Hero MotoCorp on Tuesday announced a distribution deal with Harley-Davidson to the Indian market, allowing the protagonist to sell and service the Harley motorcycle domestically.
“Under the distribution agreement, Hero MotoCorp will sell and service the Harley-Davidson Motorcycle, and will drive parts and accessories for the Harley-Davidson dealership network and the Hero’s existing sales network in India, as well as for the sale of spare parts and accessories. Under the license agreement, the hero MotoCorp will develop and sell a range of high-end motorcycles under the Harley-Davidson brand, ”the company, led by Pawan Munjal, said in a regulatory filing today.
The deal backs Harley’s September Rewire plan to change its business model in India.
“The deployment is mutually beneficial for companies and riders in India as it combines the famous Harley-Davidson brand with the powerful distribution network and customer service of Hero MotoCorp,” the company added.
Earlier this year, Pawan Munjal, chairman of Hero MotoCorp, also indicated that he had reached an agreement with Harley Davidson on the production and sale of high-end motorcycles in India.
The Harley-Davidson Motor Company decided to withdraw from India in September, and its launch has put the curtain on the lucrative market of the two-wheeled market.
After 11 years of operations in India, Harley has said it will cease sales and production operations in India as part of its global restructuring plan.
The company has previously hinted at withdrawing from some challenging markets as part of its strategic plan, with the plan to withdraw from the loss-making market and focus on parts of the United States, Europe and the Asia-Pacific region.
The world’s largest and price-sensitive two-wheeled market has struggled with a sharp decline in production and sales in India.
India’s production fell from 11,753 units in FY16 to 4,533 units in FY20 and sales fell from 4,708 units to 2,470 units in the same period last year.
Harley-Davidson’s share of pre-sale profits has risen to 13%, with CEO Jochen Zeitz’s move to cut costs and increase low-income earnings in the third quarter.
Meanwhile, Harley-Davidson reported a 9.8% decline in quarterly earnings on Tuesday as global motorcycle demand failed to hit the trade due to the COVID-19-induced lockdown.
Revenue for motorcycles and related products fell to $ 964 million in the third quarter, ending Sept. 30.
