India- the new Chopper wars capital
Want to Buy a new motorcycle in India? Looking at a cruiser/ chopper? It is not the best time to buy one. Why? Read on.
Harley Davidson has been the icon of American motorcycling community since the time of inception. Harley has made inroads into the hearts of enthusiasts via an excellent marketing strategy and sale of more t-shirts than some t-shirt brands itself. 'Indian' on the other hand was the largest motorcycle manufacturer in the world when the Japanese wheels were not even born. Polaris saw the opportunity and entered the American motorcycle market with their Victory motorcycles at a time when Harley Davidson was facing quality and legal issues. What, you may think has this got to do with purchasing your motorcycle in India? Well, They all are coming to a dealership near you by 2012.
It certainly helps when Bollywood Icon Amitabh Bachhan says he is buying a Harley Davidson. A publicity stunt unmatched by any other (I have to disagree since I am a fan of Royal Enfield 'Leave Home' commercials.)
Garware motors also wants a pie of this market with the launch of the ST7, but what this Hyosung / Garware product doesn't have is legacy and appeal that a Harley Davidson, Indian, Victory or Royal Enfield has.
Royal Enfield was primarily a British icon. The bullet is reminiscent of the the pre-war times. Their ammunition business history find hint in their readapted tagline "Made like a gun, goes like a bullet" with the launch of their classic models. The company dissolved in 1971 but the Indian arm bought rights in 1995 and continued making the motorcycles. After Mr. Siddharth Lal was given the reins by Eicher India to put the company back into black, Royal Enfield has grown quite respectfully. Today Royal Enfield also has a presence in USA, Canada, UK, Germany, Middle East and other locations via signature dealerships.
The story goes a full circle now that Harley Davidson has entered India. One might not realize this to be an important step since Harley has been present in many other countries too. I wouldn't go on about how India is the fastest growing economy and it is a world superpower blah! blah! blah!. Harley-Davidson is here on an agenda. Looking at the success of Royal Enfield, they have decided to call India home. This plan wasn't made in a day but neither was it made in a decade. It all began when the Milwaukee, Wisconsin based company announced their 2009 annual results. The company was bleeding enough to dissatisfy shareholders and not last another year in all probability. Their superbike ambitions had gone horribly wrong with the purchase of MV Agusta. The American economy jumping into the well was also a major reason. The company cut off its Buell street motorcycle arm. MV Agusta was again back into Italian hands as Harley sold it off for peanuts.
Polaris owned Victory also was coming off strong since the parent company had heavy pockets. Harley's outdated designs were replaced by Victory's new flashy styles. Another big shock came in the form of the return of the world's first largest motorcycle maker 'Indian' based in massachusets. Polaris made a big dent in the media again when it announced buying 'Indian Motorcycle INC.'from UK based Stellican LLC. Polaris was definitely out to cause damage to Harley Davidson. How victory and Indian are positioned by Polaris is yet to be seen.
According to interbrand, the value of the Harley-Davidson brand fell by 43% to $4.34 billion in 2009. On April 29, 2010, Harley-Davidson stated that they must cut $54 million in manufacturing costs from its production facilities in Wisconsin, and that they would explore alternative U.S. sites to accomplish this. The announcement came in the wake of a massive company-wide restructuring, which began in early 2009 and involved the closing of two factories, one distribution center, and the planned elimination of nearly 25% of its total workforce (around 3,500 employees). The company announced on September 14, 2010 that it would remain in Wisconsin. But with growing cut-throat competition, Harley has looked east and decided to call India their home. The company launched 12 models simultaneously showing how serious they are with this market. But the real agenda is turning India into an Export hub. A similar story of how Royal Enfield transitioned to India.
This is definitely a smart move by Harley Davidson. The lower cost of manufacturing will lead to the company increasing their profit margins and reducing their retails prices denting the competition. But, Polaris industries being a bigger corporation reacted immidiately by announcing their entry into India by 2012. Definitely an Auto Expo debut then? Harley-Davidson has been smart enough to chalk out a two-throng plan here. Assuming how Polaris will react, Harley-Davidson has also setup a plan in Brazil. But it is the Indian plant that has helped them price the Superlow 883 model at 5.5 lacs, the cheapest Harley todate. This is keeping in line with Victory's cheapest model which is priced in the U.S. equivalent of 5.68 lacs.
