Indian Motorcycle could be assembled in India for the local market from 2018 under expansion plans by owner Polaris Industries.
Polaris India boss Pankaj Dubey dropped the first hint in July when opening the third Indian Motorcycle dealership in the country and he has been more emphatic at the opening of the fourth dealership.
“We are considering an assembly plant in India as part of our long-term plan,” he told India’s Financial Express.
“We are looking at a time horizon of about three to five years to set up an assembling plant in India.”
India is the world’s second biggest motorcycle market and motorcycle companies as diverse as BMW, Ducati, Triumph and Harley-Davidson have been adding dealerships, assembly plants and even manufacturing factories in the country to cash in on the burgeoning middle class.
Under Indian import duties, complete imports incur a massive 105% duty, more than doubling their price.
Locally assembled bikes attract a greatly reduced duty depending on a complex formula involving engine capacity and local content, while locally built motorcycles, such as the new Harley-Davidson Street family, attract no import duty, only normal taxes.
Pankaj says Indian currently sells about 1000 units, but he is hoping to increase that number with an expansion of dealerships up to 12 by the end of 2016.
“With a very high import duty of 105%, the motorcycle cost works out to twice what is sold in the US. Since we bring fully-built units, an Indian buyer pays more,” he says.
“But this number is set to go up as import duty structure comes down.”
It could also be tempting for Indian Motorcycle, like Harley, to go a further step and have the vehicles built in India and then exported to countries such as Australia. Cheaper manufacturing costs would lead to cheaper prices.
India, Thailand and, to a lesser extent, Malaysia, are the emerging centres for motorcycle production with factories making or assembling bikes for BMW, Honda, Yamaha, Harley-Davidson and Triumph.