"Rupess Talk, Harley Listens" or "Ganesha helped build my Hog!"

[Rincewind]

Harley to open their first factory in India.  Read the story at The Kneeslider.


Milwaukee, Nov. 2, 2010 – Harley-Davidson, Inc. (NYSE:HOG) is moving forward with the launch of operations in India to assemble motorcycles for the Indian market from component kits supplied by its U.S. plants, the Company announced today. The Company expects the CKD (complete knock-down) assembly facility to be operational in the first half of 2011.

The announcement comes as President Barack Obama prepares to travel to India on a state visit focused on trade and business opportunities between the two countries.

“CKD assembly operations in India are a natural next step for Harley-Davidson as we build our brand presence around the world,” said Harley-Davidson Motor Company President and Chief Operating Officer Matthew S. Levatich. “This investment will allow us to improve our market responsiveness and production flexibility while reducing the tariff burden, which we expect will drive growth over time by making our bikes more accessible to India’s consumers. Given the strong response we have received in the initial months of retail operations, we believe this is the right investment for this important market,” Levatich said.

[bomber]

I've worked in India for three companies now . . . . .

HDI is smart enough to know they need some serious muscle on the ground for a while --

Look for Indian-assembled bikes in non-North American markets within 2 year, and in North America in 5.

[Rincewind]

I've worked in India for three companies now . . . . .

HDI is smart enough to know they need some serious muscle on the ground for a while --

Look for Indian-assembled bikes in non-North American markets within 2 year, and in North America in 5.

That's a pretty huge assumption there, bomber.  It seems from the article that the new Indian factory is to be dedicated to supplying HD's specifically for India so that they can side-step the huge tariffs.  Do you really think that Harley is destined to move assembly and/or production overseas?

[bomber]

That's a pretty huge assumption there, bomber.  It seems from the article that the new Indian factory is to be dedicated to supplying HD's specifically for India so that they can side-step the huge tariffs.  Do you really think that Harley is destined to move assembly and/or production overseas?

Well, I don't think it is, really, that huge.

First step, supply India? You bet, absolutely.

How many units do you think India will consume, yearly. (I have no idea, but I'll bet you a good dinner that it's less than that smallest factory that's worth building).

Do I think that HDI cannot/will not resist the ability to move *some* assembly and production overseas? I do --

The path I predicted is one that a number of companies have followed, some with success, others, not so much.  HDI's recent efforts to curb labor costs here in the northern USA should not be ignored as a sign of further cost consciousness, IMO.

[1KPerDay]

Curried hog, anyone?

[Rogue]

 Do you really think that Harley is destined to move assembly and/or production overseas?

I wouldn’t put it above H-D to do such a thing.  They did axe 200 jobs at Buell right?

They will claim that it’s good for America to keep H-D going by outsourcing production.  It’s all about money to H-D now that Wandel is in charge.

[Dan K]

They will likely move some assembly to India, but only time will tell.  There's definitely a big market for motorcycles in India, but I'm with Bomber - not a huge leap to think so.

Curried hog, anyone?

Nice.  

- Dan

[bomber]

I wouldn’t put it above H-D to do such a thing.  They did axe 200 jobs at Buell right?

They will claim that it’s good for America to keep H-D going by outsourcing production.  It’s all about money to H-D now that Wandel is in charge.

Of course it's all about money -- it always has been.

[ST for me!]

Fucking great, now the world will have Indian pirates...

[chornbe]

Do you really think that Harley is destined to move assembly and/or production overseas?

No.

They would lose a huge bunch of their installed user base if so. Won't happen.

This will be treated like an iconic "wholly owned subsidiary".

PS... if it would drop the price of what I consider Harley's best "bang for the buck" bike, the Superglide, to sub $10k prices... I'm all for it. I love those things.

[garry]

No.

They would lose a huge bunch of their installed user base if so. Won't happen.

Where would said installed base get their bikes from? Would the HD faithful switch to ride a Victory rather than an HD built overseas?

[bomber]

No.

They would lose a huge bunch of their installed user base if so. Won't happen.

This will be treated like an iconic "wholly owned subsidiary".

