British Superbike brand Triumph Motorcycles is considering to sell in India more bikes imported from Thailand in the short term via FTA route as locally assembled bikes are proving to be costlier due to customs duty ‘anomaly’, a senior company official said.
According to the company, after customs duty on CKD (completely knocked down) imports of motorcycles was hiked to 15 per cent from 10 per cent in the Budget for 2017-18, assembling in India has become costlier as compared to importing directly from Thailand.
India has a Free Trade Agreement (FTA) with the 10 member ASEAN of which Thailand is a part of.
“While on one side there is Make in India campaign and promoting production in India but on the other side FTA today is attracting zero per cent taxes, whereas if you are assembling CKD in India the cost of assembling is 15-16 per cent higher,” Triumph Motorcycles (India) General Manager Shoeb Farooq told PTI.
“These are small things which I am sure policymakers are mindful of. Directionally, if you have to promote production in India, the assembly is the first step and then go for manufacturing,” he further said.
When asked how it would impact the company’s strategy in India, he said, “There are a big 15-16 per cent difference. We would have to try and align it in the second half of the financial year and see how to make a good mix of FTA and CKD going forward.”
Triumph follows July-June fiscal, and last year 90 per cent of its overall sales volume in India was through CKD assembly at its Manesar plant.
Commenting on how the sales break-up could be altered, he said, “It will be tilted towards FTA to be fair because it is making lot of commercial sense.”
He further said, “For the short term till this whole policy framework is not aligned, I think we will have to make some stop-gap arrangements through FTA.”
Nevertheless, Farooq said, “We will continue to make a good percentage of our products CKD but at the same time we also have to see at what point all these mathematics are making sense to us.”
Asked if the tilt towards more imported products from Thailand would lead to the job redundancy at the company’s Manesar plant, he replied negatively. A lot of states in India have road tax policies, which are pro-India made products.
Stating that the company had consciously aligned to ‘Make in India’ as it was making a lot of sense commercially, he said, “As a brand we want to have an assembly footprint in India.”
“For a longer term we want to have capabilities where we assemble in India and have that kind of flexibility. We have the capability. We want to continue to invest in the Mansear plant and utilise the facility, because sooner than later this anomaly is going to get corrected. ” The company sells 13 superbike models, including variants priced between Rs 7.7-22 lakh in India.