A decade of hot sales and still go­ing strong

There will be more deal­er­ships in big and small cities in China, saysHar­ley-David­son chief

China Daily (USA) - - Q & A WITH CEO - ByWUYIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Ev­ery morn­ing Matt Le­vatich walks into his garage and lis­tens to his three Har­ley-David­son mo­tor­cy­cles to hear which one of the Har­leys — known af­fec­tion­ately to own­ers and fans as “hogs” — “speaks” to him, and picks the one that he feels right for the day.

The me­chan­i­cal en­gi­neer by train­ing and pres­i­dent and chief ex­ec­u­tive of Har­ley-David­son has a pas­sion for en­gines, power, and range which goes be­yond mere words to de­scribe.

Grow­ing up rid­ing bikes, Le­vatich com­bined his busi­ness am­bi­tions and life­style when he joined the com­pany in 1994. He has been bik­ing in many places around the world — and one of the mo­tor­bik­ing trips that im­pressed him most was when in 2006, Har­ley-David­son first en­tered the Chi­nese main­land, he rode along the Great Wall with other 30 Har­ley-David­son own­ers. Sub­se­quently he wit­nessed the fast ex­pan­sion of the busi­ness in the past decade through fre­quent vis­its to the main­land.

Le­vatich re­cently talked to China Daily about the com­pany’s strat­egy and the mo­tor­cy­cling cul­ture in China. The fol­low­ing are edited ex­cerpts from the in­ter­view.

What kind of life­style does Har­ley-David­son rep­re­sent? How would you de­scribe a per­son who fol­lows this life­style?

I think ev­ery cul­ture has a slightly unique per­spec­tive on Har­ley. But what they all have as a very com­mon per­spec­tive is this sense of free­dom, and a sense of iden­tity that “I’m a cer­tain sort of per­son and I wanna make a state­ment aboutwhoI amas anin­di­vid­ual.” We call it per­sonal free­dom and it’s the core of what the brand means for the rid­ers.

How do you eval­u­ate Har­leyDavid­son’s per­for­mance since it en­tered China in 2006?

I am quite pleased to have seen the num­ber of Har­leyDavid­son own­ers grow quickly in the past decade and the brand is widely known among con­sumers. Fi­nan­cially China, as a part of the Asian mar­ket, is also one of the fastest-grow­ing mar­kets de­spite a fiercely com­pet­i­tive en­vi­ron­ment. We are pleased to see the pas­sion from Chi­nese rid­ers and we are con­fi­dent that more un­der­stand­ing of the rid­ing cul­ture will drive growth.

Which Har­ley-David­son mod­els sell the best in China? and Why?

The Har­ley-David­son Street 750 mo­tor­cy­cle and Sport­ster mo­tor­cy­cles are both best sell­ers in the China mar­ket. Th­ese two fam­i­lies ap­peal to young rid­ers in China who are keen on ag­ile and pow­er­ful rides in China’s ur­ban en­vi­ron­ments. More­over the Street, Iron 883 and Forty-Eight mod­els form the Dark Cus­tom lineup —hard-nosed ma­chines that offer an au­then­tic, af­ford­able ex­pe­ri­ence to a new gen­er­a­tion of rid­ers, who want to make the Dark Cus­tom mo­tor­cy­cle his or her own with ac­ces­sories, in­ge­nu­ity or rid­ing ex­pe­ri­ences. This as­pect cer­tainly ap­peals to Chi­nese rid­ers.

What is your vi­sion and ob­jec­tives for Har­ley-David­son’s busi­ness in China?

Es­tab­lish­ing the busi­ness 10 years ago and build­ing it up care­fully to have that level of pas­sion in those num­bers (of own­ers) is quite re­mark­able. And to see them all come to the ral­lies and cel­e­brate — it’s build­ing the right kind of un­der­stand­ing and the right kind of mo­men­tum for us. We look at the Chi­nese mar­ket as be­ing very im­por­tant forHar­ley-David­son in the long term. We have goals and they cer­tainly in­clude sales and also putting deal­ers in tier 2 and even tier 3 cities over time. That will help us to ex­pand our reach to peo­ple, to have ac­cess to our brand.

How do ac­ces­sories, cloth­ing and other non-mo­tor­cy­cle prod­ucts con­trib­ute to the over­all Har­ley-David­son busi­ness?

The whole pack­age of the mo­tor­cy­cle, the rider, the ex­pe­ri­ence, the fel­low rid­ers and those other items— cloth­ing and ac­ces­sories — helps cre­ate a real, richer ex­pe­ri­ence for the rider. We have a rel­a­tively strong her­itage, again, world­wide. It is all about cus­tomiza­tion or per­son­al­iza­tion of the mo­tor­cy­cle.

Have mar­ket con­di­tions been more chal­leng­ing in the past few years — or is it as friendly as be­fore for Har­leyDavid­son in China?

There is no sim­ple an­swer. Even in the United States, it’s been dif­fi­cult when you look at the eco­nomic in­di­ca­tors such as GDP, con­sumer con­fi­dence and so on. But the de­gree to which peo­ple want Na­tion­al­ity: Age: Ca­reer: Ed­u­ca­tion: Hob­bies: Fam­ily: to spend money on a car, house, va­ca­tion or a Har­leyDavid­son is a func­tion of many things. And there’s no re­fin­ing it in this day and age around the world. There are lots of un­cer­tain­ties and all th­ese things go into us be­ing able to per­form as a busi­ness in a world that is less pre­dictable than it used to be.

