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Most of our customers are upgrading from Royal Enfield: Anoop Prakash

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After the famous Indo-US “Harley for Indian mango” deal in 2007, the American icon Harley-Davidson announced its entry through a wholly owned subsidiary — Harley-Davidson Motor Company India. Following an extensive study of the market, the iconic brand finally hit the Indian roads in July 2010. Anoop Prakash, who is spearheading the Indian operation of the company, tells Probal Basak the 18-month journey has been “more than satisfying”. Clocking in sales of more than 1,000 units so far, the company is keen on assembling more (motorbike) models at its India factory at Bawal to drive volumes. Edited excerpts:

When Harley-Davidson made its entry to India, you said it was not a part of the brand-building exercise. You want to be a serious player in the market. How do you evaluate the company’s journey in India so far?
We are more than satisfied with our journey. We could not ask for more.When we thought about opening this market, we knew we are going to build and serve a whole new market segment. This is actually the first market where we entered with a wholly owned subsidiary. We have set up an assembly plant at Bawal in Haryana. All these are strong indicators of how serious and ambitious we are about the Indian market.

Although we entered the market in 2009, we opened the first showroom in 2010. From July 2010 to end of December 2011 — in the 18-month period — there are over 1,000 bikes on Indian roads.

Where do you see the numbers in the coming years?
This year also, we will hopefully cross 1,000. We are looking at a 25-30 per cent yearly growth for the next five-seven years.

We will be extending our footprint by the time. We have opened our eighth dealership in Kolkata.We will open in Kochi and Goa this year, as well. We also have our eyes on Nagpur. We are finding out where we can find our customer. I have a feeling some of North-Eastern cities can be our destinations, as people in this part of the country have a great passion for biking. We have a target of having a 17 to 20 dealership by the end of 2015.

How important was it to have an assembling plant to drive volumes?
As of now, we have five assembling models and 11 CBUs (completely-built units). Moving the price down through CKD (complete knock-down) was important for us. The price of an 800cc bike model that sold at nearly Rs 7 lakh when it was imported, came down to Rs 5.6 lakh after it was assembled locally. In fact, our CKD line-up is driving 70 per cent of our volumes.

So, are you looking at assembling more models at the Bawal plant?
We will start assembling another Dyna model this year, taking the total number of CKDs to six.

We have ample capacity for assembling more units at our plant. We are trying to get customer feedback and find out which models are in demand. Right now, we are focused on assembling Sportster and Dyna models. Of the five CKDs, three are from the Dyna range and two from Sportster. There are three-four more bikes in Dyna and Sportster family itself, which are not on offer in India yet. So, there is obviously scope for assembling more units.

Is the increased tariff or negative market sentiment affecting your growth?
There was a lot of uncertainty whether or not the tariff would make the investment worth it, as the motorcycles are effectively going to cost twice as much as in the US. Harley-Davidson’s bikes in India are priced between Rs 5.6 lakh and Rs 35 lakh.

Moving down the price point through CKD has helped us to some extent. And, despite an increased tax in the recent Budget and not that great a market sentiment, the demand of Harley remains unaffected. At the end of the day, we are able to reach out to our customer that Harley is not a product, it is a lifestyle.

Do you have any intention to go below 800cc for India-specific products? Are not Indian players like Royal Enfield that offer 500cc bikes with a much affordable price range better positioned for the Indian super bike segment?
We can not go below 800cc. We cannot have an India-specific product. All our products are for global markets.

And, regarding Royal Enfield, I think it is a great compliment for us, rather than a competition. Most of our customers are upgrading from Royal Enfield. For me, competition is if somebody is doing something else on a Sunday morning because I want him to experience Harley Davidson during that time.