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    Harley-Hero pact a win-win deal for both

    Synopsis

    Hero MotoCorp will get Harley’s distribution network and will have a license to sell this product through their existing dealerships, says Mitul Shah

    Harley-Davidson joins hands with Hero MotoCorp for Indian market, inks distribution pact

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    Hero is not required to do any incremental major investment for this additional business. On the other hand with minimal investment, brand equity for Hero is improving, says Mitul Shah, HoR, Institutional Equity, Reliance Securities

    On key takeaways from Harley-Hero pact
    It is a win-win situation for both the players. Harley Davidson wants to exit from India in terms of reducing the overheads and expenses. Their manufacturing base is already outside India but the distribution network already exists here. Now Hero MotoCorp will get the entire network as well as they will have a license to sell this product through their existing dealership.

    There is no extra burden in terms of additional investment for Hero. On the other hand, Hero’s brand equity will increase significantly with Harley being a global iconic brand and globally also probably Hero will be able to display that they are already in a partnership with such a global brand. It is basically a brand improvement type of a strategy for Hero MotoCorp.

    Why did it take so long & what did Harley get wrong so far
    Harley being a global brand, they have a number of norms to be followed before coming to any conclusion. Of course, there would be certain internal terms, conditions to transfer the business to a certain extent including how Hero will manage the dealership and what would happen to the existing dealership. All those points are not yet out. We need to look into all those details before going into a detailed analysis.

    From Hero’s point of view I would see that it is not required to do any incremental major investment for this additional business. On the other hand with minimal investment, brand equity for Hero is improving. That is a very big thing on a global platform. So this probably would help Hero in the export business going forward.
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    1 Comment on this Story

    Dm Bhanap28 days ago
    India must ensure that as far as possible no foreign company stops/quit its manufacturing sales in the country either by promoting partnership deals or offering incentives to continue. If Toyota is on the way out it should be looked into with all seriousness how they can be persuaded to reverse their thinking. It is our declared policy to welcome manufacturing companies to set up a base or shift their operations from abroad for technology upgrading upskilling export and employment-generation.
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