MUMBAI: Sales of high-end luxury motorcycles in India have swelled. Within weeks of the government reducing import duty on superbikes by 5-25%, dealers of fully-built imported motorcycles in the 500 cc and above segment are reporting double-digit growth in sales.
Harley Davidson and Indian Motorcycle, two of the oldest motorcycle manufacturers, and Triumph Motorcycles have registered double-digit growth in despatch in March. Buoyed by the response, some of these companies are anticipating double-digit growth in India sales in 2018 after two years of slump.
Combined sales for February and March in the 500-1,000 cc segment grew by 12% from a year ago to 1,391 units, whereas the 1,000 cc and above category saw a 41% jump to almost 500 units. “Last year we had seen a decline of 20-30% in our volumes due to multiple factors, including duty hike. This year due to price correction, we are expecting a healthy growth of 60-70%,” said Pankaj Dubey, managing director of Polaris-owned Indian Motorcycle.
Harley Davidson India’s spokesperson was not available for comment. Fully-built imports account for 10-15% of the nearly 7,000 superbike (above 500 cc) sold in the country every year.
Earlier, import of motorcycles with engine capacity of 800cc or less attracted 60% duty while those above 800cc attracted 75% duty. The Central Board of Excise and Customs (CBEC) on February 12 slashed the duty on both these categories imported as completely build units (CBU) to 50%, which led to price reduction ranging from Rs 1 lakh to Rs 5 lakh, depending on the segment.
In its notification, the CBEC also said that import duty on engine, gearbox or transmission mechanism as a completely knocked down (CKD) kit in pre-assembled form of motorcycles, not mounted on a body assembly, has been reduced to 25%, as against 30% earlier.
But while the duty cut incentivised sales of imported superbikes, the ones locally assembled saw a tax increase of 5.75% in the Budget.
Although price reduction has revved up sales, Dubey termed it as shortterm burst. For development of the market in the long term, there should be competitive rates for a company like Polaris to invest in local assembly, he said.
Vimal Sumbly, managing director of Triumph Motorcycles India said that with 80-85% of his portfolio locally assembled, the company has had to face the brunt of tax hike.
“The duty cut for imported bikes has positively impacted just 10-15% of the market and we expect the momentum to help the overall market in 2018, where we are expecting doubledigit growth after two years,” Sumbly said. “What is the incentive for ‘Make in India’?”
Sumbly said he is hoping for a level playing field. “Fully-built bikes imported under FTA from Thailand attracts 0%, whereas CKD imports attract 15.75%, which will prompt others to import instead of making it locally,” Sumbly said.