US cult bike maker Harley Davidson today said it will not hike prices of its two models to be assembled in India despite an increase in import duty for completely knocked down (CKD) parts.
The company, which is setting up an assembly unit at Bawal in Haryana, said it is evaluating options in the wake of the new CKD norms that have resulted in higher import duty.
“…We are firm in honouring our commitment to our dealers, customers and enthusiasts across India, and are delighted to announce that we will maintain our current prices on our CKD models, the Iron 883 and SuperLow, for this calendar year,” the Harley-Davidson India Managing Director, Mr Anoop Prakash, told PTI.
In December, the company announced that the SuperLow and Iron 883 will be the first two models to be rolled out of the CKD assembly facility at Bawal in Haryana. The bikes are priced at Rs 5.5 lakh and Rs 6.50 lakh (ex-showroom), respectively.
These models will be available across the five Harley Davidson dealerships, in addition to the existing model line-up in 2011. Its other 12 fully imported bikes in India are priced between Rs 7.5 lakh and Rs 34.95 lakh.
Mr Prakash said at present the company is assessing what strategy would it adopt going forward.
“Regardless, we remain committed to the Indian market for the long-term and will now evaluate whether we invest in adapting our operations to the new CKD standards or manage our business to the higher duty rate,” he said.
In the Budget 2011-12, the Finance Minister, Mr Pranab Mukherjee, introduced a new definition regarding CKD kits imports that excluded pre-assembled engine, gear box, transmission and chassis from its purview. This resulted in increased customs duty to 60 per cent for these critical components. It was later revised to 30 per cent.
“We respect the government’s decision, even while we had shared our view that the increase in duties at this time may affect the development of the leisure motorcycling segment,” Mr Prakash said.
In November 2010, Harley Davidson announced to start assembling bikes in India from this year. The US iconic brand was allowed to enter India in 2007 with relaxed emission norms for big bikes above 800cc, while mangoes from here were allowed to be sold in America.
However, it first started selling its imported bikes in India from this year. The Indian plant will be only its second facility outside its home-base after Brazil.
Source – Businessline