Harley-Davidson in China

China Daily article (April 19, 2013)

http://usa.chinadaily.com.cn/weekly/...t_16421845.htm

A ride high on the hog

An American icon has gained a loyal following in China


Harley-Davidson just sits back and enjoys the ride. It has done that in China for the past seven years as Chinese motorcycle companies go full throttle trying to hawk their wares using primetime TV and other advertising channels.


The US company is such a marquee name that in China it saves itself that huge expense, and in TV advertising and on highway billboards it is nowhere to be seen.


Likewise, the company's sales and revenue figures for China are absent, the company keeping them confidential, although it says the number of motorcycles sold has doubled every year since 2006.


The company entered China the previous year, at the grand age of 102. Before that its motorcycles found their way into the country through illicit channels, making it difficult to know how many there are.


On entering the country, Harley-Davidson set up a subsidiary, the only Western motorcycle company to do so; others have signed up with agencies or dealerships.


But well before the smuggling years, Harley-Davidson had a connection with China, a store in Shanghai having sold its motorcycles from the 1920s. During World War II US President Franklin Roosevelt approved the donation of 1,000 Harley-Davidsons to China for military purposes.


Last year the Chinese subsidiary launched a campaign called "In Search of the Earliest Harleys", and a collector showed a model that dates back to the 1940s.


Sean Jiang, president of Harley-Davidson China, says the only way to get an idea of how many of its motorcycles are in China is through the owners' association. A buyer automatically becomes a member of the Harley-Davidson Owners Group, and since 2006 more than 2,000 people have joined. Twenty-four models are sold in China.


HOG chapters organize many kinds of activities, the company says. The most frequent are group rides across the country, and even the world. Dealers also organize similar rides on weekends, or they bring groups to ride overseas with rented motorcycles from local dealers. HOGs and dealers, as well as Harley-Davidson China, provide safety training for the riders.


To celebrate the brand's 110th anniversary this year, the Chinese subsidiary has invited 30 owners from the US to ride in Zhejiang province next month. The Chinese company will take care of licensing, insurance and motorcycle rentals.


The brand had 11 dealers in China by the end of last year and plans to add two this year. The dealerships are not necessarily in first-tier cites, Jiang says, and the main consideration is whether the city has a motorcycle riding culture.


"Take Chongqing, for example. It has a dozen motorcycle makers and the government has good policies for motorcycles, so we set up dealerships there as early as last year."


Local purchasing power is another thing to be considered, Jiang says, as Harley-Davidsons do not come cheap. A Super Glide Custom 110th Anniversary limited edition in the Dyna Family costs more than 200,000 yuan ($32,360; 24,800 euros).


"We look at luxury car sales in the city to decide whether to set up a dealership there, as our customers tend to be in the same group."


The existing 11 dealerships are in Beijing, Shanghai, Chongqing, Suzhou, Dalian and other cities. Beijing and Shanghai have the largest Harley-Davidson colonies.


Zhang Tao, a Beijing-born businessman who has a shop that sells traditional Chinese paintings and decorations, is secretary-general of HOG's Beijing chapter.


"Harley-Davidson riders come from all kinds of professions, including lawyers, teachers and civil servants," he says.


But they have one thing in common: they are rich enough to pay 200,000-plus yuan on a motorcycle they ride only once in a while; the best Japanese motorcycle costs about half that.


For 10 years Zhang has stuck to two wheels, moving from a Yamaha 250 to a Honda 400 and then a Harley-Davidson Super Glide Custom.


"Harley-Davidson owners are mostly males between 35 and 50, senior managers or businessmen," Jiang says.

"Compared with other heavyweight motorcycles, Harley-Davidson owners are older as the brand is best-known for low-speed rides."


Industry insiders estimate that more than half the profit in the only Beijing store comes from accessories such as badges, scarves, and other gear bearing Harley-Davidson logos.


Often Western vehicle manufacturers wish to localize their production in China so they can avoid tariffs and bring down prices and gain bigger market share, but Harley-Davidson says it has no plans to produce its motorcycles in China.


It has taken 50 to 60 percent of the country's heavyweight motorcycle market, and ranks No 1 in the high-end market.

But the brand faces an unusual problem in China: restrictions on motorcycles. Jiang says those restrictions seriously curb the development of high-end brands such as Harley-Davidson.


"In the US, motorcycles enjoy the same treatment as cars, but in China, 200 out of the 2,000 cities restrict the use of motorcycles."

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And here is an industry article (An Industry Savior: Big Boys' Toys) . It has a focus on CF Moto. I couldn't find an appropriate thread (maybe one of the CF Moto people here can move it to a more appropriate place), and the article is quite long.

http://africa.chinadaily.com.cn/week...t_16422844.htm

If they still made and sold the Buell Ulysses, I would be looking seriously at Harley here too.

