'This is the first time we are serious in India': Jochen Zeitz, CEO, Harley-Davidson

The Hero-Harley alliance has unveiled its much-awaited 440 cc bike which will take on Royal Enfield in the fast-growing Indian market. The announcement was made on Monday, almost three years after entering into a partnership.

Jochen Zeitz, CEO and Chairman of the board of Harley-Davidson said that the company's 440 cc bike will expand the addressable market and open up the brand to thousands of new customers. He was speaking to select media during a roundtable at Hero MotoCorp's Centre of Innovation and Technology at Jaipur.

This move will elevate the premium imagery for the Hero MotoCorp brand and will help expand the mid-size motorcycle segment, said Pawan Munjal, CMD of Hero MotoCorp.

The joint partnership was part of Harley's Rewire plan announced in 2020, wherein the company decided to selectively expand into the segments that they felt would be profitable in the future. Hence, the 440 cc motorcycle is not only expected to expand the addressable market but also to add to the bottom line for the US bike maker. 

Autocar Professional spoke with Jochen Zeitz and Pawan Munjal, as part of a media interaction on this announcement. 

What are your views on the evolution of this collaboration and your expectations from it?
Jochen Zeitz – First, we want to celebrate this partnership and how far we have come. We started this partnership in 2020 for the first time. It is exciting to be here for the first collaboration with X440 and to successfully launch it in India. This motorcycle fits right into our strategy that was launched in 2020-21 which was to selectively expand into categories with Harley Davidson. 

Pawan Munjal – Both Jochen and I, as well as both the companies believe in long term relationships.

When we announced the Harley partnership, we had said that on the same platform, Hero is also developing its own bike with its own badge, which we will be launching in the fourth quarter of this fiscal. You will see a product with a different styling.

The timing of the launch happens at a wonderful time. Two days ago, it was my father’s centenary birthday. Harley is celebrating its 120^th year, Jochen is in the midst of this celebration and tomorrow happens to be July 4.

What about servicing your bikes that were sold earlier and what about sales and service for this new product?
Jochen Zeitz – Our international bikes are being serviced by Hero ever since we passed on the distribution of Harley Davidson to them in 2020 and that will continue. This motorcycle will be available in our existing Harley Davidson Network but also beyond.

We will be selling through Hero's network. The product will be clearly identified as the Harley X440 in the Hero stores. That is one of the benefits of having a nationwide distribution network to tap into which complements the Harley Network which is very much focused on the top end.

Pawan Munjal – This product will be sold by the current Harley network, plus out of the selected Hero dealership. Both Hero and Harley products will be different in character, features, sound, performance and body type and will cater to different consumer bases.

You are entering a space dominated by Royal Enfield which has a very strong market share, how do you create your own space in the premium bike space?
Pawan Munjal - I don’t know of any other established player who has a history longer than 120 years and that is Harley Davidson. I would say Harley is the most established brand and player in premium motorcycles.

It is the first time Harley is coming into this segment with 440 cc in India but with the joint collaboration, co-creation of this bike by engineers from Milwaukee, CIT Jaipur and Hero Tech Centre in Germany.

As for premiumisation, this clearly is going to elevate the entire premiumisation strategy for Hero. We know there are thousands of customers out there who would want to buy a Harley Davidson, but it was so far out of their reach. It is going to be more affordable for them, so we do expect fairly large numbers to come for this particular product.

Jochen Zeitz – We are not just a motorcycle; we are a lifestyle. It was a brand that was out of reach in India for a lot of customers. This is the first time we are serious in India to launch a bike that will address a broader segment of market, it is not a 975 plus, it is 440, with a character that is uniquely Harley.

We think that is a great opportunity, combining the strength of the global brand, with our engineering design capability and putting it together with the knowledge that Hero has and with its manufacturing capability. It is a win-win solution that will be very successful. 

It is a global partnership; how do you take this partnership ahead? Is there potential for an EV?
Pawan Munjal - Right now, the focus clearly is on Harley Davidson X440 for the Indian consumer, the Indian market. We will take one step at a time. This is for the first time; Hero has got into this particular segment, with this size of an engine. We have come up with a beautiful product with great performance, we want to prove it to our consumers and then talk about other things.

Jochen Zeitz – We have launched a separate brand for Electric Vehicles at the New York Stock Exchange that is the Livewire. Today, I am wearing my Harley Davidson hat.

What is the kind of rise you expect in global sales with this product?
Jochen Zeitz – If you look at our strategy launched in 2020, we had said that we want to focus on the most profitable premium segment. There is no point in selling units that don’t generate profits.

The obsession with unit sales is not something I share. It is the premium segment, where we generate most profitability. If you look at the last three years profitability, it has significantly gone up for the company.  By focusing on touring, cruiser, launching into adventure touring on our Revmax platform. It is the profitability and desirability of the brand that counts, rather than chasing volumes.

Made in India Harley for exports market?
Jochen Zeitz - We used to manufacture modern Harley in India, it is well accepted that we can manufacture here and now we have a partner to do it with. But the focus right now is on the Indian market and growing our business in India, because we see great potential for us in India with X440. 

Is the global market shifting downwards or converging to lower to mid displacement motorcycles?
Jochen Zeitz – It is not a shift downwards. I got into motorcycles when I was 16, I traded up ever since. Until you become comfortable with big bikes, you ride the smaller engine bikes, that is what a lot of people do. As we say, you age into Harley, until you are ready for a big bike.

A 440 is a fantastic motorcycle, and it is certainly opening the doors for more riders than the traditional big Harley Davidson users, the strategy that we defined under the Hardwire of select expansion. It was to selectively look into getting new riders into the brand and this new bike achieves that.

We have a couple of other bikes in the Asian market, but we think this is a perfect bike for the Indian market.

Not everyone can afford a motorcycle that costs $20,000 and above but everyone aspires to it. When I was a kid, I aspired for Harley Davidson, but I could not afford it. If the 440 had been there when I was 18, I would have certainly bought it, so I think it is opening up an opportunity for buyers, would not immediately look for a big Harley.

For experienced riders or beginner riders, younger riders or females it opens up our customer base and the brand which is the intention of X440.

Would it expand the market?
Pawan Munjal – Hero has a knack of expanding the market, reaching to more and more customers in whatever we have done in the past.

The market has been in continuous expansion, the segment has steadily progressed, we are bringing to the table a unique value proposition. This is the first serious entrant of this scale.