Victory Motorcycles is looking to continue its strong sales growth by taking its Harley-Davidson alternative of a product line to the Indian market. Expecting to enter India in Q2 of 2012, Victory will first import fully-assembled motorcycles into the huge Indian market. Victory also plans on setting up an assembly plant, so the company can import partially-constructed machines into the country, and thus sidestep the massive tariffs India levies on fully-assembled motorcycles imports.
Victory’s plan to first import fully-assembled models into India stems from the company’s desire to gauge the market’s response to its entry. Presumably the American company will be taking a loss on the sale of each bike, as Indian tariffs nearly double the cost of the motorcycle. However if sales are positive, and Victory goes forward with plans to make an assembly plant, the American company can benefit from price reductions starting at 30% off the tariff rate.
With this news, Victory becomes not only another manufacturer to see the future of their sales coming from outside the borders of the United States, but to also consider taking the considerable cost benefits of setting up local operations, in some form or another, in India. The move is not all that dissimilar from the recent announcement we heard from Ducati that it would be setting up an assembly plant in Thailand, in order to better serve the southeast Asian markets. Honda, Kawasaki, Suzuki, and KTM also have local production in India, while Ducati, Aprilia, and Hyosung import into the growing market. BMW plans on entering the Indian market soon as well.