Harley-Davidson in China

[GJN]

interesting article

[ChinaV]

Say what you will about Harley, but they're probably doing more than any other motorcycle manufacturer to get bikes on the road in China. Instead of being content with access to a bunch of wealthy consumers, they are calling the Chinese government out for their unfair trade barriers and stupid outdated regulations.

Guangzhou/Shenzhen has just as much, if not more, wealthy folks than Shanghai/Beijing and a 12 month riding season. Frustrating that we will probably never get dealerships down here.

Cheers!
ChinaV

[Pal]

Guangzhou/Shenzhen has just as much, if not more, wealthy folks than Shanghai/Beijing and a 12 month riding season. Frustrating that we will probably never get dealerships down here.

Pearl River Delta has HD coming soon, nuff said. Ride safe! PAL

ps: a new HD dealership opened in Suzhou a couple of weeks ago.

[euphonius]

...Hmmmm ... I guess my farmer Honda 125 just doesn't cut it in terms of "cool". Oh well, as the original Honda ads used to say ... "you meet the nicest people on a Honda".

Hey, I'd love to have some Jialing "bling" -- but I'm not holding my breath, given their near total neglect of their own loyal customers.

And I totally agree with ChinaV about H-D's efforts. I actually spent a day with their then-MD for Asia, Steve Wasser, to discuss ways of working together to foster a culture of responsible and safe recreational motorcycling. Would still love to play a role in this space. Alas, Wasser returned to the US last spring.

cheers!

[Lao Jia Hou]

Yup - no doubt Harley is lobbying for opening up the market. In fact, a riding buddy gave me some inside info about the US Embassy taking up Harley's case.

As a HDMC shareholder, a Harley owner, and a HOG member, I hope Harley is successful. But Harley's advocacy is purely a bottom-line motivation, rather than any altruism for us lowly motorcyclists. We just get the collateral benefit if foreign manufacturers are successful.

Harley isn't the only game in town, and there is a lot of advocacy happening from other manufacturers. Polaris, for example, is very keen on entry (its ATVs are here, and Victory is expected next year). Polaris has very deep pockets. It dwarfs HDMC, although Victory bike sales are a tiny fraction of Harley's. The big Japanese manufacturers are also doing their parts, albeit with quiet pipes.

I read somewhere that Ducatti just had a big dealer opening party somewhere in GD, maybe GZ?

Yeah, I'm like you Mr Euph ... I'd love to get one of those Jialing jackets ... I've been asking anyone & everyone for one, to no avail. Seems I am not "in the club."

[MJH]

I would have liked to seen HD reinvent itself for the Chinese market, their effort to change the perceptions in china are more offensive then flattering. It all comes off as opportunistic whoring, selling huge bikes one at a time and for ridiculously high prices.

The market in china is small sized bikes, something HD executives totally cannot embrace.

Which is a shame, they should be designing and building singles for the Chinese market in the Chinese market.

Not that they have to make Hummers or Pacers, they certainly should avoid bringing back the Scat as a model name, but they really should have seized the opportunity to venture back into singles and small engine, that look old but incorporate modern technology into them.


I would not recommend hard tails either, but they should have engineers that could capture the look without compromising comfort and functionality.

They could have brought back the M50 in china,





They also could have brought back the Topper


Who is it that prevent such a initiatives is it that they are afraid of loosing the Hells Angles or Pagans as clients? I was told that some dealers, actually many of them refused to offer the Buell line, when it was offered. Refused to attempt to gain a new clientele or were afraid of the interaction outside the fold? Makes me wonder if they run subliminal suggestions in the classic rock they play at the dealers? “real men only ride a Harley”?

[ChinaV]

Surprised to see such a closed minded an uneducated post from you MJH, you usually have much better insight.

The market in china is small sized bikes, something HD executives totally cannot embrace.

How much time have you spent in China riding with enthusiasts and bike clubs? I've been to many gatherings in Guangdong with well over 3000 bikers…90% riding 600cc or larger bikes. There are at least 100,000 enthusiasts in China that do not fit your "China market" view. Harley, Ducati, BMW etc. have a much better shot at those 100,000 consumers than the Japanese companies as their products are more unique and I think the Chinese tend to prefer non-Japanese products in the luxury market.

Which is a shame, they should be designing and building singles for the Chinese market in the Chinese market.

