Harley Davidson India's plant has become a necessity in the wake of competition from other niche motorcycle brands such as BMW, Kawasaki, KTM and Hyosung. The Indian plant will help Harley Davidson bring down production costs and hence the price of its motorcycles.
Harley Davidson India is currently importing some motorcycles that are assembled in its plant in Thailand while some models are being assembled in a facility in Haryana. The American Motorcycle manufacturer which sold just over 700 bikes last year is now selling about 100 bikes per month. The increasing volumes could have also lead to Harley Davidson's decision to open a new plant in India.
Harley Davidson's Indian plant will see increased localization of parts which will in turn help keep costs down. Although Harley Davidson is a niche manufacturer with a huge brand image, pricing will become a key factor for its customers considering its cheapest bike costs just under Rs. 6 lakhs. On the other hand cruise bikes from Hyosung cost as much as Rs,2 lakhs less than Harley.
Reports say Harley Davidson officials are scouting for an ideal location to set up a plant and the process is still in its initial phase. Harley Davidson is assembling only some entry level bikes in India. The fully assembled bikes that are imported from Thailand are comparatively more expensive considering the huge import taxes and duties.
An Indian plant will help Harley Davidson to completely remove the cost of import taxes in the final price of a bike. The price of a Harley Davidson bike can come down by as much as 25%. India is a very important market for the American firm as the country is the world's second largest two wheeler market.