Harley-Davidson Inc, the biggest US motorcycle maker, plans to open its first dealership in China this year, as international growth leads the company's sales gains.
The firm will provide details on the new dealer in the coming months, Chief Executive Officer Jim Ziemer told analysts on Friday on a conference call about fourth-quarter earnings.
"They're going to take everything very slow in China," said Rick Drake, who manages a US$1.3 billion equity fund for ABN Amro in Chicago that includes more than 700,000 Harley-Davidson shares. "It's probably going to be a decade before China is meaningful to them."
Harley-Davidson said international sales of its motorcycles rose 15 percent last year, compared with a US gain of 4.2 percent. The Milwaukee-based company still gets four of every five of those sales in the United States and is trying to expand in other countries. Last year, it reorganized its sales operation in Germany to boost European business and opened its first dealership in Russia since 1917.
"Entering international markets is always a challenge, and China is going to be the same way," Ziemer said. "There are a lot of barriers."
The company sells about 50 percent of all new motorcycles in the United States with engines 650cc or larger, and almost one in four worldwide. Harley-Davidson's retail prices can exceed US$35,000 with accessories and custom paint jobs, giving the company the highest profit margin among publicly traded vehicle manufacturers.
Details of the China dealership will be provided in the first half of 2006, Harley-Davidson spokesman Bob Klein said. He would not discuss the location, investment amount and expected annual sales.
(China Daily January 21, 2006)