China has more than enough crap singles to choose from. I suppose you think Rolex should be making a Casio knock off for the market here and Prada should be making plaid rice sacks instead of fancy leather purses?

Who is it that prevent such a initiatives is it that they are afraid of loosing the Hells Angles or Pagans as clients?

Shareholders that demand growth are the ones responsible. Harley was not doing well as a result of the recession and maybe the choice they made to let the Buell line go was necessary. Most of the Harley nuts I know feel bad about it, as they loved seeing such a great product (Buell) being made in the USA.

I was told that some dealers, actually many of them refused to offer the Buell line, when it was offered. Refused to attempt to gain a new clientele

Some dealers know their markets and don't have the financial resources to hold such expensive inventory on the floor. I remember years ago being told by my Honda rep that I had to take 2 PC800's if I wanted 12 CBR600's. We lost over $1000 USD in interest payments per unit, as each of those PC800's took over 2 years to sell. Same shit with Suzuki who would cram a VX800 or DR250SL down your throat or you wouldn't get your RM's and GSXR's. Dealers should be able to choose which bikes they sell. If the big wigs at the OEM's are so f'ing smart, then give the dealers a year of free financing on new models they are uncomfortable with.

Cheers!
ChinaV

[Lao Jia Hou]

Harley is stickin' to its knittin' ... it sells a certain product/image/ideal that is a highly refined branding. Most companies would love to have such incredibly successful branding.

And I think the HD-image might be perfect for China ...



Companies that move outside their core competencies are usually beaten back into reality. KTM, for example, did this non-starter ...



One thing I find interesting about Harley is how it is recently going after the female rider, in an effort to bring more into the family.

[ZMC888]

What China V said, +1.

Usually I am not much of a HD fan, although I do have a massive soft-spot for their XR1200, and approve of, and admire their attempts to open the Chinese market for motorcycles. Thank you.

Although they could think about adding a 250cc V-twin bobber to their line-up, and really it should be made in the USA, however multiple market regions (eg South America, Africa, central and East Asia) could have their own versions same as the Yamaha YBR250 or Fender Stratocaster or Gibson Les Paul, but this is a serious stretch and a massive gamble.

[MJH]

They are just whoring the market as it is, they are capitalizing on the exclusivity caused by the regulations and tariffs. That takes the product way above the median income into upper incomes and for sure in china numbers are always larger as a proportion. So they are mitigating the low ROE from slow sales in the USA and other markets by making more profit on what is currently very small unit sales in China, but highly profitable.

So they are marketing what is an average product, not a great product because Harleys are not that great a bike, not that fast not even that well made.

That does not inspire me as an investor, unless something changes the forecast for sales is not that high and limited by the number of people willing to pay that much for one. The demand for larger bike is there but I wonder how much there is at the current prices, that has an actual real limit.


The majority of total motorcycle sales are in the current market, as it is, are small models represent the largest part of the market. They could sell into that if better made and better supported, but HD is not notorious for that are they? They are not poorly supported, but they are not consider bullet proof , they are buggy and quirky, actually a lot of them come off the lines with engineering flaws, they have the balls to call it character, as in it gives the bike character. They do not have the people that can do that, they are not offering much in new technology, they never really have.,

They could in an alternative world actually invest in china and develop its market at the level it is at currently. But they cannot, they are inherently limited or self limiting.

The perception of Japanese quality in china may be an indirect result of the many Japanese/Chinese joint ventures. The products bearing the Japanese brands are often made in china and have the same quality issues do to the in common factors, low pay and over worked and lack of diligence in addressing that in the hyper fast hyper competitive market.

Harley is moving towards the Orange County Chopper business model, making less and raising the price. The end point of that is making one at a time and charging outrageous prices, in china that is what they are doing, actually they just offer small unit sales at very high prices. They may have a much larger potential market there but its limited with the current prices. Actually that is were Buell is today, separated from HD they became a specialty shop only offering one very expensive model to a few.

HD would never open a factory in china to make the larger bikes, they could though buy into a manufacture there and produce a line under its current offerings. But that would be in an alternative reality, they are not Honda they do not have engineers that can build jet engines, good thing Honda executives are not afraid of venturing out of the box.

I do not see HD as a good thing, the only American motorcycle manufacturer and so limited.