Harley-Davidson says it still hopes to sell in India
(Published Wednesday, May 2, 2007 10:28:21 AM CST)
A d v e r t i s e m e n t
By Emily Fredrix Associated Press
MILWAUKEE - Harley-Davidson Inc. on Tuesday denied a media report it was abandoning its quest to sell bikes in India, saying it still wants to enter the motorcycle-hungry market, but wants tariffs reduced first.
The motorcycle maker has been trying for some time to enter India, considered one of the world's top markets for two-wheel motorcycles, primarily used as an inexpensive form of transportation.
Last month, it crossed a significant hurdle when Indian trade representatives agreed to lower the country's stringent emissions standards on motorcycles to levels used in Europe. But in talks with U.S trade representatives, Indian officials did not agree to lower the 60-percent tariffs on nearly all motorcycles.
Bob Klein, a spokesman for Milwaukee-based Harley, said the company saw the emissions reduction as a good first step but it wants tariffs lowered. Considering the tax rate on bikes is 30 percent, the addition of tariffs nearly doubles the cost of bikes, he said.
"We continue to be hopeful for and are actively working toward resolution on the tariffs. But we have not scrapped plans to enter India," Klein said.
Financial newspaper Mint quoted Tim Hoelter, Harley's vice president of government affairs, as saying the company looks forward to entering India, "but now does not seem like the right time."
Klein said no entry into the market is imminent but Harley continues to look there and at other emerging countries.
Harley president and CEO Jim Ziemer told shareholders at the company's annual meeting Saturday that the iconic motorcycle maker would continue to increase its presence overseas and look at entering growing economies, like China, Vietnam and India.
About 20 percent of its bikes are sold overseas, and that number is expected to grow. Harley is the market leader in Japan, Canada and Australia, besides the U.S., where it has nearly half the market. In the most recent quarter, Harley reported international sales were up 16.5 percent, while domestic sales were down 5.9 percent. Overall, worldwide retail sales of the company's motorcycles dropped 1.3 percent in the first three months of the year.
Ziemer told shareholders the company not only faces governmental barriers to trade and riding when it comes to entering countries like India and Vietnam, it must show people in growing countries that riding can be for recreation, not just an inexpensive form of transportation.
"It's also a challenge to introduce the concept of recreation riding in emerging markets," Ziemer said.
Shares of Harley rose 12 cents to close at $63.44 Tuesday on the New York Stock Exchange.
