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Harley-Davidson set to finally ride into India
Livemint, 22 August '09
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In 2007, after some mangoes-for-bikes diplomacy, it looked like iconic bike maker Harley-Davidson Motor Co. was ready to ride into India, but that wasn't to be.

That entry, however, may happen as early as next week when Matt Levatich, president and chief operating officer of the company visits India, said a person familiar with the matter who did not want to be identified. Levatich has been invited as one of the speakers at the annual convention of industry body, the Society of Indian Automobile Manufacturers, on 28th August.

"Harley-Davidson continues to lay the groundwork for our market entry into India. We are making good progress on our overall plan to enter the market, and will have more details to share at the appropriate time," wrote a company spokesperson in response to an email questionnaire seeking details on when the company planned to enter India.

Accompanying Levatich is Anoop Prakash, who has been appointed the India managing director at Harley-Davidson. Prakash, who graduated from Harvard Business School, previously worked at the US department of housing and urban development and workflow solutions firm Lexis-Nexis.

Specific details on which models the company plans to launch were not available. Harley-Davidson was first granted permission to start operations in India by the Foreign Investment Promotion Board in April 2007. In exchange, the US government allowed the import of mangoes from India after a gap of 18 years.

But Harley was forced to abandon plans to enter the Indian bike market as the duty structure made importing unviable. Import of completely built up, or CBU, units of automobiles are taxed at the rate of 104% in India. The company had then said that this would put its products out of reach for Indian consumers.

"We are looking for some concessions from the government... We want to enter India as it is a key market but we don't know when will it be," Tim Hoelter, vice-president of government affairs at Harley-Davidson, had told reporters in May 2007.

Before 2007, the country's ministry of shipping, road transport and highways had blocked the entry of Harley-Davidson's bikes saying that the country lacked emission norms for bikes with an engine capacity exceeding 500cc. The government then agreed to recognize Euro III emission norms for bikes with an engine capacity of 800cc and above.

Duty rates at present would likely result in Harley-Davidson pricing its bikes at between Rs. 400,000 and Rs. 1.4 million. But that is unlikely to deter prospective customers as the market for superbikes has been doing well in India. Superbikes, which have a large engine displacement of around 1,000cc, are priced anywhere between Rs. 900,000 (US$ 18,600) and Rs. 1.2 million in India.

Manufacturers such as India Yamaha Motor and Honda Motorcycle & Scooter India (HMSI), which at present import these bikes, say they had underestimated the potential size of the market. While manufacturers had initially estimated there was a market for 300 such bikes every year, sales have shown the number is closer to 450-475, according to Debsena Banerjee of Segment Y Automotive Intelligence, a Goa-based consultancy.