Harley-Davidson go for a slice of the Chinese pie with smaller displacement motorcycles
12 years ago I wrote an article in which I detailed the growing popularity of what the Chinese label ‘famous brand’ motorcycles in China with reports on how Harley Davidson and Ducati had entered the market place. Not long after that article the clamour for these products faded greatly with the great economic downturn of 2008 a big factor.
Fast forward 12 years and the biggest news coming out of the Chinese motorcycle industry is that giant manufacturer Qianjiang have agreed to a partnership in which they will manufacture and market a new smaller model Harley-Davidson with a 338cc engine which is better suited to the Chinese (and by extension the larger south-east Asian market). It has long been known that HD’s long term marketing plan is to sell half of its motorcycles internationally (it currently sells around 42% abroad) as its shrinking base of domestic customers’ declines. Harley have set their sights on the year 2027 to reach this target and are adapting their machines in order to give them a kick-start in certain countries with China at the forefront of their campaign.
Qianjiang General manager Guo Dongshao announced “We are pleased to collaborate with Harley-Davidson, we have proven manufacturing capability and experience in China, and we are committed to improving the experience of motorcycling for riders in Asia.”
This new product will be the only Harley-Davidson branded motorcycle not manufactured at its own factories. The Milwaukee-based constructer said that regardless of the small size the motorcycle will be a premium product in China and will look and sound unquestionably like a Harley-Davidson. It is due to be unveiled by the end of 2020.
Matt Levatich, president and CEO, Harley-Davidson commented on the partnership “Harley-Davidson has always been about inspiring riders around the world. Our 'More Roads' plan is all about bringing our brand of freedom to more people, in more places, in more ways. 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.”
In 2018 Harley-Davidson reported that they expect industry-wide sales of smaller bikes in Asia to experience growth of around 6% a year until 2022, while at the same time expecting sales of many sorts of motorcycles in the U.S. to decline steadily over that period.
Regardless of this Harley plans to find new riders in America with dozens of new models scheduled to debut through to 2027 including its first all-electric motorcycle.
Last June HD announced that it would transfer more motorcycle manufacture overseas to avoid the European Union duties that were applied in response to the Trump administration tariffs on imported steel and aluminium. The company said motorcycles sold in Europe would be manufactured at its Thailand factory. Harley-Davidson still plans also to make motorcycles at that plant for sale in China and other Asian nations. This has quite naturally annoyed President Trump and the relevant trade unions who have accused HD of giving up on US manufacturing.
Industry insider Deng Jiang reported “Qianjiang is considered to be a perfect fit for Harley-Davidson due to their expertise in the Chinese domestic industry and successful handling of the Benelli brand and friends at Qianjiang have told me that Harley will be utilising the Benelli dealerships and outlets as well as the ones fronted up Qianjiang. The fact that Qianjiang will be manufacturing these is important because we have seen purely marketing partnerships fail before, the one that springs primarily to mind is that of the partnership between MV Agusta and Lifan, it really didn’t go anywhere and Lifan were accused of not putting in the effort and attention required for such a partnership. The difference with this partnership (Harley and Qianjiang) is that Qianjiang have a far more vested interest in the project as they actually produce the bikes, not only that the fact that they will be smaller and cheaper whilst retaining many of HD’s famous features will be a big boost to sales performances. Years ago Chongqing giant Zongshen negotiated a deal to partner with Harley and deal with their marketing and dealership network but this all fell down as HD insisted on having too much control in a move that severely irritated Zongshen and caused the deal to fail; the control that Qianjiang has over the whole process means that it is unlikely to have the same problem.”
In the past it has been well documented that Harley-Davidson was scouting for a strategic partner in India a country which is one of its higher priority target markets, and was working on a new 500cc-1200cc middleweight motorcycle to attract a brand new set of consumers. However, despite its legacy and iconic brand standing, Harley-Davidson has been struggling to sustain growth and as a result has seen a drop in its revenues in the past three years. Now, this cooperation with Qianjiang Motorcycles could be a game-changer for the American icon.