Vietnam’s latest status symbol

In late November 2013, Lawson Dixon was a worried man. Five years after first approaching Harley-Davidson US for the rights to open a franchise in Vietnam, conquering a grueling vetting process which saw 70 other applicants eschewed in favor of the family-owned UAE-based company Lawson works for – and overseeing a several million dollar investment in a state-of-the-art showroom and service center – he was worried he’d overestimated Vietnamese interest in the famous motorcycle brand. “Before we opened, people knew we were coming, but the Vietnamese kept their hands in their pockets,” he says. “We pre-sold a handful, but we did not get anywhere near the level of deposits we were anticipating and that was a concern. It wasn’t until we physically opened that people could see the showroom and our commitment to the market and could tell that we were the real deal.”

“Then the floodgates opened, and we’ve been struggling to catch up ever since. We’ve never had much more than two weeks’ stock in hand since we opened. We’ve had people come in and ask: What’s the most expensive bike you have? And when we’ve pointed it out, they say ‘I’ll take it.’” By the time Harley-Davidson opened its doors on November 30 last year, there were an estimated 400 Harleys in the country, all gray imports. Since November last year, the company has sold and delivered more than 200 new bikes to eager Vietnamese consumers, at prices ranging from VND370 million (~USD17,400) for an entry-level Sportster model to VND1.9 billion (~USD90,000) for the top-of-theline 110 cubic inch (1800cc) CVO Limited, which comes with a high-end touch screen infotainment system and new twin-cooled twin-cam v-twin engine. Sales are running around double expectations and at around 20 motorcycles a month, showing no sign of slowing down.
Oi Vietnam - OCT 2014_CS_Harley__DSC5012_NTHarley-Davidson’s rapid success in Vietnam has been aided by several regulatory changes in recent years. The first, in tandem with the nation’s admission into the WTO, was the removal of a blanket ban on the importation of motorcycles with engines larger than 175cc. That was followed, the day after the showroom’s opening, by a government announcement easing of licensing conditions for owners of high-powered motorcycles. Previously, if you wanted a license to drive a large bike, you had to first buy it, then join a government-run motorcycle club and wait for the club to invite you to sit for the license – literally leaving people owning bikes they weren’t legally allowed to ride. The change took effect last March. “The timing was right,” notes Lawson.

Taxation in Vietnam plays a disproportionate role in the pricing of new Harley-Davidsons. Taxation effectively doubles the price of bikes with engines larger than 800cc: import duties are 47 percent, luxury tax 20 percent, and then VAT gets added on top. Perplexingly, bikes with engines between 500 and 800cc attract a whopping 75 percent import duty. Price appears to be of little concern to Vietnam’s Harley buyers, who defy any demographic stereotype: The company has sold the same model 1690cc Street Bob to a 17-year-old and a 73-year-old. “The 73-yearold, he decided when he was a kid that one day he was going to own a Harley-Davidson – and finally, that day came,” says Lawson. The majority of sales are of Sportster models, which are at the lower end of the price scale, but are more accessible and easier to ride due to their size. Buyers typically then customize and accessorize from a comprehensive range of genuine factory add-ons, for example: handlebars, hand grips, chrome nuts and bolts, even seats. Some buyers will have several seats and change them out depending on whether they’re riding alone or with a passenger.

Cruising Along

Harley-Davidson is, of course, much more than a brand: it’s a lifestyle. And Lawson’s team supports local chapters of the Harley Owners Group (HOG) in Ho Chi Minh City, Hanoi and Phnom Penh. Worldwide, HOG has grown to more than one million members since its formation as “an original social network” 30 years ago. Harley-Davidson created HOG as a way for customers to engage with the brand in an environment where everyone is equal. Through HOG, which has clubrooms at the back of the Harley-Davidson complex in District 7, Lawson’s team organizes advanced rider training, social events and regular rides ranging from local day events to a road trip all the way to Phuket, Thailand.

“The thing about Harley-Davidson is its authenticity. It’s inimitable. People tattoo it onto their bodies,” says Lawson. Buying a Harley-Davidson is not something owners consider lightly. “It’s not uncommon for people to go to the dealership 20 times before they buy a bike. It can start with just a cap or a t-shirt, and then people get slowly immersed into the brand.” Once you buy the bike, that experience continues. It’s not a functional tool to get from A to B – it’s much more than that. “Harleys are a bit noisy, agricultural in terms of execution – they have a personality and a heartbeat which sets them apart from every other brand. No one else can capture that essence. Its biggest attribute is the undeniable ‘Harleyness’ that no one else can replicate.” Adding: “It’s purely a leisure brand. This is a very, very selfish acquisition, very much a personal reward. But invariably, when someone buys a bike, we notice the whole family gets sucked in – the kids, the wives, the girlfriends. That’s why we’ve leapt from being the newcomer to market leader within weeks of opening.”Oi Vietnam - OCT 2014_CS_Harley__DSC4998_NT

Harleys are about cruising, not speed. Drive a Harley and you sit upright, not hunched over racing machine-style. “A Harley is happy doing 30kph. You’re not trying to race anyone; you get to look around you.” A big earner for the Harley-Davidson showroom in Ho Chi Minh City is the merchandise – both for locals and visitors. Brand lovers can buy anything from Zippo lighters, riding gear, casual fashion to mugs and other souvenirs with or without Saigon livery in an area as smartly-merchandised as any modern shopping mall retail store. Lawson says it’s not uncommon to see a taxi pull up outside and seven Aussies climb out and buy a few shirts each. Vietnam is one of a number of countries served by the Singapore Asian regional office established when Harley-Davidson US recognized the need to develop markets outside the US and Europe where the recession was denting sales and growth. Entering the local market, even from a Singapore base, was executed with extreme caution given the fractious history between Vietnam and the US. “A lot of HarleyDavidson’s customers in the US are veterans and had direct experience with Vietnam and the company did not want to disenfranchise them by saying ‘we’ve now got a dealership in Vietnam,’” explains Lawson. “So they carried out a lot of market studies to make sure the brand would be accepted here and to make sure the launch was handled properly.” Ten months on, all that research has paid off. Harley-Davidson is a new luxury status symbol clearly here to stay.

Images by Ngoc Tran