Harley-Davidson: On the fast track

Leisure biking seems to be catching on in India with BMW, Hyosung and Ducati all setting up shop in India.

While all other manufacturers are currently importing these mean machines into the country, Harley-Davidson, the American cult bike maker, has announced plans to make operational an assembly unit at Bawal, Haryana, early next year to make more accessible its range of products to consumers.

Also on the cards is a low-cost product Harley wants to develop for the Indian market. India features prominently in Harley's plans, Anoop Prakash, managing director, Harley Davidson India, says, and efforts are on to make it the largest in Asia over the coming decade.

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"Last year, as many as 1,000 superbikes were sold in India. The industry is growing at over 20 per cent every year and strong double-digit growth should sustain over the next eight to 10 years," says Prakash.

The company, which opened its first authorised dealership in the country in July this year, expects to sell 200 to 250 bikes by the end of the year.

"Demand is good and we should be able to establish ourselves as market leaders in the next two or three years."

To strengthen its foothold in India, the company has set up an assembly facility at Bawal.

The move would help Harley to save on import tariff and re-work pricing of its products for the Indian market.
It is the company's second assembly unit outside its home base, the US -- the first is in Brazil.

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Import duty and local taxes on completely-built units amount to as much as 100 per cent of US prices.

Once the proposed assembly unit becomes operational in the first half of 2011, the impact of import tariff will be reduced to nearly 40 per cent.

"We will announce the revised prices of our models in January. The intention is to make our bikes more accessible to people here. The potential is good and I expect India to become our largest market in Asia in the coming decade."

Worldwide retail sales for Harley-Davidson fell 7.7 per cent to 58,849 during July-September, compared to 63,729 units in the year-ago period, on weak consumer spending in the US.

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The company expects 40 per cent of its revenues from motorcycle sales to come from international markets by 2014, compared to 27 per cent at present.

John Olin, chief financial officer, Harley Davidson, has been reported earlier saying, "We believe the long-term prospect (in China and India) is extraordinary."

Harley-Davidson sells 12 models belonging to five families -- Sporster, Dyna, Softail, V-Rod, Touring -- priced between Rs 695,000 and Rs 34.95 lakhs (Rs 3.49 million) in India.

At the moment, the bike maker hawks its products through authorised dealerships in Delhi, Mumbai, Chandigarh and Hyderabad, and is looking at opening an outlet in Bengaluru later this month.

With demand filtering in from Tier-II cities as well, Harley is looking at opening showrooms in Chennai, Ahmedabad, Kolkata and Kochi next year.