Im enjoying my Harley; great to own, fun to ride, and sure, nice to turn a few heads from time to time.

The local guys who own them here in Wuhan are a good bunch of fellas. Its ever so slightly Spinal Tap does Sons of Anarchy, but they're having fun and at least they've got the spirit to get a bike and enjoy being in an MC.

I agree with an earlier poster: any bike is a good bike ( just some are better then others ;)

new Harley dealership opened inside Tianijn City in April.

Attachment 11733

of course still can't ride a motorcycle inside Tianjin city.
or register a bike if your address is inside the city.
or have the dealer plate it for you (like jing B plates)

but that hasn't stopped them from selling 30+ bikes in 6 weeks.

TIC

Well stocked HD dealership in Beijing....

http://tinypic.com/r/315n4vo/5

Jesus, it's hog heaven! Pork by the ton!

Official ... the Pope has blessed Harley! Yippie! I can now officially look down on all those atheist peasants as I cruise around on my shiny Ultra ... oh wait, I'm not a Catholic. Never mind.

I had a chuckle from what the Pope stated ...

"(Pope) Francis cautioned that "power and pleasure", among other things, lead to God being "replaced by fleeting human idols which offer the intoxication of a flash of freedom, but in the end bring new forms of slavery and death."

Golly gee, I wonder what he meant? I better consult my official HD dictionary, and make notes with my official HD pen on my official HD stationary.

http://www.dailypress.com/news/break...tory?track=rss

Why, Why, Why do you feed the monkeys! You know what is now coming..............

Quote:

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Originally Posted by Lao Jia Hou

Official ... the Pope has blessed Harley! Yippie! I can now officially look down on all those atheist peasants as I cruise around on my shiny Ultra ... oh wait, I'm not a Catholic. Never mind.

I had a chuckle from what the Pope stated ...

"(Pope) Francis cautioned that "power and pleasure", among other things, lead to God being "replaced by fleeting human idols which offer the intoxication of a flash of freedom, but in the end bring new forms of slavery and death."

Golly gee, I wonder what he meant? I better consult my official HD dictionary, and make notes with my official HD pen on my official HD stationary.

http://www.dailypress.com/news/break...tory?track=rss

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I enjoy most bikes, including Harleys. But seriously, folks, just when you thought it can't possibly get any crazier in China ...

I was in the Beijing HD dealer a couple of weeks ago, and saw the new 2013 CVO Ultra, 110th Anniversary. Nice looking bike.

Anyways, the price tag was on the bike. Are you sitting down?

Base price is 588,000 rmb. After taxes, plates & insurance, the out-the-door price is 666,374.

OK, that is $108,725 (US)!

So, I am telling my buddies in the USA and, of course, no one believes me. MSRP in the States is about $36K, and people are unhappy by what many consider an inflated stateside price. Anyways, after our ride today, I went inside the Beijing dealer to take some pics ...

Attachment 13043
Attachment 13044
Attachment 13045


The orange sign on the seat says it is sold. Now, IMHO, it isn't a question of whether a person can afford it, rather it is a question of value. Seriously, pretty much everyone can afford 100 rmb for a Big Mac, but would you? I'm looking forward to meeting the new owner one day.

Another way to look at this ... if you absolutely MUST have a 2013 CVO Ultra, why not take a trip to the USA, pay $36K, and have $70K left over for six months of touring around the USA & Canada?

/shock

In some places in the US you could buy a house for $70k, including a garage for this monstrosity!

not an expert on American culture but is this hardly a double wide?

The HD sales are small, very small proportion of all sales in China They seem to like to use growth numbers, selling one then selling two….wow look 100% growth, they keep the actual unit sales numbers hidden, they are making gobs of profits on those small sales.


The top 1% can say hey if we get rid of the tariffs and restrictions and open up the markets then our collective small group looses value.


High prices keep the bikes exclusive, if they freed up the market then the values fall and the exclusiveness goes away. They would end up with egg on the face, if prices fell, the top 1% get access only and conveniently have the most influence.

Quote:

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Originally Posted by MJH

High prices keep the bikes exclusive ...

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Yeah, loud pipes scream "look at me, I'm rich, and you're not". At least in China they do.

Sent the pics to my 'Mericun buddies, and I have already received two replies claiming I had photo shopped the price tag. They absolutely refuse to believe that anyone would spend >$100K on a floor model Harley. Sigh, yet another example of nobody believing what actually goes on in China.

Quote:

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Originally Posted by MJH

The HD sales are small, very small proportion of all sales in China They seem to like to use growth numbers, selling one then selling two….wow look 100% growth, they keep the actual unit sales numbers hidden, they are making gobs of profits on those small sales.


