Matthew Levatich is living out of his suitcase these days. The chief operating officer and president of the iconic motorcycle maker Harley-Davidson Inc. has been meeting dealers across Europe, the Middle East and Asia to take stock of the year that was and plan for 2013. Levatich believes in the concept of “creating silence”—cutting the noise to make the sound heard is how he explains it.
Since it launched its Indian operations in 2009, Harley-Davidson has sold some 2,000 bikes in the country. Slowing economic growth hasn’t hurt demand for its products; customers need to wait three to four months to receive delivery after booking for most Harley models, which cost upwards of Rs.5 lakh. The US bike maker sells 13 models, of which six are locally assembled at a factory in Bawal, Haryana.
Levatich, joined by Harley India managing director Anoop Prakash, spoke in an interview during a stop-over in Mumbai. Edited excerpts:
Do we see the company offering more models that are locally assembled? Any plans of making fresh investment in your facility in Haryana?
Levatich: We will continue to evaluate the possibilities on a model basis. For the time being, we continue to leverage the investment already made. It’s all about making sure that we read and support the market well. The completely knocked down (CKD) models make up...the majority of the sales because it’s a point of entry into the brand. You can say it’s a chicken and egg concept. People are buying CKD as we chose to do it and vice versa.
Is Harley looking at developing an India-specific motorcycle?
Levatich: Product development is a significant investment for any company and our strategy is not to develop any market-specific motorcycles. We don't have any in our portfolio today and we don’t have any plans to. However, when we decided to enter the Indian market and going through the planning process, we started incorporating new answers about the market into product planning, which is a long-term process, which addresses the needs of the Indian buyers, so that our models make sense for this market.
Is your India strategy different from other markets?
Levatich: Whatever we stand for is common for all the markets and culture—the idea of personal freedom, of self-expression, of personalization, of making a statement regarding who you are as a person, is the same. There is a common theme shared by all Harley riders across the world. We stick to that theme because it’s very powerful. Our business model approach is the same in every market we are in.
How has the market for premium motorcycles been expanding in India?
Prakash: We have seen a steady growth in the premium segment. It will go the premium car market way. When Mercedes came in, no one knew how big the market was. Now you can see the segment has so many brands; market for super luxury bikes would follow a similar trajectory. The fundamentals are strong. It will take a few years to say with conviction how the market is as it’s still shaping up. As an early mover, we are shaping it.
You believe in the philosophy of creating silence. Can you elucidate?
Levatich: The idea of creating silence is—if the right work is done in a right way, it is implemented seamlessly without drama, without strife, without noise. So, the good person doing good work in a good way creates silence by virtue of that work. Squeaky noise is created by someone not quite doing a good job and usually management attention goes to the noise and I don't want any noise. Just a good job done in a good way and silence. Another way of putting it is—if you reduce the noise, you can create more headroom for the sound, and sound is good.
How has the response to the Fat Bob (the model launched in November last year) been ?
Prakash: The response has been great. That’s an indication of understanding what the customers want and responding to it. The initial booking volumes, though I won’t talk numbers, has exceeded our expectations almost two times.
How do you plan to leverage the 110 year global celebration of brand Harley in India?
Levatich: It’s a big milestone for us. The first global celebration is happening at Goa in the months of January and February. We are promoting some 110 events globally as it’s (the club of Harley owners) a global community. The one in Goa is one of them. It’s a big deal. We expect 500-plus owners riding from all over the country into Goa. This will include four days of celebrations—celebrating the bike culture.
What percentage of your total sales are financed? Any plans of launching your captive finance arm in India?
Prakash: It’s a healthy proportion. We have partnerships with ICICI Bank Ltd and HDFC Bank Ltd. They are offering very competitive rates. Launching the captive arm depends on the maturity and scale of the market, but we remain open and are keenly watching what others are doing in the space.
