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How Harley Davidsons Expansion In India Has Affected The Motorcycle Industry


The Harley Davidson Company has been rapidly moving into India since it first announced export of 12 of its model in August 2009. Since that time, Harley Davidson has opened dealerships and, in November 2010, began setting up its first assembly plant in the country. The expansion of the Milwaukee-based manufacturer marks a major trend of global expansion in the motorcycle industry.

After years of declining American sales and profits, motorcycle manufacturers have been looking for international opportunities. Harley Davidson's rapid move into the Indian market embodies this trend within the motorcycle industry and sets the pace for other manufacturers not looking to be left in the global dust. India has the second highest demand for motorcycles in the world. Coupled with a thriving economy and rapidly increasing demand, motorcycle sales within the country grew 25.86% between April and September of 2010. The strong growth in demand for motorcycles is not expected to decrease anytime soon.

Before Harley Davidson's entry into the market, the Indian motorcycle industry was dominated by local players. The Indian government placed strict limits on motorcycle imports. Harley Davidson spent a great deal of time and money negotiating with the Indian government to loosen restrictions on imports and on assembly plants located within the country's borders. While the work that Harley Davidson has put into opening the Indian motorcycle market definitely gives the company a first mover advantage, it also opens up opportunities for other foreign manufacturers looking to capture their share of the growing Indian market.

In this way, Harley Davidson is changing not only their strategic focus but the overall direction of the motorcycle industry as a whole. German luxury motorcycle maker BMW recently announced that it would also start selling a variety of its motorcycle models in India, through three dealerships, by the end of 2010.

Harley Davidson's expansion into the Indian market is one of several major business decisions that the company has made in recent months, all of which indicate a shifting strategic focus. Harley Davidson recently announced that it is shutting down their Buell product line. Harley Davidson also sold its high end Italian brand, MV Agusta.

All of these business decisions, coupled with the strong push into the Indian market, mark a shift in the company's strategic vision. For many decades Harley Davidson has marketed itself as a seller of recreational vehicles marked by luxury and brand prestige. However, with the move into the Indian market, the industry is seeing one of the longstanding recreational brands move into primary transportation. With people in India and other developing economies using motorcycles as everyday transportation this expansion marks a dramatic change in focus.

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