Tuesday, November 2, 2010

Harley Davidson to assemble bikes in India

Iconic American motorcycle maker Harley-Davidson will start assembling select models in India, making them about 20-25 % cheaper, in a bid to crack the booming Indian premium bike market dominated by Japanese brands.

The upcoming facility at Bawal in Haryana will become operational in the first half of 2011 with an initial capacity to assemble 200 bikes per year, the company said on Tuesday.

The 70,000 square-feet plant will assemble select models including the popular Sportster family from kits of parts imported from the US factories of Harley-Davidson .

“The new project will make our bikes more competitive in the market,” said Anoop Prakash, Managing Director of Harley-Davidson India.
Completely knocked-down (CKD) kits attract a lighter net duty and taxes of around 60% compared to the 110% tax being levied on imported bikes.

A cheaper price tag will help Harley-Davidson make deeper inroads in the world’s second-largest two-wheeler market, where more and more young buyers are hopping on to premium bikes, driven by rising incomes and aspirations.

The super bike market in India was estimated at around 1,000 units last year and is growing 20% a year. It’s dominated by Japanese companies Suzuki, Yamaha and Honda with Suzuki’s Hayabusa in the lead. Kawasaki (by Bajaj Auto) and Italian cult brand Ducati, besides Harley-Davidson , too are selling big performance, designer bikes with engine capacity of 800 cc and more in India, while German luxury carmaker BMW last week said it will start selling its Motorrad range of bikes in the country by the end of the year.

Harley-Davidson , which started selling 12 models in India in July this year, hopes to gain an edge over BMW's Motorrad with its assembly plant, which will make its bikes more competitive.

Company officials refused to give its investment plans for the plant. “The plant is likely to be operational by the first half of next year and investments in it will be a part of tens of millions of dollars (of investments ) that we are making in India,” Mr Prakash said. The company will take a decision on cutting prices of its models when the plant is ready. At present, Harley sells bikes with engine capacities of 883cc to 1500cc and priced in the range of Rs 7.8-38 .7 lakh. The company said it hopes to sell 100-200 bikes by the end of 2010, but did not disclose the number of units it has already sold.

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