The hog is coming to town and Indians, at least those who can afford a Rs4 lakh two-wheeler, are getting ready to burn expensive rubber.
In what is being touted as a goodwill gesture ahead of the visit of US Trade Representative Susan Schwab in the second week of April, India’s commerce ministry is in the process of issuing a law that will allow the import of Harley-Davidson motorcycles by the end of March.
The eponymous company that makes the cult motorcycles and the US government had been lobbying India for a few years. The ministry of shipping, road transport and highways had blocked earlier attempts citing the fact that the country did not have any prescribed emission norms for motorcycles with engine capacity exceeding 500 cc. The engine capacities of most Harley motorcycles exceed that.
The ministry has now agreed to recognize Euro III (followed in Europe) emission norms for the motorcycles.
Contrary to an earlier proposal that was being discussed, the commerce ministry will not place any ceiling on the number of motorcycles that can be imported. A ministry official, who did not wish to be identified, said the high price of the product and a 60% import duty would anyway deter mass imports.
“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.
India’s six-million-a-year motorcycle market is dominated by fuel-efficient motorcycles with engine capacity of 100cc; these are the nation’s main mode of transport and eight out of every 10 motorcycles sold in the country is a commuter bike.
Eicher Motor Ltd’s Royal Enfield division, which makes the Bullet bike, is the only maker of motorcycles with engine capacities of 350cc and 500cc. Its six models are priced over at Rs70,000 and the company sells around 32,000 motorcycles every year.
Still, that price tag pales in comparison with the smallest of the Harleys, the 883cc powered Sportster, which retails at $6,600 (Rs2.9 lakh) in the US. Harley-Davidson, which sells 33 models, has manufacturing facilities only in the US and ships about 80,000 vehicles every quarter to various parts of the world.
“From a competitive standpoint, Harley’s entry will have no impact on us because we do not operate in the same segment,” said Eicher group CEO Siddhartha Lal. “But it does enhance the profile of leisure motorcycling in the country and we could actually benefit,” he said.
Motorcycles made by the over-a-century old Harley-Davidson Inc. are nicknamed hogs (the company founded a racing team called Wrecking Crew in 1914, and one of the racers adopted a baby pig as his mascot and called it hog).
The company also trades under the HOG symbol in US stock exchanges.
Its decision to tap emerging markets such as India and China is driven by slowing sales in the US and rising incomes in the Asian countries.
In April 2006, Harley-Davidson opened its first dealership in China. Now, its motorcycles will ride pilot for Susan Schwab and get to enter the Indian market.
Ravi Krishnan contributed to this story.