Tuesday, August 11, 2009

Interesting article about building choppers/motorcycles in general

Business Opportunities in India
India has a booming economy and car and motorcycle ownership is increasing. It was not too long ago when the roads were populated with bicycles and now they are congested with Indian made cars and imported Mercedes, BMW and Bentley. Harley-Davidson wants to open their first authorised dealership in India and no doubt when this happens, there will be more dealerships opening throughout India as the market expands along with the economy and new bike owners become hungry for the many accessories that many companies make for them. V-Twin Custom motorcycles have a world-wide following from people wanting something individual and exciting who want to build their own custom or to have someone build one for them. This business will not be competing with the moped, low capacity or even the Royal Enfield market. It is entering and creating a totally new market and your customers will be professionals, business people, even movie stars with a high disposable income.

The Opportunity – V Twin Custom Motorcycles
Parts to build these motorcycles will attract import duty rates of only 35% compared to 100% for importing a Harley-Davidson motorcycle. This makes V-Twin Custom motorcycles a better business opportunity in comparison. It is good business sense to be in at the start of a good business opportunity rather than at the middle or end enabling you to take advantage of the lack of competition and to expand quickly allowing you to create your own brand and franchise chain, building and supplying complete V-Twin Custom motorcycles or supplying parts to people who want to build their own bike. When Harley-Davidson do open up dealerships in India your business will be well placed to offer owners of Harley-Davidson motorcycles a range of unique accessories not available through an authorised HD dealer. You would also be in a very competitive position to build and export custom motorcycles throughout Asia and elsewhere! India is also well able to design, manufacture and sell custom parts to a global market. India has a vibrant and varied media together with Bollywood and when all these become involved with the V-Twin motorcycle, exciting things can happen. Business people with vision and sound business knowledge can benefit from this potentially very lucrative business opportunity.
How we can help
A R Harley & Sons(2008) Ltd has been established since 1996 and has grown to become a leading player in the manufacture and distribution of Parts and accessories for both Harley-Davidson motorcycles and American V-Twin custom motorcycles. Alistair Harley is a writer and web content advisor and writes for motorcycle, car and lifestyle magazines. We can help you look at different business models in relation to your financial position to ensure you have a sound basis for your new business. We can arrange visits to existing retail and manufacturing businesses in Europe and the USA to let you see the range of options available to you. We can advise you with specialist technical and Custom bike builder training, Training material and marketing advice, Website Promotion material, appropriate Logo as well as establish links with trusted suppliers and avoid some of the pitfalls that a new business can experience. We can help market your business, in India and throughout the world(see www.alistairharley.com). We have a vast store of pictures and parts to use in marketing and advertising and website construction. We have specialist website designers who can design or advise on website design, although India already has many website designers. We can advise on cost effective business operations. We have an import agent in Mumbai who is experienced in this area and can assist if required with freight arrangements.
Choosing a business model
Building and selling custom bikes is not purely a matter of starting a business carrying out these activities. American V Twin Custom bikes are an extension of the Harley Davidson Business model which involves

1. building bikes with or without your own brand
2. Modifying and customising motorcycles. Skills employed building V Twin bikes are directly transferable to making alterations to all motorcycles. For any distinctive and successful market penetration it would be important to market the V Twin marque for maximum marketing opportunity. The arrival of Harley-Davidson in India will present an opportunity to sell parts and accessories, customising and fabrication servics to HD bike owners. You can also offer these services directly to HD Dealerships as happens already in Europe and USA. The website(www.harleycustom.in) contains many parts that fit directly to most HD models and which would not normally be sold by HD dealers themselves.
3. selling bikes with or without your brand attached
4. selling clothing and accessories along with your own brand
5. Social events, Owners club, discount schemes, insurance and warranty, also involving your brand
6. cafes and restaurants, also promoting your individual brand
7. see http://www.ace-cafe-london.com/Videos.aspx (not the best example, but it’s the only example I know about)

We can be involved in whatever way you consider appropriate. We can work with whatever brief you have and will advise what we can or cannot offer or what additional resources will be useful to examining your intended business activities.

Business Model
Firstly I need to tell you a few things to clarify what our relationship will be.
1. You will be a self-supporting business. I don’t offer a franchise because I have no business presence in India. When your business becomes successful you may want to sell franchises to other people.
2. I can provide you with the right information to ensure you choose the right products at the lowest prices
3. I wont take any commission because you need to buy parts at the lowest possible price
4. If your business does well I will leave it to you to decide if my help was worthwhile and if you think I need any reward. But forget this aspect at the moment because you have much work to do.
5. Registration/insurance is something very important to get right. In India, because it’s not been done yet it is still an unknown. S&S Engines should satisfy the Indian emission regulations and you will need a European legal exhaust. It shouldn’t be a big problem to get registered, but because it is still an unknown quantity it should be treated as a problem until it is solved. Talk to whomever you need to until you get that part sorted.
6. Imports...........as an example of a lowest cost custom bike these are the possible costs in US$
Bike kit...................................10000
Ship to you from USA...............900
Additional parts.....to finish bike 1000
35% import duty.......................4165.....................I can put you in touch with a good import agent in Bombay
Your build cost and profit.............2000
price to customer.......................US$18565
the bike kit prices are lowest price/best value option. An S&S motor will cost US$1000 more(plus 35% import duty) many can cost more. Importing an OCC/Big Dog V Twin bike from the USA may have to retail in India at US$60000 plus

Do some market research in your area. Do you think there are sufficient people with too much money who can afford a US$20000 plus bike? With the benefit of the internet and magazines and advertising, you dont have to limit your business to local customers and you can build bikes for anyone throughout India. In due course as your business expands, there is no reason why you shouldn’t be building bikes further that the Indian borders. I have taken a quick look at Bangalore on the internet and from an economic perspective, it presents a positive view that you could have many customers. Although in India there are many motorcycles, these are mostly small capacity along with the Royal Enfield and some higher value Japanese sportbikes. V Twin custom bikes will cost substantially more and are not utilitarian vehicles. They are expensive toys and people that will be attracted to buy them are BMW and Mercedes drivers.................but they will need some persuasion to buy a motorcycle that much more expensive than any other in India. One option is to also offer a custom bike using a Royal Enfield engine..........this will enable to widen your customer base.
Building a bike is easy compared to making sure you can get the bike registered. The emissions, noise and safety rules have to be researched to ensure any parts you use will be part of a road legal bike.
There is another business in Bombay getting started who wants to buy as much as possible in India and also make frames and other parts. You may consider doing the same or even consider buying some parts from them. They may be able to share some information with you. Some US and one Dutch company have factories in China and it might be viable to bring parts from there instead of shipping parts over from USA
The most important part of getting thing right is to make sure you treat this as pure business proposition. You do of course need enthusiasm and interest in bikes and building them, but let your business head rule your enthusiasm instead of vice versa. Many businesses in UK/Europe have failed because some people with a strong interest in bikes didnt have strong enough business knowledge to make their business work.

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