Honda Motorcycle and Scooter India are considering the possibility to get the high capacity motorcycles in India through complete knocked down (CKD) route. The company currently sells the CB1000R, CBR1000RR, VFR1200F and the VT 1300CX via completely built unit (CBU) that now attract even higher import duties after the 2013-14 Union budget.
"In future there will be demand for big motorcycles. We are checking on it as they attract very high import duty on CBUs. Local assembly is one of the possibilities that we will look at in the next few years to reduce costs. Customer demand is just not increasing. The challenge will be on how to guarantee the same quality if we assemble and produce them locally as the 1000cc bike clocks speeds close to 300kph and has to go through several checkpoints. At present, the quality guarantee comes from our Japanese factory in Italy. These will not be easy to manage in our Indian factory. Here we can consistently try to maintain low cost in terms of assembly but quality-wise it is not so easy," said Keita Muramatsu, president and CEO, HMSI.
Indian Government recently increased the custom duty of imported motorcycles above 800cc by 15 per cent from 60 per cent to 75 percent. This made the already expensive imported motorcycle cost more. By setting up an assembly plant, Honda can drastically save on custom duties and can sell their motorcycle at a much lower price and also increase their sales.