Harley-Davidson’s Road in Brazil

By Martin Kocandrle, Contributing Reporter

RIO DE JANEIRO – Groups of motorcycle riders rumbling past with the throaty authoritative growl that only a Harley provides is not a common scene in Brazil just yet, and may remain in the distance if the current problems for Harley-Davidson persist.

Harley Davidson logo outside one of their stores, photo by Bitman/Flickr Creative Commons License.

Currently Harley-Davidson is experiencing issues in the United States and most recently has requested a court injunction against its Brazilian distributor HD Comércio de Veículos LTDA, a subsidiary of “Grupo Izzo”.

According to reports Harley-Davidson Motor Company has filed a lawsuit against its current Brazilian distributor over an apparent breach of contract. While neither company has released an official statement regarding the subject it is understood that the disagreement arises from a combination of brand mismanagement and customer dissatisfaction.

Allegedly customers have been unsatisfied with the level of service offered by the current distributor Grupo Izzo, claiming to have waited from thirty to sixty days for spare parts and essential items such as license plates.

Customer service is an important aspect of Harley-Davidson’s platform, especially in a new market where it is trying to break new ground. In their annual financial report Harley Davidson states, “Every customer deserves an individualized experience in every aspect of ownership, whether they’re a long-time rider or just getting started.”

Further complaints stem from the supposed association of Harley-Davidson with competitor brands, also distributed by Grupo Izzo. The promotion of the various brands supported by Grupo Izzo drew criticism for creating a conflict of interest, and lack of focus on the Harley-Davidson brand. The result was an apparent dissatisfaction on the part of the customer with the services offered which were not properly representative of Harley-Davidson’s goals.

Since the issuing of the court injunction Grupo Izzo has 120 days to continue selling the brand of Harley-Davidson. It is expected that Grupo Izzo will appeal the courts decision and defend its position as the official distributor of Harley-Davidson goods in Brazil. In the meantime Harley-Davidson has the right to seek other partners within that time period.

One of Harley Davidson's creations waiting for its Brazilian master, photo by Remi Jouan/Wikimedia Creative Commons License.

The whole incident is yet another setback for Harley-Davidson, which has been struggling in recent years to maintain its foothold in the “big bike” market. While under-performance last year can be partly attributed to the global recession, more pervasive problems plague the company, such as marketing to a younger Harley demographic, and customer dissatisfaction with high prices and parts manufactured outside of the US.

The company limped through 2009 with shipments to dealerships down by 27 percent and a full year net loss of $55.1 million dollars.

It is an unfortunate incident for the motorcycle manufacture as part of its “courageous” new strategy, which predicts that international retails sales will account for forty percent of total retail sales. This new strategy involves establishing a presence in the markets of emerging economies such as China, India and Brazil, that are developing social classes willing to splurge on non-essential household items.

Although this will surely not spell the end of the road for a Harley-Davidson’s venture into Brazil it merely represents a minor setback in an otherwise foggy future for the manufacturer of the infamous “hog”.

6 Responses to "Harley-Davidson’s Road in Brazil"

  1. Anthony Giuffrida  April 9, 2010 at 12:43 PM

    Harley Davidson… those were the daze

  2. Robert Sheldon  July 3, 2010 at 2:14 PM

    I, like many others, do not like the idea of Harley-Davidsons being sold along side a lesser desireable brand of motrcycle. Harley-Davidson is worthy of it’s own free standing dealership. Committed to sales and service of the worlds number one heavy weight champion. Sell the other brands at stores clumped together. Harley-Davidson is and will always be a cut above the rest. The Harley owner deserves respect, quality service, parts availability and with the monopoly Izzo has in Brazil it is hard to offer the the best to the current and prospective owner. Open up the country, allow independant dealers and see the quality as each dealer tries to be better than his neighbor. I am not bashing Izzo! Parabems for a job well done in bringing H-D to the povo. But it’s time for change. Ride free, keep the shiny side up the rubber side down and the wind in your face.

  3. Alexandre  July 28, 2010 at 7:48 AM

    Sorry having to read this. I live in Brazil and I think monopoly is such a horrible attitude. I think Harley is doing the right thing … how can you be a serious partner from a group selling multi-brand motorbikes ?
    You have to have focus, endeavouring, concentrating in a aim, a target.
    So, go ahead full speed on this case and on the next curve sun will be shinning stronger for sure … If I had enought cash I would volunteer myself as a dedicated representative, but that’s another story anyway …

  4. Mario Galvao  August 2, 2010 at 9:22 AM

    Hi,

    two years ago I and my wife went to HD dealer ( IZZO) in Brazil…..
    What must be the grat day was one of the worst. My wife bought an Dyna yellow and received a black

    Imagine the most waiting day of her life , her first motorcycle….
    After this , a lot of problems …..

  5. Mark Hannocks  February 29, 2012 at 2:51 PM

    I am from SA and live in Brazil since 1997. I bought a softail 2008 from the Harley shop in Rio Barra. I have been to Harley stores all over the world and Brazils attitude and client service and accesories are just a joke. I been serriously thinking of purchasing a honda here due to the lack of support from Harley. I hope Harley get this partnership sorted out and quick.

  6. Pingback: Rio Harley Davidson in Leblon | The Rio Times | Brazil News

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