Luxury Motorbike Sales Accelerate in India

Every day India’s cities hum with the sound of hundreds of motorcycles precariously weaving their way through traffic. For most riders the two-wheeler is the cheaper and more flexible alternative to a car but for a growing band of more affluent Indians owning a customised superbike has become the ultimate symbol of the country’s new-found wealth.

Harley-Davidson motorcycles.
Daniel Roland
Harley-Davidson motorcycles.

Sales of premium bikes made by the likes of Italy’s Ducati, Japan’s Suzuki and Harley-Davidson of the U.S. have grown steadily over the past few years after New Delhi in 2007 agreed to permit the import of bikes with a more than 800cc engine as long as they met certain emissions standards.

Foreign brands say they are attracted by India’s rising income levels, growing demand for luxury goods and evidence of an organic motorcycle culture.

Germany’s BMW recently started selling superbikes through two of its dealerships. And last month Triumph, the iconic British motorcycle manufacturer that collapsed in the 1980s and was later resuscitated by a property tycoon, said it would move into India. The group has tapped Ashish Joshi – the former European head of Royal Enfield, the British motorcycle marque that was revived by India’s Eicher Motors – to lead its Indian charge.

Fans of the Rocket III and Daytona 675 have been urging Triumph to enter the Indian market for some time but the group says its focus has been on increasing sales at home and in developed markets such as the US and Italy.

Triumph, which produces just 50,000 bikes a year, last year launched in Russia and says moving into India now is about “getting a toehold” in a market with lots of potential.

Analysts say that while India’s broader bike market has seen double-digit growth over the past few years, the premium segment is still just a niche market.

Foreign companies are required to pay hefty import taxes that in effect double the cost of the bikes, although some manufacturers have sought to reduce costs by assembling bikes in India. And with prices starting from $9,000-$20,000, they say performance bikes are still out of the reach of many middle-class professionals.

“We have entered the Indian market at a time when leisure riding is at a nascent stage and feel we can shape that,” says Anoop Prakash, managing director for Harley-Davidson India. “I’m quite bullish. In 2010 the market for premium bikes stood at 1,000 units a year. My view is that the market could see a 10-fold increase over the next five to seven years in India.”

Ducati, meanwhile, says it expects to double the number of bikes sold in India to 200 in the next 12 months.

The units sold may be low but auto experts calculate that the high profit margins on each bike mean premium manufacturers are making money out of India. They often reap extra sales from merchandising or from customers who just want to soak up the super bike experience in cafés connected to the showrooms or at sponsored rock concerts.

But analysts say foreign brands cannot expect a smooth ride. Mr Prakash says India’s regulatory environment is not always easy to predict. On the one hand the government was very “encouraging” about Harley’s initial investment. But he says the industry was surprised when the government decided to raise the duty on completed knocked down (CKD) kits for car and bike manufacturers, based on a revision of the definition of CKD in India, from 10 per cent to 60 per cent in the April Union Budget. The government settled on a 30 per cent rise but Mr Prakash says the move “caught everyone off guard”.

Harley absorbed the rise in duty and remains committed to the market. But Mr Prakash says such moves “may give some of our peers pause for thought”