The top 1% can say hey if we get rid of the tariffs and restrictions and open up the markets then our collective small group looses value.


High prices keep the bikes exclusive, if they freed up the market then the values fall and the exclusiveness goes away. They would end up with egg on the face, if prices fell, the top 1% get access only and conveniently have the most influence.

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HD does not make the profit... of the difference between USA MSRP and PRC MSRP... it is the PRC government that makes that profit... same as pretty much all imported 'luxury' goods in PRC.

Anyone wanna come up with a killer ride you could do if you were the proud owner of such a machine here in the Celestial Kingdom? What do you reckon: for 100K you'd want a pretty good ride before the winter set in. Lets say starting and ending in BJ.

Over a $100K for a Harley you have got to be kidding. As my friend told me don't buy a Harley you'll turn into a Ars#****. Most of the wanabes Harley riders here have a serious attitude problem and there not the 1%ers .

Harleys Don't turn Don't stop, Don't accelerate just make alot of noise.So the riders think everyone looking at them think there legends.There not there just Tools.

I could see certain groups of Chinese fitting in well in the wanbe bikers.

Rant over.

Quote:

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Originally Posted by bigdamo

Over a $100K for a Harley you have got to be kidding. As my friend told me don't buy a Harley you'll turn into a Ars#****. Most of the wanabes Harley riders here have a serious attitude problem and there not the 1%ers.

Harleys Don't turn Don't stop, Don't accelerate just make alot of noise.So the riders think everyone looking at them think there legends.There not there just Tools.

I could see certain groups of Chinese fitting in well in the wanbe bikers.

Rant over.

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Bit of an over-generalisation, but that being said, fundamentals of these sentiments can equally be applied in other jurisdictions such as OZ...

Quote:

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Originally Posted by MGAlbion

Anyone wanna come up with a killer ride you could do if you were the proud owner of such a machine here in the Celestial Kingdom? What do you reckon: for 100K you'd want a pretty good ride before the winter set in. Lets say starting and ending in BJ.

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hit every starbucks in Beijing?

Quote:

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HD does not make the profit... of the difference between USA MSRP and PRC MSRP... it is the PRC government that makes that profit... same as pretty much all imported 'luxury' goods in PRC.

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Yeah your correct, HD likely gains nothing significant off its operations in China, however the small group running the operations in China are all pulling significant salaries. There is allot of overhead for those operations there, it is possible that the operations in China take a loss or breaks even on the corporate side of HD, the value for them is bragging rights, which are not even in realty significant since the actual sales are so small.
Some people love HD and others love to hate HD…


I had a friend that was a trainer at HD, she set up dealer training sessions. When she left them she said it was the worst company she ever worked for…narrow minded and chauvinistic was her summation.


I would not be surprised if HD gets kick backs in China, look who they cater to. All they would have to do is talk about closing up there and the 1% would hand them money they would be screwed otherwise.

I am not sure how incomes disperse in China, I’ve read that they are similar to the USA a 1% earning the majority of the capital and the rest break out differently, not sure what the middle class in China earns maybe some of them earn enough to buy an HD there? The 1% in the USA are not likely riding motorcycles, here it’s a middle class bike, mostly trades people or working class labors that ride. They do not hang out at coffee houses, they hang out at biker bars though.


http://pegasusnews.com/media/img/pho...28x520_q85.jpg

Quote:

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Originally Posted by zhu

hit every starbucks in Beijing?

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:lol8:

No no no ... you got it wrong. Starbucks is for the Beemer Boys. The pirates head to Costa Coffee.

Personally, though, when I ride a HD, I sneak into a Starbucks. I guess that makes me a 1%'r. Well, the truth is ... there is a Starbucks half a block from my home.

The new owner of the >$100K bike ... I wonder what he will think when he tries to fill up with gas and they ask him for his DL and Blue Book? Nah, that'll never happen - he'll probably get some minion to deliver gas to him.

Quote:

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Originally Posted by bikerdoc

Bit of an over-generalisation, but that being said, fundamentals of these sentiments can equally be applied in other jurisdictions such as OZ...

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Yeah exactly over 30 years of watching bikers of all types and in Australia and the rest of the world the Harley phenomenon has come and gone a few times as it will in China. Just wait till the 1%ers start stealing and rebirthing all these wanbe bikers Harleys ie Accountants,lawyers, business owners etc etc. Seen it before and the the prices where alot cheaper than $100K. When those prices come into play some bad people will pop up and take advantage of the situation.

Quote:

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Originally Posted by Lao Jia Hou

:lol8:

No no no ... you got it wrong. Starbucks is for the Beemer Boys. The pirates head to Costa Coffee.

