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Last Updated : Jul 20, 2019 01:06 PM IST | Source: Moneycontrol.com

This week in Auto: Donald Trump's Harley pitch; MG Motors goes out of stock for Hector

Here is the complete round up of all the main headlines of the auto sector

Swaraj Baggonkar @swarajsb
 
 
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Recently, US President Donald Trump hit out at India again on the “very high tariff” charged on US products sold in India. Trump did not name any brand, but it was assumed to be the struggling cruise bike maker Harley Davidson, known to be an American icon. In today’s news wrap, we take a look if Trump’s claims are indeed impacting Harley’s volumes in India. But, first, here is the complete round up of all the main headlines of the auto sector.

Hyundai Kona, Kia Seltos bookings hit the roof

In just 10 days, Hyundai’s first fully-electric car Kona has garnered confirmed bookings of 120 units in India. Priced at more than Rs 25lakh, the Kona comes with a battery pack that can power it for 450 kms on a full charge.

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For its first India product Seltos, Hyundai’s sister concern Kia announced record bookings of more than 6,000 units on the first day. Kia is accepting bookings for the SUV for Rs 25,000. The mid-size SUV which will compete against the Tata Harrier was unveiled on August 22.

FASTags to become mandatory soon

Electronic toll collection tags known as FASTags will be made mandatory on every toll paying vehicle in four months in an effort to unclog toll plazas, a senior minister has said.

During the same period, all toll collection centres – which number more than 500 in the country – will be converted to accept FASTags, Road Transport and Highways Minister Nitin Gadkari said in the Lok Sabha on June 16.

MG Hector sold out for 2019

MG Motor India on July 18 said it had temporarily stopped bookings for its newly-launched SUV Hector, following orders of over 21,000 units, thus selling out for the ongoing calendar year.

The company will increase production of the new SUV to 3,000 units from October as a part of the plans to cater to the increasing demand gradually over the next few months, MG Motor India said in a statement.

Chinese bike maker CFmoto enters India

Chinese two-wheeler manufacturer CFmoto has launched four bikes in India in the performance category, comprising engines that are 300cc and 650cc. The all-India ex-showroom prices for the four CFmoto motorcycles that will be available are Rs 229,000 (300NK), Rs 399,000 (650NK), Rs 499,000 (650MT) and Rs 549,000 (650GT).

The motorcycles will be brought in via the knocked-down route and will be assembled locally at AMW’s assembly plant located in Bengaluru. With this, AMW – which had to shut down its loss-making truck business – makes a comeback to the automotive industry.

Electric three-wheelers outsell conventional ones

The government’s push for electric vehicles has hit the right chords with three-wheeler owners and fleet operators. In a first for any segment in the auto sector, the country now sells more electric three-wheelers than the conventional ones that run on petrol, diesel or CNG.

Manufacturers such as Mahindra & Mahindra and Lohia Auto have been flooded with enquiries and bookings for lithium-ion electric passenger three-wheelers also known as auto rickshaws

Harley-Davidson’s problems are not India’s tariffs

Contrary to the information apparently spread by Trump about India imposing “high tariffs” on US-made products, the reason behind the declining demand for the iconic bike brand Harley-Davidson is something else.

In FY19, the sales of Harley bikes in India skid 22 percent to 2,676 units as against 3,413 units sold in FY18. About 65 percent of Harley’s India volumes come from smaller capacity bikes of 750cc that it assembles at Haryana.

Such bikes carry a customs duty rate of 15 and 25 percent, depending on the kind of unit being imported. These rates are much lower in comparison to the rates levied on fully-imported bikes, which are 50 percent down from 60 percent and 75 percent earlier.

Moreover, 13 of the 17 models that Harley sells in India are built within the country, attracting the lower customs duty slab rather than the highest duty. Harley’s prices start at 5.33 lakh (ex-showroom) and ends at Rs 50.53 lakh.

In comparison, Eicher Motors-controlled Royal Enfield - with its smaller engine capacity bikes ranging from 350-650cc – are priced less than half than the Harley’s least-priced bike. Presently, Harley does not have an answer to Enfield’s range. An all-new small Harley is expected to debut, but only by the end of 2020 and that, too, in China. There is no word on its India launch.

India’s two-wheeler market is growing but at slower pace. From frugal and light-on-pocket 100cc motorcycles, buyers are slowly progressing to bigger bikes with engines above 135cc. There is a natural need for more power from the engine, given the traffic congestion and improving road network.

A classic case is that of the scooter market where sales of 100cc models have slumped while that of 125cc has gone through the roof. Incumbents like Honda are now talking about introducing 150cc scooters.

The current motorcycle market is witnessing a move to 200-350cc bikes. Many of the buyers are erstwhile owners of 150cc bikes while others are first-time buyers.

With the first baby Harley coming only in late 2020, the market will begin the transition to some other higher segment. A point to note is that Harley does not have a product in the below 750cc category, which is called the middle-weight category. Enfield, on the other hand, is aiming to dominate this white space globally.

Trump’s apparent conclusion of higher tariffs on Harleys impacting its business is incorrect. There is a whole different set of issues that the full-blooded American muscle bike maker has to worry about. Even a full elimination of tariff on semi-imported bikes will not help Harley much.


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First Published on Jul 20, 2019 01:06 pm
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