Harley's Entry into China and India Sets Groundwork for Future Success

Q4 international sales for Harley Davidson (HOG) were up 17% and the company now has its sights set on blowing past that number. India's commerce ministry has now agreed to recognize European engine emission standards for motorcycle engines exceeding 800 cubic centimeters, a standard Harley's bikes already comply with. The door is now open to sell their bikes in one of the world's most populous countries. One hang up, a 60% tariff a various other taxes that cause the price of the bike to double. Harley is seeking a reduction in the tariff to 10%, a level comparable to other imported items in the country. They report having "regular contact" with government regulators on the subject.

Harley spokesperson Bob Klein said "this is step one". Already entering the Chinese market and with sales in Latin America and Europe very strong, HOG has proven its brand will sell very well outside the US.

While neither the China nor India ventures will contribute meaningfully in the near term bearing a blockbuster move, the groundwork is being set for explosive results down the road. Results, it should be noted, that will continue to be strong for decades given the populations of both countries.

Disclosure: Long HOG.

Comments

[Ames Tiedeman:]

One can properly predict that HD will do quite well in China.

2008 Mar 14 12:04 PM