announced it will open an assembly plant in the Indian state of Haryana where certain models will be built from U.S.-supplied kits. The move will help circumvent import tariffs and eventually allow The Motor Company to drop prices on its motorcycles in India by an estimated 20-25%. Complete knock-down (CKD) kits draw taxes of approximately 60% while fully assembled imported motorcycles are levied a 110% tax rate.
“CKD assembly operations in India are a natural next step for Harley-Davidson as we build our brand presence
Harley-Davidson announced it is opening an assembly plant in India in the state of Haryana where certain models will be assembled from U.S-supplied kits.
around the world,” said Harley-Davidson Motor Company President and Chief Operating Officer Matthew S. Levatich in the official PR. “This investment will allow us to improve our market responsiveness and production flexibility while reducing the tariff burden, which we expect will drive growth over time by making our bikes more accessible to India’s consumers. Given the strong response we have received in the initial months of retail operations, we believe this is the right investment for this important market.”
The Haryana plant is projected to be operational by the first half of 2011. The 70,000 square-foot facility is said to have the capacity to assemble about 200 bikes per year initially. The only specific Harley model mentioned that will be built at Haryana is the Sportster.
With the opening of the new plant, Harley-Davidson looks to expand its presence in the world’s second-largest motorcycle market. Incomes in India have been on the rise and a burgeoning middle-class with more disposable income has developed. The current high-displacement motorcycle market in the country is dominated by Japanese manufacturers.
Harley-Davidson started selling 12 models in India
in July of this year after establishing authorized dealers in New Delhi, Mumbai, Chandigarh and Hyderabad. The current H-D bikes sold in the Indian market come as completely assembled motorcycles built in the U.S., then shipped overseas. India joins Brazil as the second country in which Harley-Davidson has established a CKD assembly plant.
“We are committed to global growth and growth in India for the long term,” said Levatich. “India’s rapidly growing economy, rising middle class and significant investment in construction of new roads and highways are paving the way for leisure motorcycle riding.”
The announcement coincides with President Obama’s upcoming state visit to India to discuss trade and business opportunities between the two countries.