Despite the enormous population, Harley-Davidson still sells more motorcycles in its hometown of Milwaukee than it does in all of China. Sure, Harley is an American brand and basically a celebrity in Wisconsin, but that isn't what's holding Harley back abroad. The regulations on motorcycles in China are making it hard for Harley to grow its business overseas.
Business Week reports that there are strict regulations on motorcycles in more than 100 cities in China. In both Beijing and Shanghai motorcycles are banned from elevated highways and major thoroughfares.
Harley sold 268 motorcycles in China last year, but they hope to hike sales by 40% annually by 2016. The only way they'll be able to do that is if they get China to loosen their restrictions.
Harley is currently lobbying the Chinese government to ease up on the regulations so that the motorcycle market can grow.
Sean Jiang, Harley's managing director in China, said:
"Any investment in China without addressing the regulatory requirements will be a castle built on sand."
Harley is also working to change how Chinese people look at motorcycles. Most Chinese people see motorcycles as a simple mode of transportation and they aren't willing to spend $53,000 for a Ultra Classic Electra Glide.
Chief Executive Officer Keith Wandell said:
"The Chinese consumer is unfamiliar with leisure riding. They've always looked at two-wheelers as a form of transportation and getting to work."
But Harley is making a big push in China. They're running TV spots around the country and have been supporting local clubs to encourage people to ride. But even if the motorcycle community catches on in China, it could be a hard sell if major highways still ban motorcycles.