How does Har­ley-David­son co­op­er­ate with its deal­ers?

In China we al­ready have 23 deal­er­ships. In the fu­ture, there will be more deal­er­ships in key cities and we are also look­ing at lower-tier cities where there are in­creas­ing num­bers of con­sumers who have em­braced the rid­ing cul­ture. Open­ing a deal­er­ship like the mas­sive and amaz­ing fa­cil­ity in Bei­jing re­quires a huge in­vest­ment, and we are mak­ing ev­ery ef­fort to sup­port our deal­er­ships and pro­vide bestqual­ity prod­ucts, to en­sure that the in­vest­ment is a suc­cess.

How does Har­ley-David­son fit in the con­text of in­creas­ing im­por­tance at­tached to the en­vi­ron­ment?

In 2014, we demon­stra­tion in­tro­duced a of an elec­tric Har­ley-David­son mo­tor­cy­cle and we took them around the world to give cus­tomers an op­por­tu­nity to try them out. That’s be­cause most peo­ple would say “I don’t un­der­stand (why Har­ley-David­son is mak­ing elec­tric mo­tor cy­cle).” The other thing is when peo­ple think of an elec­tric bike, they think of some­thing maybe a lit­tle bor­ing, un­der­pow­ered and not fun, and we wanted to show peo­ple what is pos­si­ble in an elec­tric Har­ley-David­son. The feed­back has been just fan­tas­tic. They want it now and say: “why can’t I buy it to­day?” But we know we can offer prod­ucts with more range, lower cost and we are mov­ing to­ward to that. We are look­ing for­ward to launch­ing the elec­tric mo­tor­bike in the next five years.

How does Har­ley-David­son cope with the chang­ing tastes of rid­ers? Is there any plan for new tar­geted groups such as young rid­ers?

We use prod­ucts to in­crease the reach of the brand and peo­ple can find their way to Har­ley-David­son through dif­fer­ent prod­ucts. And that’s im­por­tant for us, not just in China, but in mar­kets around the world. In­creas­ing the reach and the im­pact that we can have with the prod­uct — to women, young adults, new rid­ers and ex­pe­ri­enced rid­ers — is about mak­ing sure that we cap­ture their emo­tional ex­cite­ment. We are a very emo­tional brand and we want to make sure we stay that way, be­cause it’s a spe­cial place to be.

How would you de­scribe your lead­er­ship style?

I don’t have an easy an­swer. I have in­cred­i­bly high stan­dards. I don’t usu­ally come across as de­mand­ing. I’m not (sort of) a boss. But there are things that need to be done in cer­tain ways. High qual­ity. High fo­cus. High in­ten­sity. And th­ese are the ex­pec­ta­tions I have for my­self as a per­son do­ing any­thing. I am kind of per­son with the kind of think­ing of: “if you are go­ing to do some­thing, do it and do it well and get it done.” I bring all that pas­sion. Some­times, I’msure, the in­ten­sity is con­struc­tive. Some­times, maybe less so. I’m just a true be­liever in that the busi­ness has to be the best for the cus­tomer and then it’ll be good for the in­vestors, good for the em­ploy­ees and good for ev­ery­body else.

What routes in China would you like to ride in the near fu­ture?

2015 on­wards: Pres­i­dent and CEO, Har­ley-David­son Inc.

2009-14: Pres­i­dent and COO, Har­ley-David­son Mo­tor Com­pany

2008-09: Pres­i­dent and man­ag­ing di­rec­tor, MV Agusta Mo­tor S.p.A.

2007-08: Vice-pres­i­dent and gen­eral man­ager, part and ac­ces­sories, Har­leyDavid­son Mo­tor Com­pany

2003-07: Vice-pres­i­dent, ma­te­ri­als man­age­ment, Har­ley-David­son Mo­tor Com­pany

1992-94: MBA, Fi­nance, North­west­ern Univer­sity - Kel­logg School of Man­age­ment

1983-85: Bach­e­lor of Science, Me­chan­i­cal En­gi­neer­ing, Rens­se­laer Polytech­nic In­sti­tute

Travel, hik­ing and do­ing projects in his wood shop kids 51 Amer­i­can Mar­ried with two

I would love to ride more in China. My son has stud­ied Man­darin in high school and col­lege. He spent two months with me, one sum­mer, tour­ing round China and one sum­mer liv­ing in Kun­ming. And I flew into Kun­ming once and fly­ing around just be­fore land­ing, I thought how beau­ti­ful it was from the air and the moun­tains. I al­ways think to my­self that it would be a great place to ride around. We have deal­er­ship in Kun­ming and we’ve had an event in Dali and the rid­ing around was ab­so­lutely spec­tac­u­lar and the weather was great. So I had this in­stinct, look­ing out from the win­dow, that it was a good place to ride. This is one of the great joys of my job — the op­por­tu­nity to ride in th­ese beau­ti­ful places around the world.

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Matt Le­vatich, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Har­ley David­son Inc.

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