Some Reflections on Entrance of Harley Davidson in India

Now, Indians can get a test of American style biking. Harley-Davidson, one of the most popular and iconic bike producers of the U.S., showcased its bikes at the recently held 10^th Indian Auto Expo, at the Pragati Maidan in New Delhi.

Harley-Davidson (www.harley-davidson.in.) is the number one producer of cruising and touring motorcycles in the world and one of the strongest bike brands. It produces heavy bikes and all the necessary motorcycle parts, accessories and general merchandise. The company currently sells motor bikes in more than seventy countries in the world but North America is still the company’s largest market. Now, the company is looking forward to sell its bikes in the Indian market.

Harley-Davidson at the Delhi Auto Expo 2010:

At the 10^th Indian Auto Expo, Harley-Davidson showcased its custom painted Harley-Davidson Softail FLSTF FAT BOY. It will be the first motorcycle to go on sale in India in tri-color accent. Anoop Prakash, Managing Director, Harley-Davidson India, said that for more than a century, Harley-Davidson had been inspiring motorists around the world to celebrate their passion for riding. As a leader in the leisure motorcycle segment worldwide, his company is naturally suited to lead and define leisure riding in India. Harley-Davidson came to India with a promise to bring riders the pure Harley-Davidson experience with bikes from every family. The Hindu Business Line reports:

The legendary motorcycle brand is set to enter India with its full range of five motorcycle families, the Sportster, the Dyna, the VRSC, the Softail and the top-of-the-range Touring series. Twelve models of Harley-Davidson would be launched in the country, The Managing Director of Harley-Davidson India, Mr Anoop Prakash, says this is set to develop a whole new leisure riding segment in India.

Harley Davidson planning to do business in India:

After China, India is the second largest two-wheelers market in the world. More than 500-600 super bikes are sold every year in India. The super-bike segment in India is currently dominated by Japanese bike makers including Honda, Suzuki and Yamaha.

For a long time, Harley Davidson has been eyeing the Indian market. Since 2005, the company is in talks with the Indian government but the two sides failed to reach any agreement on the grounds of import duty and emission standards. Earlier, there was no specified emission standard for motorcycles over 500cc engine displacement which prohibited the import of Harley-Davidson and other manufacturers of similar bikes.

In May 2007, Mr. Timothy Hoelter, Vice-President, Government Affaires, Harley Davidson Inc, came to India for the third time. He told reporters that his company is very keen to enter the Indian market but the 60% import duty plus 30% local taxes almost doubled the prices of their bikes. He also said that he would continue his visit to India to talk with government officials and promised to harmonize his company’s products according to the Indian emission standards. Mr. Hoelter’s son-in-law is an Indian and he said that he had wanted to see Harley-Davidson bikes on the roads of New Delhi.

In 2007, Susan Schwab, U.S. Trade Representative, met with Kamal Nath, Minister for Commerce and Industry. Mr. Nath had agreed to give access to Harley-Davidson to the Indian market in exchange for the export of Indian mangoes to the U.S. India recently changed its pollutions regulations but tariff issue could not be solved. Harley-Davidson officials will continue their plea to the government to exempt their products from import duty.

In August 2009, Harley-Davidson finally announced its plan to enter the Indian market. The company established subsidiary at Gurgaon, near Delhi and started to look for dealers. Despite the high price tag of the motorcycles, Harley-Davidson believed that the local demand would help them to overcome this problem.

Harley-Davidson models for the Indian market:

At the initial stage, Harley-Davidson will bring five full ranges of motorcycles in India. They are:

• Sportster
• XL 883L SPORTSTER
• XL 1200N NIGHTSTER
• XL 883R ROADSTER
• XR 1200X

• Dyna
• FXDB STREET BOB
• FXDC SUPER GLIDE CUSTOM

• VRSC
• VRSCDX NIGHT ROD SPECIAL

• Softail
• FLSTF FAT BOY
• LSTC HERITAGE SOFTAIL CLASSIC

• Touring
• FLHR ROAD KING
• FLHX STREET GLIDE
• FLHTCUSE ULTRA CLASSIC ELECTRA GLIDE (CVO)

Price range:

The base price of the Harley-Davidson motorcycle will start from Rs.6,95,000 up to Rs. 34,95,000. Anoop Prakash said that they have tried to give all the Indian bike enthusiasts an opportunity to join the Harley-Davidson family. Harley-Davidson will also provide genuine parts and accessories and a wide range of riding apparel and merchandise through their dealer network in India. The Harley-Davidson FXDC Super Glide Custom is priced at Rs.15,40,000. It will be customized according to buyer’s choice. The Electra Glide Touring model is the costliest of all with a price tag of Rs.34,95,000 each. Bookings for the motorcycle will start from April at local dealers situated in New Delhi, Mumbai, Bangalore, Hyderabad and Chandigarh. The company is looking forward to increase its dealership numbers to twenty in the next five years.

Promotional events:

In order to familiarize Indian riders with Harley-Davidson motorcycles, the company organized ‘boot camps’ and ‘founders rides’ in Mumbai, New Delhi, and Bangalore, where more than three hundred riding enthusiasts got the opportunity to learn about the motorcycles and the model families and provide their ideas.

Harley-Davidson has further plans to arrange more such promotional events. The company considers anyone between 18 and 64 as its potential customer.

Establishing manufacturing plants in India:

For now, the Harley-Davidson motorcycles will be imported as completely-built-units with 105% import duty. Anoop Prakash said that his company is interested to set up plants in India if it is viable.

MOU with ICIC Bank:

During the auto expo, Harley-Davidson also announced that it had signed a MOU with ICIC Bank to finance buyers to buy Harley-Davidson motorcycles. ICIC will offer loans for up to five years at an interest rate of 11% for buying Harley-Davidson bikes. The lowest calculated EMI (Equated Monthly Installment), for the Harley 2010 HD XL883 Low Sportster, is Rs. 12,485. It would further increase for other models.

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