Harley-Davidson Roars Into China

It has taken Harley-Davidson, one of IW's 50 Best Manufacturing Companies, more than 50 years to enter communist-ruled China, due to barriers including government restrictions on powerful bikes and the lack of demand, but on April 8, the first authorized dealership called, "Beijing Harley-Davidson began doing business in the Chinese capital.

The store will sell and service the low-riding bikes as well as parts, accessories, clothing and collectibles.

"People equate Harleys with freedom. That's why Chinese people like them," said Hollis Zhao, general manager of the shop owned by Beijing businessman Wan Jidong.

While a vast majority of the 80 million motorcycles owned in China are domestic brands -- and most are used in the countryside by farmers -- a growing number of people want to ride imported heavyweight bikes for fun. About 1,000 Harleys are already in China, but they were smuggled in due to lack of a dealership. Their owners and others who want to buy the bikes are in the upper class, including those who made a fortune from real estate or IT sectors, people who have lived abroad and "princelings" -- sons of high-ranking officials.

At prices ranging from 100,000 yuan to 300,000 yuan (US$12,300 to $37,000) each, the bikes cost 80% to 90% more than they do in the U.S. because of customs duties and other taxes China imposes. The high costs are just one of the reasons that the China journey for Harley-Davidson is just beginning. Many Chinese cities, including Beijing and Shanghai, ban motorcycles from highways and city center streets. Cities also restrict the number of licenses they issue for motorcycles.

The company's long-term strategy in China includes seeking to address the riding restrictions over time and lead the development of a leisure-oriented heavyweight motorcycle market as consumer-buying power grows.

Copyright Agence France-Presse, 2006

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