With all of the attention Harley has received setting up shop in China, seven dealers currently in place with plans for 28 by 2016, you would think, or at least hope, that Chinese riders would be running in and placing their orders. Well, not exactly. According to an article on Bloomberg.com, Harley sold 268 bikes in China last year. In the same time period, one large dealer in Milwaukee, House of Harley Davidson, sold over 500. So, one Harley dealer in Milwaukee sold twice the number of bikes purchased in all of China. Honda, meanwhile, selling scooters and bikes in the 125cc range, sold 1.25 million units.
The reasons for the slow sales are many, the first, as we’ve noted numerous times, are import duties on bikes, adding about 30% to the price and that’s before consumption and value-added taxes. The big Electra Glide Classic can sell for $53,000, while a new BMW or Audi sedan can be purchased for far less.
Another interesting rule I had never heard before is that motorcycles have to be scrapped after 11 years! You better ride a lot in those 11 years to make your purchase worthwhile.
Harleys also have to deal with lots of laws about where you can ride, many highways are off limits and noise restrictions also have an impact. Many areas consider motorcycles transportation for poor people and specifically restrict them to limit the type of people coming into the area.
Obviously, the Motor Company is just getting started, but these problems are not just getting the word out or normal marketing issues, these are policies specifically aimed at motorcycles that have to be resolved, otherwise, Harley sales will remain limited.
I understand the desire to get into the Chinese market, when any company looks at all of those people they figure there must be huge sales just around the corner, but the actuality seems to be something quite different. You might think Harley would have wanted to clear a few of those hurdles before committing to selling there, but the urge must have been too strong. It will be interesting to see how this plays out.
The Kneeslider has quite a few readers in China, and if any of you have some local perspective on this, we would be happy to hear what you have to say.