Harley-Davidson Inc is in superior talks with Hero MotoCorp for a distribution deal which is able to permit the US firm’s bikes to be offered in India, after it stops native manufacturing there, three sources instructed Reuters.
The Milwaukee-based firm mentioned on Thursday it can cease gross sales and shut its manufacturing plant in India, successfully abandoning the world’s largest bike market after a decade of unsuccessful efforts to achieve a foothold.
Harley, nevertheless, is in talks with Hero over a distribution association that may permit the Indian firm to import and promote Harley bikes as its sole distributor, two sources with aware of the talks mentioned.
“Hero will be the master distributor for Harley bikes in India … This will be a partnership, a strategic alliance,” mentioned one of many sources, all of whom declined to be named because the discussions have been non-public.
Discussions are additionally ongoing to let Hero change into a contract producer for at the very least one Harley bike with 300-600 cc engine capability, which it can launch later, the primary supply added.
The monetary particulars of the deal weren’t instantly clear.
Asked about talks with Hero, a Harley spokeswoman mentioned the corporate wouldn’t touch upon hypothesis. On Thursday, it mentioned it was altering its enterprise mannequin in India evaluating choices to proceed to serve clients.
Hero MotoCorp, India’s largest two-wheeler producer by gross sales, additionally declined to touch upon market hypothesis. It produced 6.Four million two-wheeler scooters and bikes within the fiscal yr ending March 2020, a 3rd of India’s complete output.
Harley manufactured 4,500 bikes throughout that interval, largely assembled from imported knock-down kits at its plant close to New Delhi, which it can shut as a part of its restructuring.
Harley’s resolution to cease direct manufacturing marks one other main exit by an automotive participant in India and is a setback for Prime Minister Narendra Modi, who has invited overseas companies to ramp up native manufacturing. Ford Motor and General Motors have each reduce their India operations in recent times.
Harley, recognized for its heavy touring bikes, struggled in India primarily due to excessive import duties – which U.S. President Donald Trump usually criticized India for – and likewise as a result of its regionally assembled bikes confronted excessive taxes.
Hero sometimes sells bikes with engine capability of below 200 cc and a take care of Harley will enhance its entry into the mid- and high-engine market favoured by biking fanatics and style aware youthful riders, the second supply mentioned.
Harley’s 33 dealerships will seemingly come below Hero’s administration below the brand new association, mentioned one of many sources.
In an announcement on Friday, the Federation of Automobile Dealers Associations (FADA) in India criticised Harley for not informing sellers about their India plans.
“It goes without saying that dealers who have invested their hard-earned capital in this iconic brand are left like an abandoned baby without any compensation package,” FADA mentioned.