Foreigners in business: Harley-Davidson Japan

December 12th, 2011By Category: Work Tips

Christian Walters, Managing Director, Harley-Davidson Japan KK

One of the most iconic symbols of American lifestyle is the Harley-Davidson motorcycle. For over 100 years, the large motorcycles — with their distinctive design and customization — have been a fixture on highways. Clubs and events organized by HOGs (Harley Owner Groups) have created a loyal community in many countries.

Japan is no exception, where HD bikes have been imported since 1913. Harley-Davidson Japan was established in 1989. In 2010, the company sold 11,719 bikes in Japan. In 2011 (at the end of September), the figure was 8,470.

Heading up the Harley-Davidson operation in Japan is Christian Walters. Japan Today hears more about the business.

What is the image of Harley-Davidson in Japan?

Japanese customers see Harley-Davidson as an iconic American brand with a rich history and a unique brand heritage. Customers are fascinated by the “look, sound, feel” of a Harley-Davidson and the timeless classical design cues which not only is constant but evolving with innovation.

There are also some people who connect Harley-Davidson to wild images like riding on vast land of America as was depicted in the movie “Easy Rider or to the tough images revealed in the movie “Terminator,” but we believe Harley-Davidson is a brand loved by a wide range of customers. You can say that, Harley-Davidson is more than just a motorcycle. It represents freedom, self-expression and an opportunity to be part of a unique lifestyle.

How did the March 11 disaster affect business? Will 2011 end up being a good year?

The Harley-Davidson family of staff and dealers were fortunate to not have fatalities but we did have a number of sales outlets damaged by the earthquake and two were impacting significantly by the tsunami. In terms of sales, we were not immune to the overall macro impact. However, we are proud of how our dealer network and customers have responded positively to such a terrible situation. We are also confident our brand remains quite strong and long-term impacts are mitigated.

How is the strong yen affecting business?

We are a Japanese entity that conducts our business in yen. Also, being an established premium brand for such a long time in Japan, we do not make pricing decisions based on fluctuating FX rates.

What is your marketing strategy for Japan? I think you are selling a lifestyle as much as you are selling a motorcycle.

You are quite right. Harley-Davidson enables individuals to showcase their personalities and every motorcycle is a canvas of self-expression that helps them to embrace a distinct lifestyle and culture as well as embark on a unique experience. We are a global brand and live by our policy of providing utmost priority in offering a “Premium Ownership Experience” which can only be enjoyed through customers’ purchase of the Harley-Davidson motorcycle.

Premium experiences are offered from broad areas, not only through the products but also through our wide range of P&A and excellent sales network, individual activities of dealer operated chapter, branch organization of world’s largest riders’ group, HOG (Harley Owners Group) with about 1.1 million members in 131 countries. In Japan, there are approximately 40,000 HOG members — the 2nd largest HOG organization after the home country of U.S.

I believe Harley-Davidson is quite different from other motorcycle brands in that Harley-Davidson broadens the interactions among riders, creates bonds among customers as HOG provides occasions for owners to interact at events or programs for members to enjoy the unique riding experience and kinship.

Who are your typical customers?

Many people tend to think that Harley-Davidson is purchased by males who are in their 50s or 60s, but in fact the average age of a new Harley-Davidson owner in 2010 was 43.7 years old. Our customers are brand loyalist and riding enthusiasts from all walks of life and of all age groups. Another interesting fact is that an average of 70% of those who bought a Harley-Davidson is a new customer to our brand. Considering we have been here in Japan for nearly 100 years (in 2013) we believe this proves the high level of interest by consumers in Japan.

How much of your sales in Japan comes from bikes and how much from accessories?

Our annual report in 2010 will show that approximately 75% of our revenues comes from motorcycles, while about 18% from parts & accessories and 6% from MotorClothes. We believe that each individual has their own unique proposition and H-D offers riders an opportunity for self-expression, through changing the form and aesthetics of their motorcycles such that no two are identical i.e. “every customer is a custom.”

What is Harley-Davidson’s share of the over-751cc bike market in Japan?

Based on government registration data from JAIA, the 2010 market share of Harley-Davidson in Japan for 751+cc category was 31.1%. And our market share will be 26% if we see the market from 401+cc, which means 1 out of 4 mid/heavyweight motorcycles are Harley-Davidsons.

How many new models did you launch in Japan this year?

We launched a total of 30 2012 MY models in Japan. Among the 30 models, two are brand new to the market — FLD Switchback from the Dyna family and the 10th anniversary model from V-ROD family, the only liquid-cooled model offered by Harley-Davidson.

What is your best-selling group in Japan?

Our uniquely designed compact Sportster line is the best selling family in Japan as Sportster models fit to the Japanese traffic environment and the physical size of a Japanese person. The XL1200X Forty-Eight from Sportster Family has favorably been accepted by a wide range of age group since the debut in 2011MY. The Touring Family, our premium flagship models for Harley-Davidson equipped with the Twin Cam 103 engine, is our second most popular family. Last but not least, CVO (Custom Vehicle Operations) is our ultimate in premium factory custom touring with high-end performance, Screamin’ Eagle power.

Do you have to make modifications to bikes sold in Japan to comply with Japanese noise and emission standards?

Harley-Davidson motorcycles always meet or exceed the noise and emission standards in all 77 countries in which they are sold, including Japan, which has the strictest standards in the world.

Tell us about your distribution network.

We have a total of 181 sales outlets as our network throughout Japan. We apply our own Harley-Davidson standardized criteria to dealers and allow only those which fulfill these criteria to operate as part of our authorized sales network. Our dealer network is not just an environment where customers can see, touch, feel and ride our beautiful motorcycles, but also engage in experiencing a breadth of genuine parts & accessories, and MotorClothes to provide a true “Premium Customer Experience” that is unique to Harley-Davidson.

How do you get feedback from customers?

We track our customers’ feedback by free dial, customer events, and owner’s survey.

How many staff do you have in Japan?

We have 45 full-time employees working in Japan as of Dec 1. In addition, including staff from the independent Harley-Davidson dealers, the Harley-Davidson business in Japan is responsible for approximately 1,500 jobs in Japan.

Do you own a Harley-Davidson bike? How often do you ride it?

I have owned three different Harley-Davidsons in my past, including before I was an employee. Before moving to Japan, I was a proud owner of a Dyna Fat bob. While living in Tokyo, I have enjoyed riding as many different Harley-Davidsons as possible and use one as my primary means of commuting to and from the office. I make many other salary men quite jealous.

Author of this article


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