US President Donald Trump has said in his address to Congress on the 1st of March that Harley-Davidson has expressed concern that its motorcycles faced tariffs as high as 100 per cent in overseas markets. Although Trump didn’t specifically mention India, import tariff on luxury motorcycles in India are over 100 per cent. Harley-Davidson’s export sales account for over 30 per cent of motorcycles sold outside the United States. Earlier this month, Trump met Harley-Davidson executives in Washington and said in his address that he was told business was good, but could be better in other countries.
“They told me – without even complaining because they have been mistreated for so long that they have become used to it – that it is very hard to do business with other countries because they tax our goods at such a high rate,” Trump said. “They said that in one case another country taxed their motorcycles at 100 per cent.”
“We must create a level playing field for American companies and our workers. When foreign companies ship their products into America, we charge them nothing or almost nothing,” Trump said.
But the fact is that despite the tariff, Harley’s sales have grown by over 30 per cent in the past two years, and Harley-Davidson dealerships have increased to 27 in 17 cities across India since the cult American brand started operations in India. In the Indian premium motorcycle space, Harley-Davidson has a market share of over 50 per cent in the segments ranging from 800 cc bikes to over 1600 cc bikes. And H-D India’s completely built units (CBUs), bikes which are imported as finished products and are eligible for the 100 per cent import duty, account for just over 20 per cent of average bikes sold by Harley in India. And these CBUs are only the more expensive touring range, while Harley-Davidson India’s bulk of sales come from the made in India Street 750. HD India was asked for a comment but did not revert to our questionnaire.
In 2016, Harley-Davidson reported its best-ever retail sales in the Asia Pacific region as well as Europe, Middle East and Africa, growing by over 5.9 per cent. And the Milwaukee-headquartered motorcycle brand will be looking at developing more dealerships outside the United States and reaching out to new markets, Harley-Davidson CEO Mark Levatich had said in early February.
Clearly, the focus will be on export markets and India will continue to be an important market where the premium motorcycle space of over 500 cc is seeing double digit growth year on year, with premium bikes available even on easy finance schemes. The demand to reduce import tariffs will not only help Harley-Davidson but make all luxury motorcycles all the more affordable to the Indian consumer. And that is a demand voiced by most premium motorcycle brands in India.