It’s well-known that motorcycles have long been popular transportation in India, but we’re talking about small displacement bikes. So how do heavyweight Harley-Davidson cruisers fit into this picture?
Only in the past few years have Harleys started to appear on the streets on India, but with the opening of an Indian assembly plant in 2011, Harley-Davidson is looking to increase their sales ten-fold by 2016.
The Indian Motorcycle Market
Harley-Davidson first began importing their motorcycles to India in 2010 looking to cash in on the second fastest growing two-wheeler market after China. Trade negotiations between the US and India had been initiated three years earlier, but any agreement was delayed due to high tariffs and a lack of emission standards in India for bikes over 500cc.
The two countries finally came to an agreement that allows India to export mangoes in exchange for importing US Harleys.
When the first Harleys arrived in India in July 2010, they were met with a positive response despite the fact that buyers had to pay over 100% in import taxes. However, Harley-Davidson knew that if they were really going to break into the market, they would have to find some way to bring down the prices on their motorcycles.
The best way to get around the import taxes is to build the bikes in India, so they decided to set up an assembly plant in the northern Indian state of Haryana.
CKD Factory in India
The Harley-Davidson facility in Haryana began assembling complete knock down (CKD) kits in the first half of 2011. These CKD kits are manufactured in the US and include everything you need to build up Harley. By shipping their bikes over in parts, Harley-Davidson has been able to avoid high import tariffs and significantly lower their retail prices. This plant is only the second CKD facility outside of the US, with the first located in Brazil.
As of now, Harley-Davidson is assembling 6 of its 15 models available in India at the Haryana plant. This number jumped up from 5 after two new models, the FXDB Street Bob and the FXDC Super Glide Custom, were well received at the 2012 Auto-Expo in India.
Meanwhile, Harley-Davidson is focused on expanding its reach throughout India by adding more dealerships across the country. To date, there are 7 dealerships in India, but the company is looking to have 10 in place by the end of 2012.
Indian Bikes Coming Back to US?
Nope. There seems to be a lot of confusion out there about how the CKD system works. Many just see the words “India” and “Harley-Davidson” in the same sentence and figure that their beloved brand has stooped to outsourcing.
Manufacturing still takes place in the United States, it is only the assembly of the US-made parts that happens in India. It’s certainly possible that the bikes might not be assembled under US standards, but they won’t be coming back into the American market. The fact is, these Harleys are being built in India for Indian riders only.