Last year we said Harley Davidson was looking at India as a new potential market, all they had to do was get some agreements on tariffs, which are extremely high, plus figure out how emissions would be regulated.
US Trade Representative Susan Schwab will be visiting India in April and in what looks like a goodwill gesture before the visit, India seems ready to allow Harley Davidson access to their market. Previously, India had not allowed HD imports because they had no regulations for engines in excess of 500cc, now, however, they will allow the big bikes to come in under the Euro III standards followed in Europe.
The majority of motorcycles sold in India are in the 100cc category so Harley will have to establish itself among those looking for something other than a commuter vehicle and able to pay the price.
“Since the price of each of these bikes is over Rs2 lakh, the final cost, after taking into account an import duty of 60% (and various surcharges and additional duties on top of that, which result in an aggregate tariff of 103%) would be close to Rs4 lakh,” said the official. “At that price, people can buy a car in India,” he added.
The cheapest car available in India today costs Rs 2 lakh; by next year, the country will have one that costs half that, made by Tata Motors.
Harley-Davidson itself does not expect to sell too many motorcycles in India, according to the official, who claimed the company has given the government to understand that it hopes to import 2,000 of its products to India over the next three years.
Besides the small 100cc motorcycles produced there, India’s other manufacturer, Eicher Motor Ltd’s Royal Enfield division, sells about 32,000 motorcycles of 350cc and 500cc per year.
There is obviously a growing group of potential buyers in the country and if Harley can gain entry, they will likely want to try one of the new bikes, just like the residents of China who last year saw their first Harley Davidson dealership. But, unless there is some further work on tariffs they may remain too pricey for the majority of the market. Time will tell.