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Harley-Davidson to build bikes in India

By Sara Sidner, CNN
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Harley-Davidson in India
STORY HIGHLIGHTS
  • Plant will assemble U.S.-made parts in northern India
  • Move significantly lowers import duties on bikes
  • India is the second fastest growing two-wheeler market in the world behind China

New Delhi, India (CNN) -- Harley-Davidson, the iconic American motorcycle brand with a cult-like following, has announced it has chosen to build its second assembly plant ever outside the United States in India.

The "complete knock down" plant or CKD is expected to be up and running in the northern Indian state of Haryana in first half of 2011. Parts made in America will be put together for the Indian market in Haryana.

"What we are doing is made in USA, assembled in India, which will have a positive job effect back home which is why we are driving this investment as quickly as we are," Anoop Prakash managing director for Harley Davidson India told CNN.

The company is trying to expand its brand internationally from 30 to 40 percent by 2014 according to Prakash and India plays an important role in that.

I remember seeing Harley Davidson and the Marlborough man, remember the old movies. It made people look so cool.
--Vikram Bhalla, Indian owner of a Harley-Davidson.
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"We see a distinctive credible growth story here, growth opportunity," he said.

India is the second fastest growing two-wheeler market in the world behind China. More than 10 million two-wheelers were sold in India in the 2009-2010 fiscal year.

Beyond the obvious market potential there is another major reason Harley-Davidson is building an assembly plant in India -- to bring down India's import duties which right now are so high Indian consumers pay double for fully assembled imported vehicles.

Exporting just the parts to India could lower the import duty tariffs by around 40 percent, according to Prakash.

Harley-Davidson's story in India began in 2007 with a trade agreement that allowed India to export mangoes to America in exchange for allowing the United States to export Harley-Davidsons to India.

The company said it is on target to sell 200-250 bikes in the first six months in India. The high-end bikes went on sale in the county in July 2010.

Gurgaon resident Vikram Bhalla was the first to ride off with one in India.

"I've always wanted a Harley when I was growing up. I had little posters on my wall. I remember seeing Harley-Davidson and the Marlborough man, remember the old movies. It made people look so cool, so I thought why not?" Bhalla said.

The company hopes there are many more people like Bhalla in the India market. Harley-Davidson is opening its fifth dealership in Bangalore, India this month.

 
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