Harley roots for free and fair trade policies
India MD Sajeev Rajasekharan says company will stick to the ‘rule of the land’ to do business.
Sajeev Rajasekharan, Harley-Davidson’s managing director for India, told ET that 13 of the 17 motorcycles in its lineup are assembled locally and, therefore, import duties have nominal impact on the company’s CBU operations in the country. India reduced import duties on CBUs to 50% and raised those on CKD (completely knocked down units) to 15% last year, which affected the company local assembly operations.
He said the company has had no dialogue with the Indian government to reduce taxes and, as in all other countries, will stick to the “rule of the land” to do business.
Terming India “a very high-tariff nation”, US President Donald Trump recently said he will end preferential treatment for a host of Indian goods that now enter the country “duty-free”. India will no longer receive benefits under the Generalized System of Preferences (GSP), which was set up to promote trade from developing countries.
The action comes after months of simmering trade tensions between the two countries. Trump had particularly cited the instance of Harley-Davidson at the Conservative Political Action Conference (CPAC) earlier this month saying, “When we send a motorcycle to India, they charge 100% tariff. When India sends a motorcycle to us, we charge nothing.”
Rajasekharan said, “As a company, our position on the trade and tariffs has never changed. We work with all the governments across the world in terms of having a free and fair trade practice because it helps Harley-Davidson, our customers, our dealers and all our stakeholders…we follow the rule of the land, wherever it is.”
Harley-Davidson sells 17 motorcycles in the country priced between Rs 5.31 lakh and Rs 49.99 lakh. The company assembles over a dozen of these models at its facility in Bawal, Haryana.
“Out of the 17 bikes that we have in our line-up, 13 of them are either manufactured or assembled in India. There are four which come (in) so the volumes are very less. That is a niche segment also…The impact of the CBUs (completely built-up units) are minimal because it is only the 1600 cc+ which comes in,” Rajasekharan said on the sidelines of the launch of Forty-Eight Special and Street Glide Special models, which are priced at Rs 10.98 lakh and Rs 30.53 lakh, respectively.
The motorcycle maker sold 2,471 units in the local market in the first eleven months of the ongoing financial year—a decline of 16.5% compared with the corresponding period of the previous year. It expects sales to pick up in 2019. The company also plans to increase the number of dealer outlets to 33 and lifestyle stores to 10 in the course of the calendar year.
Given the push towards electric mobility, Harley-Davidson is studying opportunities to ride in its electric bike Livewire. Rajasekharan said, “We have unveiled the Livewire and we will start with the US and Europe markets (in August 2019). As and when the other markets are ready in terms of infrastructure, we plan to go in there too.” There is no timeframe defined for an India launch.