April 2, 2007 – Report: India opening its doors

India’s Commerce Ministry started the process of issuing a law that will allow the import of Harley-Davidson and other high-displacement motorcycles by the end of last month.
The move, reported in the Indian newspaper The Mint, is considered a goodwill gesture ahead of an uncoming visit by U.S. Trade Rep. Susan Schwab in the second week of April.
In the past, The Ministry of Shipping, Road Transport and Highways had blocked earlier attempts by H-D to import its motorcycles into the country, citing the fact that India doesn’t have any prescribed emission norms for motorcycles with engine capacity exceeding 500cc. The ministry has now agreed to recognize Euro III (followed in Europe) emission norms for the motorcycles.
Contrary to an earlier proposal that was being discussed, the commerce ministry will not place any ceiling on the number of motorcycles that can be imported. A ministry official, who did not wish to be identified, said the high price of the product and a 60 percent import duty would deter mass imports.
H-D doesn’t expect to sell too many motorcycles in India, according to the official, who said the company has told the Indian government it hopes to import 2,000 of its products to India during the next three years.
India’s 6-million-a-year motorcycle market is dominated by fuel-efficient motorcycles with engine capacity of 100cc. According to government statistics, these are the nation’s main mode of transport and eight out of every 10 motorcycles sold in the country is a commuter bike.
Honda, Yamaha Follow
Reacting to the Indian government’s decision to allow the import of H-D’s bikes, Yamaha and Honda said they also are looking to introduce heavier bikes in the country.
“That’s good news,” said Tomotaka Ishikawa, managing director of Yamaha Motor India Pvt. Ltd. “We’ll be looking to introduce, selectively, some of our larger models.”
He didn’t specify the models. Yamaha has already applied for certification of the bikes it might bring in.
India’s two-wheeler market is dominated by Hero Honda Motors Ltd. and Bajaj Auto Ltd., which make every eight of 10 bikes sold in the country. Yamaha, which entered the market 20 years ago, has a 3.6 percent market share and is looking to revive its Indian operations.
Honda Motorcycles, which began importing its smaller bikes into India in 2001, owns a 55 percent market share in the country’s scooter segment. Its two motorcycle models, the Unicorn and Shine, have a 2.5 percent share of the motorcycle market. PSB