Every two or three months, Marc McAllister comes to India. For the Singapore-based vice-president and managing director at Harley-Davidson Asia-Pacific, India is one of the most important markets. This time around, however, he is here to soak himself in the roar of engines at India Bike Week, the country’s biggest carnival for bikers that begins on 19 February in Goa.
McAllister will also flag off Legend on Wheels, a mobile dealership custom-designed by Dilip Chhabria. It will showcase Harley-Davidson’s model line-up, merchandise and accessories, and help the firm reach out to potential buyers in towns and cities where Harley doesn’t have a presence.
He says the country’s leisure motorcycle (those with an engine displacement of 600cc and above) market has been expanding at a brisk pace since the company entered India in 2010. The market is going through a transitional phase and an initiative such as this is part of a larger strategy to take the company’s presence in India to the next level.
McAllister also talks about the company’s experience of making in India, the challenges and opportunities. Edited excerpts from an interview:
How was the year 2015 for Harley’s Asia-Pacific operations, and what lies ahead?
The Asia-Pacific region accounts for 11% of our global sales. In 2015, it was a growth region, with sales advancing 7.3% over the last year. Harley’s corporate strategy is to lead in every market we are present in and we do that really well in Asia-Pacific. We are market leaders in India, New Zealand, Australia, Japan and a few countries in South-East Asia. We are investing 65% in our marketing-related expenses and 35% more in our product development globally. In India, we have been growing the leisure motorcycle market every year since 2010. We now have 21 dealers in the country and we will continue to enhance our reach.
What has been the impact of the global macroeconomic headwinds on Harley?
The year 2015 was a tough one and the macroeconomic climate did impact us. Being a dollar-denominated brand, it impacted us across regions, but as far as sales growth is concerned, it hasn’t impacted us in a significant way. Japan and Indonesia were weak last year, but the overall growth was strong, led by Australia and other markets.
Your India sales have been depressed lately.
We ended 2015 with 12,000 units and continue to lead the segment with a 67.5% market share. While the headline growth may not be impressive, macro numbers are. You have to appreciate it is on a large base. The market in India is in a transitional phase—it was very opportunistic and prospecting till three years ago; it’s a lot more mature today. We grew our customer base by 50% last year.
What has been the response to the Street 750—the cheapest, made-in-India model in your line-up that went on sale in 2014.
We have got a very good response to the Street. The Indian consumers simply love the product. It allows our product to be more and more accessible as people can enter the Harley very early in their lives, they don’t have to wait to own a Harley.
What has been your experience with India’s supply chain (auto components sector) while making high-end bikes?
We are ahead of the slogan and have been making in India since 2010. I have worked on three different continents in this company, with three different factories. Our strategy has always been to work with the best of suppliers to deliver the quality of Harley-Davidson’s standards. We had to work closely with suppliers here. The outcome was beyond our expectations. They have been delivering quality parts as per our specifications. Make in India is a fantastic, strategic step for us and continues to be a platform to build our future.
Are there plans to make any fresh investments in India?
We are not looking to invest in plants but in the Harley-Davidson experience. We are investing in training centres for better aftersales and services. We are also relocating our office to Gurgaon as we are growing our business and need to enhance footprint. We are investing in Legend on Wheels, which will deliver the dealership experience on wheels. This will ensure that we are able to reach out to more cities. It’s a custom-designed vehicle done by Dilip Chhabria which offers the complete experience of the merchandise and accessories to more towns in Indian cities. We have invested in plants and dealers, and developing the leisure motorcycling culture. We are now dialling up the game, reaching out to more and more people.
There were some braking issues with the Street 750 (globally). Does the 2016 model address it adequately?
The model met all braking and safety requirements. We did get some customer feedback around the feel of the brake system. It has been improved in the 2016 model and has been received well.
The Street 750, in a way, was a departure from Harley-Davidson’s strategy. Do we see the company bringing in models cheaper than the Street?
You are absolutely right, the way the Street manifested itself was a strategic departure for Harley-Davidson but the foundation of how we got there, was not. We are primarily a customer-led organization. For the Street, we talked to young urban customers all across the planet and asked what they were looking for—from Paris to Shanghai to Mumbai—and they described the Harley-Davidson experience and we represented that in the Street. We will continue to apply a customer-led strategy to all our products.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.