Harley Davidson had announced earlier this year that they were looking for a partner in Asia, who will help them manufacture low cost, entry level motorcycles. This made many think that it would likely be an Indian parter. There were also rumours about Hero MotoCorp being a potential partner.
Today, Harley Davidson has revealed the name of their Asian partner. And it is not Indian. Harley Davidson has partnered with Chinese motorcycle maker – Zhejiang Qianjiang Motorcycle.
Interesting point to note here is that Zhejiang Qianjiang Motorcycle is the owner of Benelli. It is also worth noting that Geely, the owner of Volvo Cars, has majority stake in Zhejiang Qianjiang Motorcycle.
Matt Levatich, president and CEO of Harley-Davidson said, “We’re excited about this opportunity to build more Harley riders in China, one of the world’s largest motorcycle markets, by creating new pathways to our brand.”
Together, the American-Chinese duo will launch a 338 cc motorcycle by end 2020. This motorcycle will first be launched in China. After that it will be launched in countries like India, Australia, Japan, Malaysia, Philippines, Vietnam, Thailand and Indonesia.
Not much details have been revealed about the Harley Davidson 338 cc motorcycle. The new Harley Davidson 338 cc motorcycle could be christened Harley Davidson Street 350. It will sit below the Street 500 and Street 750 in the company line-up.
The engine is expected to be a single cylinder unit generating power in the range of 30 PS and 30 Nm. Styling could be similar to the Street 750 and Street 500. To keep prices competitive, the Street 350 is expected to be made in India, at the company plant in Bawal, Haryana where the Street 500 and Street 750 are manufactured.
Despite of many Harley Davidson motorcycle owners suggesting not to launch a cheaper / smaller motorcycle, the company has decided to go ahead with the plan. The reason is failure to increase sales and decline in profits.
Lack of small / affordable motorcycles in the line-up has resulted in falling demand as well as sales, especially in growing markets like China, India, Thailand, Indonesia, etc. This is the same reason Harley Davidson had launched the Street 500 and Street 750. The Street duo has helped company increase sales, but not at the pace they would have hoped.
Rival companies, which offer smaller capacity motorcycles are growing. For the first time ever, KTM managed to beat Harley Davidson in sales last year.
The formula of partnering with an Asian bike brand is not new. KTM has done the same with Bajaj. BMW partnered with TVS. Triumph has partnered with Bajaj. Thanks to lower cost of manufacturing, price of the bikes manufactured in India are comparatively lower. This has proved vital in increasing sales in target markets.
With their new partnership with China’s Zhejiang Qianjiang Motorcycle, Harley Davidson could be hoping on taking on the likes of Royal Enfield and Jawa in India. And with Benelli already a part of Zhejiang Qianjiang Motorcycle, Harley Davidson could also use their outlets for sales and service.
In the 300-350 cc segment, it is Royal Enfield which is the king as of now, with over 80% market share. It registers average monthly sales of 35,000 units in this segment. It is this success / demand which has led Harley Davidson to venture in this segment. Bajaj-Triumph too are reportedly planning to launch a bike in this segment by 2022.