American motorcycle maker Harley-Davidson has finally found a partner to make smaller-displacement capacity bikes; and it is a Chinese company – Zhejiang Qianjiang Motorcycle.
As per official documents for the long-term co-operation agreement that our sister publication, Autocar Professional, has access to, the partners are looking to explore business opportunities starting with the Chinese market, while also expanding to other Asian markets.
The two companies plan to develop two motorcycles – the first of which is a 338cc bike. They will also manufacture other-displacement motorcycles, cooperate in equipment and supply-chain optimisation, and extend their partnership to other Asian markets in the process.
Despite Harley-Davidson’s legacy and iconic brand standing, the brand has been struggling to sustain growth in the country and as a result, has seen a drop in its revenues overthe past three years. This partnership with Zhejiang Qianjiang Motorcycle could be a game-changer for the American major.
While not much is known about Zhejiang Qianjiang Motorcycle, it's interesting to note that Chinese car major Geely has a majority stake in it and that Qianjiang also owns the Benelli brand of motorcycles.
As per the agreement by the two bikemakers, Harley-Davidson and Zhejiang will “cooperate for Asian markets – namely Thailand, Indonesia, Vietnam, Philippines, Malaysia, Japan, India and Australia. The aforementioned 338cc motorcycle will first go on sale in the Chinese market by end-2020 and will be manufactured by the Asian bike maker, which is essentially to ensure the product is competitively priced.
Qianjiang will be responsible for purchasing parts as per the relevant specifications and will assemble it at its Wenling factory. It will also be responsible for getting Chinese certification, so that the new made-in-China Harley-Davidson models can be sold in the domestic market.
This four-year pact between the bike manufacturers sees some exceptions, though. Both partners have agreed to cooperate in development of ICE-engine two-wheelers but there has been no formal agreementwhen it comes to their electrification strategy.
On the Indian front, since Qianjiang also owns the Benelli brand and has an operational tie-up in India with Mahavir Group, a pre-existing joint-venture in India – where the Chinese company provides parts to manufacture, assemble and sell Benelli motorcycles in India –will not be considered a violation under the agreement.
What's more, to avoid any potential conflict in the electric mobility segment, if Qianjiang plans to manufacture any electric two-wheeler with a Harley-Davidson competitor, the American company will get priority co-operation rights over the same.
Lastly, Harley-Davidson will also get exclusive rights to utilise Qianjiang's retail presence. The Chinese brand will also create a separate Harley-Davidson sales area within the company's selected premium point of sale, where Harley-Davidson can choose to use the selected retail distribution point (shared sales point). It could also have a separate sales operation at the selected point of sale, which can be accessed through a separate entrance.
Harley-Davidson also plans to utilise the Benelli retail distribution point when sharing the point of sale, in addition to Qianjiang's other retail distribution points.