Harley-Davidson was founded in 1903 by William Harley-Davidson, Arthur Davidson, Williams Davidson, and Walter Davidson in a shed in their backyard in Milwaukee, Wisconsin. They started production in 1903 with three motorcycles and increased production to eight motorcycles in 1908. In 1969, AMF Incorporated purchased Harley-Davidson Motor Company and expanded its capacity from 15,000 to 40,000 motorcycles. Harley-Davidson, Incorporated was formed in 1981, after it was acquired from AMF Incorporated in a buyout. Harley-Davidson, Incorporated became a publicly held company in 1986.The new management reduced inventories and improved total quality. Following the new quality focus Harley-Davidson began to invest heavily in research and development. In just one year the new management reduced the break-even point by 18,000 motorcycles. The focus on efficiency in production and improvements in quality by the management resulted in increased demand and a production capacity of 100,000 motorcycles in 1995. In Japan, there are four major motorcycle manufacturers that supply motorcycles to the US. They include Kawasaki, Yamaha, Suzuki and Honda. Honda started production of motorcycles in 1955.Since then it has been the largest motorcycle manufacturer in Japan. It has manufactured almost three million motorcycles annually since its peak in 1982. By 2006 production had reduced drastically to around 550,000 but it was still manufacturing more motorcycles than its three domestic competitors Yamaha, Kawasaki and Suzuki. Yamaha Motors was also founded in 1955 and is the second largest manufacturer. Although they had been producing motors since the 1940’s under a different name, Kawasaki Motors entered the U.S. market with a complete motorcycle in the early 1960’s. In the 1950’s Suzuki got its start into motorcycles by putting small motors on bicycles much like Harley Davidson did fifty years earlier.
There are over 6.5 million of domestic and foreign motorcycles registered in the United States of domestic and foreign make. Harley-Davidson is dominant in this market with majority of the consumers preferring them to the Japan manufactured motorcycles. Although they are motor cycle makers, the Japanese and American manufacture different types of bikes. The Japanese makers, listed above, manufacture bikes of all types: road, off road, sport bikes, scooters, mopeds, touring models and cruisers. The American manufacturers, Harley Davidson, only make large displacement heavyweight cruisers. Another significant difference between these companies is that Harley Davidson only makes motorcycles, their spare parts, and accessories for their motorcycles, and never has done anything else. Another difference is that all four of the Japanese brands are only divisions of a larger conglomerate company and are not the sole production while in America, Harley Davidson is a company on its own focusing mainly and solely on the manufacturing of the motor bikes.
All of the Japanese makers along with Harley Davidson have ready markets for their motorcycles all over the world but where they are built and where the individual components are built and come from is constantly changing in an effort to lower cost and meet trade requirements. This is because almost all companies want to save on expenses and finding cheaper and willing workforce goes a long way in realizing their goal. Before the economic down turn of the late 2000’s most Hondas which were sold in the US were built in their Marysville, Ohio plant but the plant was later closed in 2009 after nearly 30 years in operation. As a result, Honda now makes all U.S. bound motor bikes in Japan. Elsewhere, Kawasaki was the first Japanese manufacturer of motorcycles to open a U.S. factory in 1974 and proud to say so on their website, boasting of their Lincoln, Nebraska and Maryville, Missouri plants. They also are the most globally producing company not only having plants in Japan and in other different parts of Asia. These locations include Indonesia, Thailand, and the Philippines. Unlike Kawasaki and Honda, Suzuki has never made a motorcycle in the U.S. and only produces their motorcycles in their plants which are located only in China and Japan. The first Yamaha Motor bikes sold in the USA were by Cooper Motors, an independent sales agent in 1958. The models that were on sale in America were the YD1 and MF-1. In 1960 Yamaha International Corporation began selling motorcycles in the USA. Although all of their motor bikes are made in Japan, China and India, Yamaha started a line of cruiser style bikes under the name Star. Still sold by Yamaha, Star Motorcycles started in 1994 to compete with Harley for the U.S. cruiser market and in 2006 became its own company. Stars are made in Japan for the U.S. market only and designed at Yamaha’s Cypress, California office. Yamaha has been producing motorcycles in India for several years to take advantage of India’s cheaper labor and it also being the second largest market for motorcycles behind China. Yamaha in India has been so successful that now Indian-made Yamaha are being imported back to Japan.
Yamaha is not the only company to enter India’s booming market. In 2010, Harley Davidson opened a factory near Delhi. Five different models for the Indian market are being assembled from parts shipped in to beat India’s tariff on imported motorcycles. This is the second time that Harley Davidson has built motorcycles outside the US as they have had an assembly plant in Brazil making a limited amount of models for their South American dealers since 1999. All others Harley Davidson’s are made in US factories and exported to foreign dealers.
The main strategy used by motor bike manufacturing companies is product segmentation. Meaning that there is a bike available for all types of riders, including men, women and teenagers. The main categories of motor bikes, including cruisers, sport, touring and dirt bikes. They account for 91% of motor bike sales. There are many competitors in the motor bike industry, the five most significant are Honda, Harley-Davidson, Yamaha, Kawasaki, and Suzuki. Honda controls a 40.22% brand preference among the consumers. Harley Davidson follows behind with 18.9% while the rest Yamaha, Kawasaki, and Suzuki follow with 13.1%, 9.6% and 9.6% respectively.
The Japanese brands tend to portray a young, modern and stylish image. In the past, Harley always had a tough time competing against these Japanese companies. Harley used to compete in the industry by exploiting the Japanese motorcycle’s older design compared to its own rather than attempting to match the Japanese companies’ reputations. In also marketed its product as the “American” product and began appeal more to collectors and enthusiasts. Harley also made its machines easy to customize and re-tool. The customization market is what has allowed Harley to stay in the market against the stiff competition from Kawasaki and Honda.
Works cited
Holmstrom, Darwin. Harley-davidson Century. Osceola, Wis: MBI, 2002. Print.
Alexander, Jeffrey W. Japan's Motorcycle Wars: An Industry History. Vancouver: UBC Press, 2008. Print.