Unlike Harley Davidson, Royal Enfield is more of a corporate arm of Eicher India similar to What Victory and now Indian are for Polaris Industries. The head team of Royal Enfield did hit back into the market last year with a retro design (first in 5 years). The company also revamped its old long-stroke single 350cc engine alongside the launch of the new 500cc engine. The bikes got proper disc brakes and button start to keep in business. While the top of the line Classic 500 model sells at a much lower price tag than the 883cc Harley Davidson, Royal Enfield needs to introduce bigger engines fast if it needs to have a bigger share of the market pie. It is safe to say that the company is in a safe position with a lower price tag (150000 INR against 550000 INR) atleast for now. But looking at the onslaught of other makers, It would be wise on Eicher to hit hard while the iron is hot.
While Royal Enfield has generally enjoyed a cult status in India in the absence of any other major cruiser motorcycles, the owners have had to live with Quality niggles. Also Royal Enfield's major chunk of revenues have come from the Indian Armed forces. The company has but been smart enough to interact with the owners and fan clubs in improving the quality and technology to build a stronger foundation. It would be safe to say that bike owners have provided Royal Enfield with a status similar to what Harley Davidson has enjoyed in the United States. But unlike Harley Davidson, Royal Enfield doesn't have a prominent and cemented sales network apart from the handful of dealers here and there.
Harley Davidson on the other hand is coming of with experience in rock music tours and sale of merchandise which the competition sorely lacks. It shouldn;t come of as a surprise if Royal Enfield languishes in their sales targets while Harley climbs the ladder steadily. Polaris is yet to enter the cut-throat market but the corporate marketers need to be better prepared to make inroads against to historic icons. Victory and Indian Motorcycle's strength lies in the big bore engines but at the same time the company lacks a small capacity engine. Unlike Royal Enfield which lacks a big capacity engine. A 600-800cc engine is rumoured to be in development at UCE, the company's engine partners. Harley Davidson is in the best situation with a larger engine range.
It remains to be seen if Polaris decided to play a dual brand strategy largely played in the car playing arena. Toyota for e.g. has Lexus and Scion, Honda has Acura, Ford has Lincoln, Gm has GMC, Chevrolet, Buick and Cadillac. Polaris may employ a similar strategy to take on both the low-end and high end or stock form and custom form of the cruiser market. Also, with the history and brand of 'Indian' (remember Burt Munro from Down under???) Polaris is now stronger than before to take the competitors on a global scale. Eicher just needs to pace up a little if it needs to stay in the race against Harley Davidson and Victory- Indian onslaught. Whatever the outcome maybe, the winner will be the Indian customer.
Harley Davidson has been the icon of American motorcycling community since the time of inception. Harley has made inroads into the hearts of enthusiasts via an excellent marketing strategy and sale of more t-shirts than some t-shirt brands itself. 'Indian' on the other hand was the largest motorcycle manufacturer in the world when the Japanese wheels were not even born. Polaris saw the opportunity and entered the American motorcycle market with their Victory motorcycles at a time when Harley Davidson was facing quality and legal issues. What, you may think has this got to do with purchasing your motorcycle in India? Well, They all are coming to a dealership near you by 2012.
It certainly helps when Bollywood Icon Amitabh Bachhan says he is buying a Harley Davidson. A publicity stunt unmatched by any other (I have to disagree since I am a fan of Royal Enfield 'Leave Home' commercials.)
Garware motors also wants a pie of this market with the launch of the ST7, but what this Hyosung / Garware product doesn't have is legacy and appeal that a Harley Davidson, Indian, Victory or Royal Enfield has.
Royal Enfield was primarily a British icon. The bullet is reminiscent of the the pre-war times. Their ammunition business history find hint in their readapted tagline "Made like a gun, goes like a bullet" with the launch of their classic models. The company dissolved in 1971 but the Indian arm bought rights in 1995 and continued making the motorcycles. After Mr. Siddharth Lal was given the reins by Eicher India to put the company back into black, Royal Enfield has grown quite respectfully. Today Royal Enfield also has a presence in USA, Canada, UK, Germany, Middle East and other locations via signature dealerships.
The story goes a full circle now that Harley Davidson has entered India. One might not realize this to be an important step since Harley has been present in many other countries too. I wouldn't go on about how India is the fastest growing economy and it is a world superpower blah! blah! blah!. Harley-Davidson is here on an agenda. Looking at the success of Royal Enfield, they have decided to call India home. This plan wasn't made in a day but neither was it made in a decade. It all began when the Milwaukee, Wisconsin based company announced their 2009 annual results. The company was bleeding enough to dissatisfy shareholders and not last another year in all probability. Their superbike ambitions had gone horribly wrong with the purchase of MV Agusta. The American economy jumping into the well was also a major reason. The company cut off its Buell street motorcycle arm. MV Agusta was again back into Italian hands as Harley sold it off for peanuts.
