After X-440, Hero and Harley-Davidson may bring more US models to India

Hero MotoCorp and Harley-Davidson Inc are set to expand their partnership to bring more models of the iconic US motorcycle maker to India, riding on the overwhelming response to the X-440, multiple people aware of the negotiations told ET.

The two companies are close to finalising an agreement to broaden their existing partnership, which is limited to a single model, the sources said. The pact could also include manufacturing of Harley-Davidson models for export to other markets, they said. An announcement is likely within weeks, they added.

Hero MotoCorp and Harley-Davidson did not respond to ET’s queries until press time on Sunday.

The market for premium motorcycles is growing and Harley-Davidson executives have stated their satisfaction with the Hero joint venture, people cited above said.

Hero MotoCorp already manufactures the X-440 range at its Neemrana facility in Rajasthan.

A licensing agreement signed between Milwaukee-headquartered Harley-Davidson and Hero MotoCorp in October 2020 gave India’s leading two-wheeler maker the right to manufacture Harley’s X-440 model in India. Under a distribution agreement, Hero also has the rights to sell and service motorcycles and also sell parts and accessories and general merchandise, riding gear and apparel through a network of brand-exclusive Harley Davidson dealers and Hero MotoCorp’s existing dealership network in India. The legendary US motorcycle maker founded in 1903 had decided to stop manufacturing operations in India in 2019 because of poor demand and sales, largely due to high import tariffs that made its products uncompetitive. It struck an agreement a year later with Hero MotoCorp which could locally develop its products at more attractive prices.

Hero MotoCorp also sells its own variant of the X-440 under the Mavrick brand.

Hero MotoCorp sold 14,837 units of these two models – X-440 and Mavrick – in the last financial year. It is already the country’s third-largest seller of motorcycles in the premium segment with engine capacity greater than 350 cc and lower than 500 cc, after Bajaj Auto and Royal Enfield.

Given the strong response from Indian consumers to the motorcycles co-developed on the 440cc platform with Harley, Hero ramped up production capacity of these products to 10,000 units per month in March, from 6,000 units in January.

“The market for roadsters is 800,000 units, and is growing,” Niranjan Gupta, CEO of Hero MotoCorp, had said in a recent interaction. “It should touch a million units in the next couple of years. The potential (in the segment) is huge,” he had said.

The X-440 – the first product jointly developed by the two companies – is priced at around Rs 2.4 lakh, and intends to challenge the dominance of Royal Enfield in the premium bike category where operating profit margins are much higher than in sub-250 cc segments.

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