The sources revealed that the two companies are on the verge of concluding a deal that would expand their current partnership, which currently revolves around a single model. The agreement may also encompass the production of Harley-Davidson models for export to other markets, they added. An official announcement is expected to be made within the coming weeks.
The premium motorcycle market is experiencing growth, and Harley-Davidson executives have expressed their contentment with the joint venture with Hero, the people quoted above said. Currently, Hero MotoCorp produces the X-440 range at its manufacturing facility in Neemrana, Rajasthan.
Harley Davidson in India
In October 2020, Harley-Davidson and Hero MotoCorp entered into a licensing agreement, granting India’s top two-wheeler manufacturer the rights to produce Harley’s X-440 model in India.
Additionally, under a distribution agreement, Hero has the authority to sell and service motorcycles, as well as offer parts, accessories, general merchandise, riding gear, and apparel through a network of exclusive Harley Davidson dealerships and Hero MotoCorp’s existing dealership network in India.
Harley-Davidson, the iconic American motorcycle manufacturer established in 1903, made the decision to cease production operations in India in 2019 due to low demand and sales, primarily caused by high import tariffs that rendered its products uncompetitive in the market.
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In 2020, Harley-Davidson entered into a partnership with Hero MotoCorp, enabling the local development of its products at more competitive prices. Hero MotoCorp also introduced its own version of the X-440 under the Mavrick brand name.
During the previous fiscal year, Hero MotoCorp sold a combined total of 14,837 units of the X-440 and Mavrick models. The company has already secured the third position in the premium motorcycle segment in India, with engine capacities ranging from 350 cc to 500 cc, trailing behind Bajaj Auto and Royal Enfield.
Encouraged by the positive response from Indian consumers to the motorcycles co-developed on the 440cc platform with Harley, Hero increased the production capacity of these models to 10,000 units per month in March, up from 6,000 units in January.
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“The market for roadsters is 800,000 units, and is growing,” Niranjan Gupta, CEO of Hero MotoCorp, had said in a recent interaction. “It should touch a million units in the next couple of years. The potential (in the segment) is huge,” he had said.
The X-440, the first product jointly developed by Harley-Davidson and Hero MotoCorp, is priced at approximately Rs 2.4 lakh. It aims to challenge Royal Enfield’s dominance in the premium bike category, where operating profit margins are significantly higher compared to sub-250 cc segments.