Harley-Davidson looks to kickstart China sales with development deal

[SOUTHFIELD, Michigan] Harley-Davidson Inc, an American icon that's taken heat from the White House for expanding overseas and retrenching at home, is teaming with a Chinese company to gain greater traction in Asia.

The manufacturer signed an agreement with China's Zhejiang Qianjiang Motorcycle Co to develop two new motorbike models that will sell under the Harley brand, according to a statement filed with the Shenzhen stock exchange. The two aim to field the first bike in China by the end of next year and may sell the models in other markets including Thailand, Indonesia and India.

Harley has been forced to stray from its roots due to a shrinking US motorcycle market, contributing to what's been a bumpy ride for the Milwaukee-based manufacturer during Donald Trump's presidency. Chief executive officer Matt Levatich went from being one of the first company leaders to be welcomed to the White House in early 2017 to contending with angry tweets about closing a US factory and adding production overseas to avoid tariffs.

Mr Levatich decided to shut an assembly plant in Missouri last year as US sales continued to slump. Harley meanwhile began production at a factory in Thailand as part of a plan to sidestep tariffs and boost sales abroad.

The maker of big bikes long colloquially referred to as Hogs is rolling out a series of smaller models in a bid to get half of revenue from outside the US by 2027.

Qianjiang is a unit of billionaire Li Shufu's Zhejiang Geely Holding Group, whose assets include carmaker Volvo Cars. Qianjiang plans to start selling a 338cc small displacement motorcycle in China with Harley by the end of next year before marketing it in other Asian countries, Geely said in a statement on Wednesday. Qianjiang took over Italian motorcycle company Benelli in 2005.

Shares of Qianjiang advanced 5.1 per cent Wednesday in Shenzhen. Harley fell 0.2 per cent to US$34.91 in New York.

BLOOMBERG