Sunday, 30 August 2009

Harley Davidson to zip on Indian roads by 2010

Legendary American motorcycle maker Harley Davidson is ready to setup shop in India.

Yes, the iconic and cult brand Harley Davidson, which has enticed and charmed over a million bikers around the world and it continues to do so with the same enthusiasm and energy that it had 108 years back when William S. Harley made his first blueprint drawing of an engine designed to fit into a bicycle.

Harley Davidson has officially announced on its website that the company will make its foray in the fast-emerging and promising Indian market with its range of elite cruiser motorcycles. The model-range and its pricing are still under wraps as the product is yet to be launched. The 110% import duties on bikes, which effectively doubled the cost of these motorcycles for Indian consumers.

The import route for bikes above 800cc was opened in mid-2007 when the Indian government traded mangoes for Harley Davidson motorcycles. Yes, you read it right. For last 18 years, the Indian mangoes were banned in the US since the American government believed that the Indian farmers were using too many pesticides. In April 2007, the US government lifted the ban on Indian mangoes which meant that the Indian farmers could now be entitled to farm subsidies. In return, the Indian government revised the rule of importing high-capacity powered two-wheelers to India allowing bikes above 800cc to be imported legally in the Indian market.

However, the excise duties charged by the Indian government on 800cc and above capacity imported motorcycles are extremely difficult to overcome in order to gain a manageable profit margin. Hence Harley Davidson, which was the key factor in opening up the import route, held back its foray into India in 2007. The Japanese bike-maker Yamaha was the first one to make use of the import trade policy to launch its flagship model the YZF-R1 and its street-fighter model, the MT-01. Suzuki and Honda have followed suit by bringing in their international flagships to India and now Harley Davidson is all geared up and ready to roll into the country with its extensive range of life-style cruiser motorcycles.

Harley Davidson Motor Company president and COO Matt Levatich told ET: "The high tax burden is a disadvantage to our products, but we are looking at the vast opportunity in the world's second-largest two wheeler market. Gradually, we expect the niche bike segment to grow with infrastructure improvement and a buoyant economy."

India's seven-million strong motorcycle market does not have a big share of super bikes or high-powered bikes that Harley Davidson makes, but the US firm is banking on the growing popularity of such products. Bike makers who are present in the segment include Suzuki with its Hayabusa and Intruder models, besides other companies such as Yamaha, Ducati and Honda. These firms together sell over 400 units a year in the domestic market. Harley has not set any targets but is looking to sell in excess of 100 bikes next year. It will bring 15-20 bikes to India from its product line-up of over 200 models and start with the flagship cruiser Fatboy and Night Rod Special models.

Gurgaon is Harley-Davidson India Base!

The company has already established a subsidiary in Gurgaon, Haryana and has also started the hunt for dealers.  Leading the Harley-Davidson subsidiary in India is Anoop Prakash who will be posted as the Managing Director of this venture. The initial phase of expansion into the market involves locating and finalizing dealers in Mumbai, Delhi, Bangalore, Hyderabad and Punjab.

The first bikes will only be delivered in 2010, which isn't too far away. Its going to be an exciting year ahead and expect the fireworks to kick off at the Auto Expo in Jan! 

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