PS... if it would drop the price of what I consider Harley's best "bang for the buck" bike, the Superglide, to sub $10k prices... I'm all for it. I love those things.

Chris could very well be right -- many folks said the same when HDI sourced suspensions and electric from overseas for the first time . . . . .

My opinion is that most HD buyers fall into two camps -- the ones that buy them because they are good at thier intended missions, and the ones that are buying into a club. Neither will care enough about the country of assembly to buy a Honda, or not buy a bike at all.

But my meteoric rise to the top of a major motorcycle manufacturer seems to have stalled, so take that with a grain of salt.

[chornbe]

Where would said installed base get their bikes from? Would the HD faithful switch to ride a Victory rather than an HD built overseas?

I would think that the "premium price point" that Harleys currently sit at would be something of an insult for "Indian Crap" motorcycles. (I'm paraphrasing the Faithful here, not saying what *I* think of the bikes)

To be clear - I'm a huge fan of Harley's bikes and *I* would not buy one at current US labor prices if it was built in India or anywhere else known for its less expensive labor. I am also NOT a fan by any stretch of "the lifestyle" that has come up around Harleys - and those people are the ones who would feel flat out insulted, rejected and betrayed by Harley moving all production overseas.

Won't happen.

$.02

[bomber]

I would think that the "premium price point" that Harleys currently sit at would be something of an insult for "Indian Crap" motorcycles. (I'm paraphrasing the Faithful here, not saying what *I* think of the bikes)

To be clear - I'm a huge fan of Harley's bikes and *I* would not buy one at current US labor prices if it was built in India or anywhere else known for its less expensive labor. I am also NOT a fan by any stretch of "the lifestyle" that has come up around Harleys - and those people are the ones who would feel flat out insulted, rejected and betrayed by Harley moving all production overseas.

Won't happen.

$.02

The number of companies that have moved at least a portion of their manufacturing off-shore to take advantage of lower labor costs is large.

The number of those companies that have lost significant market share is very small.

HDI has always tried to occupy a unique slot in the motorcycle marketplace, admitted, but I'd be surprised if the labor that went into US built HDs stayed exclusively in North American.

I feel extremely confident that HDs shipped to Japan, for instance, will come from India.

[chornbe]

I feel extremely confident that HDs shipped to Japan, for instance, will come from India.

Which I personally feel compares not one iota to the question at hand - Harley's North American buying base.

Those are the people I'm talking about.

What would be funny and ironic is if HD *did* move all manufacturing off shore, people here in the US *did* stop buying them, and "The motor company" became a supplier to exclusively non-American markets. That would be funny.

[Tpoppa]

I wouldn't be surprised to see all Sportster or Vrod production moved outside the US.  HDI would just push you to buy big twin if you want a US built bike.

[Tar Snake]

Perfect place to revive Indian yet again!  

[Biking Sailor]

Typical path for U.S. manufacturers:

1. Start purchasing less costly bits and pcs from overseas.
2. Start purchasing a little more "value added" components from overseas.
3. Start purchasing/manufacturing sub-assemblies from overseas.
4. Start purchasing/manufacturing larger sub-assemblies overseas.
5. Retain "Assembled in America" as point of pride.*

* Until the Mexico plant is up and running.

Saw this happen with one of our sister companies!

[Rogue]

Chris, never say never.

GM now sources many of their entry level engines from China and stuffs them in US-made cars.  H-D has Chinese made parts too.

Back in the 1980's and before, this would have been treated as a heretic act and the brand banished by the faithful.  That kind of thinking is no longer the case.  Look at what happened with WalMart!  They used to tout Made In The USA and supported US companies that sourced their labor domestically back in the 1990's.  

How things change.

[bomber]

Which I personally feel compares not one iota to the question at hand - Harley's North American buying base.

Those are the people I'm talking about.

What would be funny and ironic is if HD *did* move all manufacturing off shore, people here in the US *did* stop buying them, and "The motor company" became a supplier to exclusively non-American markets. That would be funny.

I understand yourpoint, Chris, but the conversation has been a bit broader than that --

I stand by my guess that we'll see at least one model here (North America) in 2015 assembled elsewhere. HD has survived bigger things, and I"m betting they'd survive this.