Will Harley Davidson become more affordable? "The Trump Effect"
History
India since 1947 has been the tariff king of the world. Imposing highest tariffs on Automobiles, Electronics and any "Non Essential" and Luxury goods from foreign nations. In 1947, only the richest and the elite had the power to bring the latest tech and automobile from foreign nations. Until 1991, After Late Manmohan Singh (then Finance minister opened up the domestic market to International Players.
What’s happening now?
Under President Biden’s rule, India was enjoying a net exporter relationship with the US benefiting India in the bilateral trade. A big chunk of this business were automobiles. Specifically Ford and Harley Davidson Motorcycles.
October 2024, Trump called India the “Biggest tariff charger” and he also vowed to reciprocate the same taxation if India continued to do so.
Prime Minister Modi enjoys a good friendship with President Trump but this time Trump is going all out and bashing India on the higher tariffs.
Trump has been in the media lately commenting on India at multiple occasions about the high taxation.
India’s slowing economy
India lately has been going through some economic slowdown due to global conditions. However – Globally India continues to enjoy the top 3 position in “Fastest Growing GDPs in the World” as per World bank and IMF reports
India imposes a flat 100% tariff on any vehicle imported to India from abroad. This meant that automobile manufacturers paid as much as 150% tax upon the sale.
OEMs in India have long complained the lack of clarity on logistics and policy. This makes it difficult to plan the business. Calling it the “Fight or flight” mode.
Harley Davidson USA too went to the White House to get diplomatic help and Trump has heard.
Harley Davidson in India
Harley Davidson started its operations in India in 2010 close to when all the major brands started to set foot in India. With high aspirations to kick start with, Harley started to sell a majority of their global portfolio in India.
Source – Business Standard
but there were no takers! In a country of 100 crore people. Harley struggled to sell anything more than 4700 units. At the same time – Brands like Audi, Mercedes and BMW were posting record numbers since their India operations
Harley has long struggled to sell its bikes in India due to the high tariffs and duties. Bringing its bikes close to 2x the price of what it is sold in the US and it made the business question its presence in India!
Harley Davidson stopped their India operations in January, 2021 and handed over sales and aftersales to its beloved partner – Hero MotorCorp.
Harley still struggled to sell their “Harley X440” – selling only 459 units in June 2024.
The “Trump Effect”-
The United States is one of the only countries which benefits India in Net Trade. India exports more services and products. Helping India massively financially.
Quickly after Trumps reciprocal tax against Colombia. India did not want to be part of the cross fire. India quietly reduced the taxes on Imported bikes and cars from the USA
The reduce in taxation could mean that Harley Davidson will pass it on to the consumers and lower the prices making the brand more lucrative in India.
Thumbnail Credit - Rahul Nagaraj (TeamBHP)
(https://www.team-bhp.com/news/harley-davidson-showroom-service-experience-post-india-exit)