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Harley Davidson to assemble bikes in India from next year

Days ahead of President Barack Obama's visit, US cult bike maker Harley Davidson today said it will start assembling bikes in India from next year.The US iconic brand was allowed to enter India in 2007 while mangoes from here were allowed to be sold in America.

autos Updated: Nov 02, 2010 15:33 IST

Days ahead of President Barack Obama's visit, US cult bike maker Harley Davidson on Tuesday said it will start assembling bikes in India from next year.
The US iconic brand was allowed to enter India in 2007 while mangoes from here were allowed to be sold in America.

However, Harley Davidson first started selling its imported bikes in India from this year. The Indian plant will be only its second facility outside its homebase after Brazil, the company said highlighting the significance of economic ties between the two countries. "President Obama's visit is not only a strategic one but it has economic interests.

The strengthening of business ties between the two countries (US and India) gives us the confidence to invest further here," Harley Davidson India Managing Director Anoop Prakash told reporters.

After prolonged negotiations, India had relaxed emission norms for big bikes above 800cc in order to let Harley Davidson sell its products here after the US agreed to allow Indian mangoes to be sold there in 2007.

The assembly plant will come up at 70,000 square feet of land at Bawal in Haryana.

"The plant is likely to be operational by the first half of next year and investments in it will be a part of tens of millions of dollars that we are making in India," he said.

Prakash, however, declined to specify the installed capacity of the plant that would assemble completely knocked down (CKD) units of bikes. Local assembly of the bikes will result in a significant drop in the price due to difference in import duties.

"CKD is important for us in order to make the bikes more accessible. For example, duty tariff for import of a completely built units is 60 per cent, while that on the parts is 10 per cent," Prakash said.

He said the company will assemble only a few models out of the 12 bikes that it sells in India priced between Rs 7.79 lakh and Rs 38.66 lakh. "The Sportster family of four bikes has the largest demand."

The company, which started selling its products since July this year, is expecting sell 200-250 units by the end of 2010, Prakash said.

Stressing on the potential of the Indian market, Prakash said the super premium bike segment is estimated to be around 1,000 units last year and is growing at 20 per cent.

Commenting on the plans, Harley-Davidson Motor Company President and Chief Operating Officer Matthew S Levatich said, "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".

Harley-Davidson currently has four dealerships with the fifth one coming up next month in Bangalore.

It plans to add three more next year and is looking for locations in Kolkata, Ahmedabad, Chennai and Kochi.