Mumbai/New Delhi: The iconic Harley-Davidson motorcycles could become a lot more affordable for Indian buyers if the local arm of the US company of the same name goes ahead with its plan to develop an India-specific model.
At least six people associated with the project independently said Harley is working closely with the Indian suppliers on the design and development of a motorcycle that will fit the budget of Indian buyers. Of the six, four are directly involved with the project. None of the six wanted to be identified given the secrecy surrounding the initiative.
In an email response, Sanjay Tripathi, Harley-Davidson India’s director (marketing), said: “To strengthen our operations in the country, Harley-Davidson has set up a CKD (completely knocked down) unit to assemble select motorcycle models for the Indian market. We have recently launched three CKD bikes in the market and will continue to focus on our CKD operations for the moment. Having said that, we will continue to carefully evaluate any option that may benefit our customers and the business, and as a longstanding company policy, we do not comment on market speculation or rumours.”
The Indian model, parts for which will be made locally, will also be exported to Asean (Association of Southeast Asian Nations) countries.
Harley adopted a similar strategy of high level customization for emerging markets such as China, said an analyst with a global consulting firm, who declined to be identified. He is not aware of Harley’s India plans.
The new model is expected to have an engine displacement in the range of 500-750cc and will be ready for launch sometime between mid-2012 and early-2013, according to one of the four people directly involved with the project.
“The price could be as low as Rs4 lakh,” said another of the four; this person is involved in the sales and marketing of Harley-Davidson bikes.
With the company increasingly focusing on emerging markets, there will be many more such offerings from its local arm, said a third person.
Harley officials have been meetings Indian suppliers and discussing the project for months now.
The company commenced its India operations in August 2009. Encouraged by the initial response, Harley started assembling some of its select models this year at its newly established factory in Bawal, near Haryana.
It currently sells 15 models that are priced upwards of Rs5.5 lakh. Most of the models are imported.
In India, imported bikes attract a duty of at least 90%, while CKD kits attract a duty of 30%.
“Local manufacturing will help the company in paring the duty costs substantially,” said Kumar Kandaswami, senior director at audit and consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd.
Even niche product companies need to offer some price points and configurations that work for a slightly larger cross-section of Indian consumers and hence it only makes sense to customize the bike, given that India is a fast growing market, he added.
Harley-Davidson currently sells motorcycles through dealers in Delhi, Mumbai, Bangalore and Hyderabad. The company sold 200-250 motorcycles in India in the six months to December.
Tripathi of Harley-Davidson said the company is assessing the possibility of expanding its dealership network to Kolkata, Ahmedabad and Chennai.
The burgeoning number of millionaires in India have prompted several premium global bike makers to tap the local market. According to Credit Suisse’s global wealth report, in 2010, India had 170,000 millionaires in dollar terms.