Harley-Davidson Outsourcing Motorcycle Production. To India.
I’ve got good news and I’ve got bad news for you, so I’ll start with the good: if you live in India, buying a Harley-Davidson may soon cost you fewer rupees. Now for the bad: if you build Harleys in America for export to India, you may soon find yourself with less work. Harley-Davidson has announced the opening of a new assembly plant in Haryana, India, specifically to build bikes for the Indian market. Components will be supplied from Harley-Davidson plants in the U.S. and Brazil, and final assembly will take place in Haryana. One reason is the huge tariff the Indian government slaps on imported motorcycles, which Hell For Leather tells us is equal to 60% of the bike’s value. Indian labor is also less costly than American labor, which should help lower the cost of product in the Indian market, thus increasing Harley’s market share.
Harley-Davidson began selling bikes in India in August of 2009, and views the Indian market as essential to their continued growth. Several factors contribute to this perception, including the expansion of roads and infrastructure throughout India, the popularity of motorcycles as a primary means of transportation and the growing middle class, who finally have sufficient disposable income for luxury items like large displacement motorcycles. The Haryana plant will be operational by the end of Q2 2011.