NEW DELHI: In a move that is expected to provide much-needed respite to the dealers and customers of Harley Davidson in the country, Hero MotoCorp has inducted 10 dealers of the American bike maker into its own distribution network.
Several people aware of the development told ET that Hero MotoCorp has done due diligence of all the Harley dealers in the country, and has already signed around 10 of them. These contracts with Harley dealers will come into effect from January 1.
“Hero MotoCorp has acted swiftly to quickly rope in several of the Harley dealers, much ahead of the December 31 timeline when the contract of the dealers with Harley comes to an end. This is a positive development for Harley dealers as well as Harley bike owners in India,” a highly placed industry veteran close to the developments told ET. “Hero is very focused on this new line of business and is ensuring that everything happens very smoothly.”
Hero MotoCorp declined to comment.
India’s biggest bike maker, industry insiders said, is gearing up for a smooth transition that will give a leg-up to its uptrading journey. Over the past few years, Hero has launched a series of products in the premium segment – including the X-range of motorcycles – and has been ramping up the look and feel of its customer touch points to provide a premium experience to its customers. “Hero is keen to ensure that no Harley customer is faced with any issue with regard to services and spares,” said a second person in the know.
In September, Harley Davidson announced its exit from India as part of its global strategy. The company soon after announced an alliance with Hero MotoCorp for sales, aftersales and new product development in India.
Since the announcement of Harley Davidson’s exit, however, the company’s existing dealers have repeatedly voiced their dissatisfaction with the compensation package offered by the company. Their contracts with Harley run until the end of 2020.
“The decision of the Harley dealers to join the network of Hero MotoCorp will provide a much-needed respite to the dealers. At the same time, this is also reassuring for the Harley customers who were uncertain about the continued service and the availability of spare parts,” he added. Harley Davidson has 22 dealer partners across 33 touchpoints in India. In its 10-year play in India, the company has sold around 27,000 units.
The Hero-Harley arrangement is expected to be beneficial for existing and potential Harley Davidson customers in India, as Hero’s extensive distribution and service network, spread throughout the country, would provide them a hassle-free ownership experience.
“While for Harley the partnership will serve to keep alive its brand and take care of existing users in the Indian market, for Hero the benefits will accrue from knowledge-sharing,” said V G Ramakrishnan, managing partner at Avanteum Advisors LLP. “The company will get access to technology to develop a range of premium motorcycles, which will help it challenge the likes of Royal Enfield.”