Personally, though, when I ride a HD, I sneak into a Starbucks. I guess that makes me a 1%'r. Well, the truth is ... there is a Starbucks half a block from my home.

The new owner of the >$100K bike ... I wonder what he will think when he tries to fill up with gas and they ask him for his DL and Blue Book? Nah, that'll never happen - he'll probably get some minion to deliver gas to him.

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Emm your a 1%er well yes if your other form of income are drugs,prostitution,intimidation,rebirthing and other forms of organized crime.

The 1% is a relative term, relative to what your discussing,.
The term in this content is relating to income earners, in the USA the top 1% earn 700k annually on average.
Globally though the top 1% earn above 35k annually.


Half the individuals in USA can afford an HD, 99% of the world population cannot.


I do not know who can afford and HD in China, but the top 1% there certainly can. It is also safe to say the absolute majority in China cannot…and likely never will. But the population numbers are all bigger in China, so a 1% there is significant. In China it be the top 10% of incomes that can afford the HD, maybe more?


Decadent and dickheaded, that is HD in China.

Dear MJH,

China is so far outside the US frames of reference you are describing, it's a bit hard to know where to start.

The 1% here are staggeringly rich, and it's not a function of their "annual salary" but of vast assets that they control (lots of them plundered from the state sector). Yet there are still several hundred million Chinese, a number comparable to the entire US population, who get by on $2-3/day. It's hard to make generalizations about Harley buyers here, but it's safe to say that most already have garages full of other toys -- a recent Benz or BMW saloon, a Land Rover, a Lamborghini or Ferrari or Aston Martin, three flavors of Porsche (911, Cayenne SUV, Panamera, Boxter, Paprika, Nutmeg, Oregano...), and probably a BMW or Ducati motorcycle -- by the time the go for the Harley. Lots of these guys don't obviously work at all, presumably having made their fortunes in one apocalyptic deal.

Don't forget, here in Shanghai each car license plate costs around US$12k, and a downtown plate for a bike is testing US$20k. Yep, it's more to plate your Harley (or your Jialing) than your Bentley.

Yes, there are some Harley owners who make actual middle-class salaries, and they go for entry-level bikes like the 883 Sportster. There's a small but conspicuous number of women in this category, which makes me smile. But for most of these buyers, money is simply not an object. In fact, if there were something even more expensive they'd probably be interested. The higher the price, the bigger the bragging rights after the big expedition over to Costa Coffee.

I don't think there's anything decadent or dickheaded about H-D in China. They are delivering what the market demands.

Kickbacks? It is said that H-D charges a lot more for plates than they actually cost. Not all of the inflated price is going to import duty and taxes. So maybe a bit dickheaded....

cheers!
euphonius

Quote:

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Originally Posted by Lao Jia Hou

The new owner of the >$100K bike ... I wonder what he will think when he tries to fill up with gas and they ask him for his DL and Blue Book? Nah, that'll never happen - he'll probably get some minion to deliver gas to him.

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The new owner has his bike delivered with a full tank, which should last a year or two :naughty:

Quote:

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Originally Posted by euphonius

...Don't forget, here in Shanghai each car license plate costs around US$12k, and a downtown plate for a bike is testing US$20k. Yep, it's more to plate your Harley (or your Jialing) than your Bentley.
...

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Actually, someone told me a few days ago the price of a motorcycle plate is pushing 180k RMB in Shanghai's secondary market, the only place they are available. That's just south of US$30k!

Quote:

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Originally Posted by euphonius

Actually, someone told me a few days ago the price of a motorcycle plate is pushing 180k RMB in Shanghai's secondary market, the only place they are available. That's just south of US$30k!

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You know there are people (news agencies) from outside China saying China is on the way to imploding. Hence why I hit the eject button a couple of years ago. The story you tell is another one enforcing my reason to leave among others.

I owned and rode a Harley until this very week (just sold my sportster). On a personal level the guys who ride here in Wuhan are all right. Sure they are minted, but i dont usually hold that against people. Sure they blow cash like no one's business, but again, that aint my business. And they definitely like to pose; agreed, this is less forgivable. But a good deal of them do ride out at weekends and get their faces and hands dirty.

In some ways you have to feel sorry for them. They've got the cash, but they cant seem to get no satisfaction. I reckon the rich have better lives in Euro/ N America - country houses, beach houses, beautiful roads to cruise on, etc etc.

With reference to the 1%, wasnt it a double play on the Hells's Angels and the rich 1% thing?

According to this guy the wealth in China is statistically insignificant?
Branko Milanovic

his book on the matter.

where is China?
http://i.dailymail.co.uk/i/pix/2012/...90_468x560.jpg