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 advised Reuters.
The Milwaukee-based firm mentioned on Thursday it should cease gross sales and shut its manufacturing plant in India, successfully abandoning the world’s greatest bike market after a decade of unsuccessful efforts to realize a foothold.
Harley, nevertheless, is in talks with Hero over a distribution association that can permit the Indian firm to import and promote Harley bikes as its sole distributor, two sources with conversant in the talks mentioned.
“Hero would be the grasp distributor for Harley bikes in India … This will likely be a partnership, a strategic alliance,” mentioned one of many sources, all of whom declined to be named because the discussions had been personal.
Discussions are additionally ongoing to let Hero change into a contract producer for no less than one Harley bike with 300-600 cc engine capability, which it should launch later, the primary supply added.
The monetary particulars of the deal weren’t instantly clear.
Requested 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 prospects.
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 should shut as a part of its restructuring.
Harley’s determination 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 international corporations to ramp up native manufacturing. Ford Motor and Normal Motors have each reduce their India operations in recent times.
Harley, identified 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 usually sells bikes with engine capability of beneath 200 cc and a cope with Harley will enhance its entry into the mid- and high-engine market favoured by biking fans and style conscious youthful riders, the second supply mentioned.
Harley’s 33 dealerships will possible come beneath Hero’s administration beneath the brand new association, mentioned one of many sources.
In an announcement on Friday, the Federation of Vehicle Sellers Associations (FADA) in India criticised Harley for not informing sellers about their India plans.
“It goes with out saying that sellers who’ve invested their hard-earned capital on this iconic model are left like an deserted child with none compensation bundle,” FADA mentioned.
