Harley-Davidson Is Finding Success in China
Harley-Davidson is an iconic American company that’s famous for selling highly sought-after motorcycles. Most Harley-Davidson bikes are big and powerful, not the kind of thing you’d typically expect to find on China’s crowded and often narrow streets, yet Harley-Davidson, who has been actively working to grow their global market, is in the process of introducing their iconic bike to motorcycle enthusiasts who live in China.
Breaking into the Chinese market hasn’t been easy for the superstar motorcycle company. While Harley-Davidson is finding success in China, Europe, and other parts of the world, the process hasn’t been completely smooth sailing.
Harley-Davidson’s history in Asia
This isn’t Harley-Davidson’s first foray into the Asian market. In 1912, the company established a relationship with Japan. This allowed the company to export motorcycles to the country. 99 years later, Harley-Davidson opened an Asian headquarters, which it based in Singapore.
In 2001, China formally gained entry into the World Trade Organization. This provided Harley-Davidson with the opportunity to explore the possibility of marketing motorcycles in China’s large cities. In 2005, the company worked with the Shanghai government and was allowed to create a representative office. Five years later the Harley-Davidson (Shanghai) Commercial and Trading Co. Ltd. was established.
A new design
In a perfect world, Harley-Davidson would simply start selling their current line-up of motorcycles in China, but the world is far from perfect. One of the challenges the company has encountered is while there are plenty of motorcycle enthusiasts in China, they haven’t been purchasing Harley-Davidson’s as aggressively as the company hoped.
The lackluster sales prompted Harley-Davidson to decide that its current line-up of bikes isn’t suitable for the country, so the first step in breaking into the Chinese market is designing a brand new Harley-Davidson line-up.
Plans are underway to develop a sub-500cc model Harley-Davidson that will be available in China as soon as 2020. The company plans on producing the small bike in high-volume, which keeps production costs down.
The projected price of the Harley-Davidson bike will be an estimated $4,000. While there’s no word on if the company plans on marketing the small Harley in the United States, according to reports in both Outlook India and Zigwheel, the motorcycle will most likely show up in India and other parts of Asia.
Not only should the smaller motorcycle be easier to handle and better suited for China’s busy streets, but the low purchase price will appeal to consumers. This would hopefully create some brand loyalty.
There are rumors that consumers will catch their first glimpse of the sub-500cc at the 2019 EICMA.
While sales might not be as strong in China as Harley-Davidson expected, young adults do like the brand. They’re particularly enamored with the Harley-Davidson Street 750 motorcycle and Sportster motorcycles.
Trouble with the White House
Harley-Davidson’s desire to boost sales in the Asian market has drawn heat from the White House. The company’s decision to shift some of its business away from the United States and into China and other global markets didn’t make President Trump happy.
The problem is that the European Union taxes the company faces each time it ships American made motorcycles into Europe will cost the company as much as $100 million every single year. The tariffs Trump and his administration placed on importing both steel and aluminum further increased Harley-Davidson’s costs.
Now the company has to deal with the tariffs the White House has attached to imports and exports coming from and to China will further cost the company if it doesn’t move more of its production to China.
Meanwhile, the strained relationship between Harley-Davidson and the White House are hurting Harley-Davidson sales in the United States. In 2018, the company reported a 13.3 percent decrease in sales.
Do you think the day will come when China’s streets are full of Harley-Davidson motorcycles?