Polaris owned Victory also was coming off strong since the parent company had heavy pockets. Harley's outdated designs were replaced by Victory's new flashy styles. Another big shock came in the form of the return of the world's first largest motorcycle maker 'Indian' based in massachusets. Polaris made a big dent in the media again when it announced buying 'Indian Motorcycle INC.'from UK based Stellican LLC. Polaris was definitely out to cause damage to Harley Davidson. How victory and Indian are positioned by Polaris is yet to be seen.
According to interbrand, the value of the Harley-Davidson brand fell by 43% to $4.34 billion in 2009. On April 29, 2010, Harley-Davidson stated that they must cut $54 million in manufacturing costs from its production facilities in Wisconsin, and that they would explore alternative U.S. sites to accomplish this. The announcement came in the wake of a massive company-wide restructuring, which began in early 2009 and involved the closing of two factories, one distribution center, and the planned elimination of nearly 25% of its total workforce (around 3,500 employees). The company announced on September 14, 2010 that it would remain in Wisconsin. But with growing cut-throat competition, Harley has looked east and decided to call India their home. The company launched 12 models simultaneously showing how serious they are with this market. But the real agenda is turning India into an Export hub. A similar story of how Royal Enfield transitioned to India.
This is definitely a smart move by Harley Davidson. The lower cost of manufacturing will lead to the company increasing their profit margins and reducing their retails prices denting the competition. But, Polaris industries being a bigger corporation reacted immidiately by announcing their entry into India by 2012. Definitely an Auto Expo debut then? Harley-Davidson has been smart enough to chalk out a two-throng plan here. Assuming how Polaris will react, Harley-Davidson has also setup a plan in Brazil. But it is the Indian plant that has helped them price the Superlow 883 model at 5.5 lacs, the cheapest Harley todate. This is keeping in line with Victory's cheapest model which is priced in the U.S. equivalent of 5.68 lacs.
Unlike Harley Davidson, Royal Enfield is more of a corporate arm of Eicher India similar to What Victory and now Indian are for Polaris Industries. The head team of Royal Enfield did hit back into the market last year with a retro design (first in 5 years). The company also revamped its old long-stroke single 350cc engine alongside the launch of the new 500cc engine. The bikes got proper disc brakes and button start to keep in business. While the top of the line Classic 500 model sells at a much lower price tag than the 883cc Harley Davidson, Royal Enfield needs to introduce bigger engines fast if it needs to have a bigger share of the market pie. It is safe to say that the company is in a safe position with a lower price tag (150000 INR against 550000 INR) atleast for now. But looking at the onslaught of other makers, It would be wise on Eicher to hit hard while the iron is hot.
While Royal Enfield has generally enjoyed a cult status in India in the absence of any other major cruiser motorcycles, the owners have had to live with Quality niggles. Also Royal Enfield's major chunk of revenues have come from the Indian Armed forces. The company has but been smart enough to interact with the owners and fan clubs in improving the quality and technology to build a stronger foundation. It would be safe to say that bike owners have provided Royal Enfield with a status similar to what Harley Davidson has enjoyed in the United States. But unlike Harley Davidson, Royal Enfield doesn't have a prominent and cemented sales network apart from the handful of dealers here and there.
Harley Davidson on the other hand is coming of with experience in rock music tours and sale of merchandise which the competition sorely lacks. It shouldn;t come of as a surprise if Royal Enfield languishes in their sales targets while Harley climbs the ladder steadily. Polaris is yet to enter the cut-throat market but the corporate marketers need to be better prepared to make inroads against to historic icons. Victory and Indian Motorcycle's strength lies in the big bore engines but at the same time the company lacks a small capacity engine. Unlike Royal Enfield which lacks a big capacity engine. A 600-800cc engine is rumoured to be in development at UCE, the company's engine partners. Harley Davidson is in the best situation with a larger engine range.
It remains to be seen if Polaris decided to play a dual brand strategy largely played in the car playing arena. Toyota for e.g. has Lexus and Scion, Honda has Acura, Ford has Lincoln, Gm has GMC, Chevrolet, Buick and Cadillac. Polaris may employ a similar strategy to take on both the low-end and high end or stock form and custom form of the cruiser market. Also, with the history and brand of 'Indian' (remember Burt Munro from Down under???) Polaris is now stronger than before to take the competitors on a global scale. Eicher just needs to pace up a little if it needs to stay in the race against Harley Davidson and Victory- Indian onslaught. Whatever the outcome maybe, the winner will be the Indian customer.
It's been to long i have been searching some of this kinds of blog. Especially Harley's bikes.
ReplyDeleteNo need for any promotion or introduction only the name is enough.
ReplyDeleteNo one can go beyond this brand name. "Harley Davidson".
ReplyDelete