Harley-Davidson has struck a deal with China’s Qianjiang Motorcycle to produce a smaller bike despite the current trade situation between the United States and China.
Harley-Davidson Breakout Motorcycle 2019 | Photo credits: Harley-Davidson
Just recently, it is announced that American top gun Harley-Davidson will be partnering with China’s Qianjiang Motorcycle to build a new motorcycle. The new bike will be much smaller compared to its trademark ‘big hogs’. This is a plan to move more production outside the United States, considering the current situation within the nation and the growing demand for smaller bikes. Last year, US President Donald Trump had threatened to impose higher taxes on Harley-Davidson after the firm decided to move production for European customers overseas. This was part of a longer-term strategy for dealing with lower sales in the US and higher costs because of trade tariffs.
The Reason Behind the Harley-Qianjiang Partnership
Harley-Davidson LiveWire | Photo credits: Reuters
The new partnership comes with the objective of getting more involved in China’s huge bike and moped market. It is also in tandem with its aim to cut costs. This would also expand its sales outside the United States by 2027. The firm has settled on production to be in Qianjiang. The firm is owned by Chinese Volvo brand operator Geely, which has vast experience in developing smaller bikes. The Asian market is known for being one of the biggest customer bases for the firm. However, due to its range of large bikes, it is unable to cater to the consumers. With the new smaller bike, there is a huge potential for the firm to thrive within the growing demands for lightweight two-wheelers.
Harley to Create Bikes Out of its Comfort Zone
Photo credits: The Hindu
According to sources, the new bike will be featuring an engine displacement of 338 cubic centimetres. This would be one of the smallest in the company’s entire history. Sales for the bike will begin from the end of 2020. This is much different from Harley’s usual range of bikes. The American company has been making bikes with engine capacities of more than 601 cubic centimetres. The prices of the bikes have also reflected its large displacement.
“The international motorcycle market is huge, but Harley-Davidson has not been able to penetrate it with large/expensive bikes,” said Craig Kennison, an analyst with brokerage Baird, as quoted from the St Louis Post-Dispatch.
Photo credits: Harley-Davidson
“Our recent dealer survey work reinforces the need for Harley-Davidson to add more first-time riders. For many, affordability is an issue.” As for the price, Harley has declined to reveal the information. Although, it is for certain that it will be within an affordable price range. After its launch in China, the firm will introduce the bike to other parts of Asia. Harley-Davidson is expecting to spend approximately $675 million-$825 million over the next four years. With their plan “More Roads to Harley-Davidson”, the firm also aims to generate $5.9 billion-$6.4 billion in revenue in 2022.
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