income.
 In April 2007, a deal was struck between US and India which
mutually benefitted both countries.
 According to the emission guidelines India has agreed to apply
Euro-3 norms for large bikes.

Different Entry Strategies adopted by Foreign Players

 Most of the foreign motorcycle companies entered in India either

through technical collaboration and joint venture.
 Suzuki and Honda adopted licensing and established subsidiaries
in India.
 Royal Enfield from England entered into Indian market by
establishing an assembly unit.
 They import parts from England and assemble them in India as
duties payable on parts is less compared to completely built units.
 The German large bike manufacturer, BMW entered into India
through joint venture with Hero group in 1997.
 But it failed in India due to high price. Despite reducing price by
more than 50%, sales of BMW bikes did not increase and so it had
to terminate its venture in India.
Feasible Entry Strategies for Harley-Davidson

 Vice President of H-D, Timothy K Hoelter has announced that

whenever they enter Indian market it will be through the sourcing
route.
 H-D buyers prefer an all-American brand and bikes produced in US.
 The Feasible Market entry strategy for HD in India is through import
of CKD and then assemble in India.
 Import CBUs as price does not matter for niche customer. Thus
Dealership is one of the best entry strategy for HD.  
 Own Subsidiary is not a viable option for the following reasons
Large Capex, Sales Volume very low/niche,
Import of Technical Expertise, Time consuming for ROI.
 Product Modification, After sales services and Accessories
availability should be the main things to concern.
 As it is a symbol of Rugged Individualism, Independence, Logos,
HOGs and their Ride For Fun should be focussed and thus the
market segmentation should be done according to that.