MILWAUKEE (AP) — Motorcycle maker Harley-Davidson has been hit hard by the U.S. economic slowdown, but the bright spot for Harley last year was growth in international markets.
Now, it could be even more in years to come with India recently changing a law that prohibited the Milwaukee-based company to export bikes to one of the world's most populous countries.
India's commerce ministry has now agreed to recognize European engine emission standards for motorcycle engines exceeding 800 cubic centimeters. Harley's bikes already comply with European Union standards.
India hasn't set a limit on the number of Harleys allowed in the country. But there is a 60 percent tariff on the imported bikes, plus another 30 percent or so in various taxes.
''The net effect is, the cost of a Harley in India is about double what it is here,'' Harley spokesman Bob Klein said.
Harley-Davidson sought the change in the law because there's long-term sales potential in India, which doesn't yet have a Harley dealership.
''It's one step for us,'' Klein said. ''But given the tariffs, we have not gone ahead and entered the Indian market.''
Harley continues to meet with Indian government officials to get some relief on the tariffs.
''That's the big remaining issue,'' Klein said.
Harley is seeking a tariff rate of about 10 percent, similar to the tariff on industrial products, Klein said. The Indian government has moved slowly on trade issues, so it's unknown when or if Harley and other motorcycle manufacturers might get a break on the tariffs.
''We are still laying groundwork for possible entry into the market, should those barriers be addressed,'' Klein said. ''It's something that we continue to have regular contact with the Indian government on.''
The heavyweight motorcycle culture is barely established in countries like India and China, and Harley has just begun to tap the sales potential, said analyst Craig Kennison with Robert W. Baird & Co.
''But the markets are huge. If Harley makes an investment in them now, then in 10 or 20 years it should pay off in spades,'' he said.
Harley, like many other consumer-product companies, has been hit by the U.S. economic slowdown. But motorcycle sales were up more than 17 percent in the fourth quarter in international markets.
Harley has done well in Europe and Latin America, where its brand is well-established.
