Harley-Davidson is to sign a distribution partnership deal with Hero MotoCorp this week, just three weeks after it announced that it will end its sale and manufacturing operations in India.
As per the deal, Hero would become the exclusive distributor for Harley Davidson in India and the bikes will be imported from Thailand.
It is said that the deal talks have been going on for a while now and the reason for prolonged negotiations is that Hero wants the collaboration to allow sharing of technology for a middleweight motorcycle and not just be a distribution partnership.
However, at the outset, the deal would focus only on the management of Harley’s 33 outlets in India and sale of its motorcycles.
If Harley-Davidson Hero Partnership works well, then the American brand would be open to a technology sharing pact or even a contract manufacturing deal with Hero.
Also, the Milwaukee-based bike manufacturer is keen to conclude the distribution agreement by October-end. This, it hopes would help keep its dealers and rider community in India calm for the time being, since queries about future operations are mounting.
Also, if the distribution pact is not finalised by the end of the year, then Harley has promised dealers to renew service contracts as well.
Hopefully that might prove enough for Harley’s dealers to get rid of their unsold inventory, save their showrooms and keep their staff on the payroll. If it does not, dealers are said to be considering legal options to put pressure on the company.
Harley-Davidson Hero Partnership
- Harley-Davidson and Hero to sign distribution deal this week
- The partnership will see Hero become Harley’s sole distributor
- But, Hero wants a technology sharing pact added to the mix too
Source – CNBC-TV18.com