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Harley-Davidson tries its luck with beginner bikes
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Vice President and Managing Director Harley-Davidson Asia Pacific Marc McAllister poses on a Harley-Davidson’s motorbike after an interview with The Jakarta Post on November 15 in Jakarta. (The Jakarta Post/Bimo Raharjo)
I
t took less than five months for Harley-Davidson, the US’s largest heavyweight motorcycle manufacturer, to come back to life and reopen its business operations in Indonesia in the hope of better luck with so-called beginner bikes.
Harley-Davidson relaunched its business in the country with the opening of two new outlets earlier this week, one in Radio Dalam, South Jakarta, and the other in Kelapa Gading, North Jakarta. Launching events for the branches are slated for December.
“We see Indonesia as a great growth opportunity for Harley-Davidson long into the future. It has a solid motorcycling culture, growing economy and growing middle class. So, it’s a great place to be,” Harley-Davidson vice president for Asia Pacific Marc McAllister told The Jakarta Post recently.
The company is already gearing up to open more outlets, including one in Medan, North Sumatra, before year-end and one in Bali in the first quarter of 2017. It plans to open a total of nine branches in Indonesia by the end of next year.
McAllister said it would provide various types of heavyweight motorbikes to meet the needs of a vast range of customers. It puts particularly high hopes on its motorbikes aimed at urban riders rather than on its more expensive touring bikes.
“So, it needs to be a little bit smaller, nimbler and better at slow speed,” McAllister said. “For instance, we have the Street 500 and Iron 883 series, which are much more appropriate for an urban rider who isn’t actually into touring, but is more into riding around the city, enjoying more of a social life.”
The Street 500—the firm’s first 500 cc motorbike—was launched in 2014 and is widely considered a bike for beginners in Harley-Davidson’s heavyweight segment, which mostly includes motorcycles with higher engine displacement.
Meanwhile, the Iron 883 is under the company’s Sportster series, which are also considered starter bikes by many, even though they have higher engine displacement of 883 cc to 1,200 cc.
When it was launched in Indonesia at the end of 2014, the Street 500 was offered for an off-the-road price of Rp 219 million, equal to US$17,300 at that time, which was quite low price for its class. The Sportster series bikes were offered for Rp 300 million to Rp 400 million.
However, the weakening rupiah and what the company deems unhelpful tax regulations have forced Mabua Harley-Davidson—the sole dealer of Harley-Davidson motorcycles in Indonesia at the time—to let its agency license expire by the end of 2015, even though the company had an additional six months until June as a transition period.
“The total tax for importing a big bike has increased by up to 300 percent. This does not yet include the costs for making license plates and certificates. Those factors have caused the market to lose interest,” Mabua Harley-Davidson president director Djonnie Rahmat explained in February.
Mabua, which began its partnership with Harley-Davidson in 1997, had five stores in Jakarta and four more in Denpasar, Medan, Semarang and Surabaya.
McAllister acknowledged that the luxury tax made its products expensive for customers. Nonetheless, he said it would not be a big problem for the company, as it relied on the loyalty of Indonesian Harley-Davidson customers.
Harley-Davidson has appointed Legenda Motor Indonesia as its sole importer and distributor for its second attempt in Indonesia.
It has also formed partnerships with Nusantara Moto International to operate its store in Radio Dalam and with Anak Elang Motorindo to operate its store in Kelapa Gading.
