Triumph readies to take on Harley Davidson, will cut costs via local assembly

Indian auto sector may be down in the dumps due to high interest rates and economic uncertainty, but that is not deterring majors from betting on the country’s long-term potential. Especially so in the premium motorbike segment.

As Vimal Sumbly, managing director, Triumph Motorcycles India, the UK bike maker which entered India last month, says in a report in the Business Standard, the segment is expanding. In 2008-09, only 450 premium bikes were sold in India. Now, the figure is 3,000.

“The per capita income in India is increasing, customers now have access to varied brands, riding infrastructure has improved. Given all these factors, the market can only grow from here,” he has been quoted as saying in the report.

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Triumph has thriving competition from the likes of Harley Davidson, Royal Enfield and BMW, and is looking for ways to be more accessible to potential clients. The company is devising ways to take the rivals head on.

According to the_Business Standard_ reportof the 10 models Triumph brought to India, six will be assembled locally at the company’s Haryana factory. These models are all priced under Rs 10 lakh. On offer are classics (Bonneville), roadsters (Street Triple, Speed Triple), supersports (Daytona), adventurers (Tiger 800) and cruisers (Thunderbird Storm), Sumbly, has been quoted as saying in the report.

Triumph has set a target of selling 1,000 units within the first year and has set up a wholly owned subsidiary in the country. Dealerships will start opening this month in Hyderabad and Bengaluru, followed by Delhi, Mumbai, Calcutta, Chennai and Pune.

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Importing parts and assembling units in India will also help Triumph cut costs as Harley Davidson has learnt. TheUS bike manufacturer has set up local assembly units to take advantage of lower tax rates (about 30 percent as opposed to 100 percent duty for fully assembled units). According to the Economic Times, the strategy helped Harley Davidson reduce the price of its Fat Boy by nearly 30 percent to around Rs 15 lakh. The company now plans to make the CKD (completely knocked down) facility in Haryanainto a full-fledged manufacturing base to roll out Street 750 and Street 500 models.

Triumph has alsopurchased land in Karnataka but Paul Stroud, global director (sales and marketing),refused to comment on what use the plot will be put to. However, ET states that next year the company plans to launch its new 250 cc version of the Daytona from a plant near Bangalore.