Premium motorcycle manufacturers have had a rough ride thanks to erratic policy changes over the last year. There was initially a 10-15 percent hike in duties levied on motorcycles brought in as Completely Knocked Down (CKD) kits, while there were none made for Completely Built Units (CBU) imports. Then, just days later, the government said that there will be a surprise 25 percent slash in the rates for CBU imports.
This served as a double blow to companies that have invested heavily into CKD assembly in India. Triumph was hit the most. The company used to import almost its entire line-up earlier but shifted 90 percent of its India line-up to the CKD route. The side effect of this move is that all of Triumph’s models see a price hike.
Triumph India MD, Vimal Sumbly said, "With the implementation of GST came a 3 percent kick-up in terms of the taxes. So, we didn’t expect this new move, because you know, when you do CKD, you invest in India in terms of infrastructure and manpower. It came as a little bit of a deterrent. If you look in India today, most of the luxury manufacturers – whether bikes or cars – have a plant in Thailand and today FTA is cheaper than doing CKD. The Government needs to do some serious thinking. Five percent is a big amount of money in the automobile industry – to lose or to gain."
Triumph is still committed to local assembly but the brand is waiting on the Government to take corrective measures. The brand itself has already approached the Government, but they haven’t gotten a response yet.