In recent years, cars are not the only thing that has risen in price disproportionately. The general escalation of prices has affected also to the world of motorcycles and, to try to contain even greater increases, in recent years the most common practice by large manufacturers has been to move part of their production to India to save costs. The EU has not been amused in the slightest.
New tariffs. The month of January starts with new tariffs on motorcycles and scooters made in India. And not a single model manufactured outside European territory is spared.
- 8% tariff for models up to 250cc
- Tariff of 6% for larger cylinder capacities
In a market with tight margins, a tariff of this amount will force large European manufacturers to completely rethink their strategy.
Who is affected?. KTM, Triumph, BMW, Suzuki, Aprillia and mainly Royal Enfield will be the main affected after this measure by the European Union.
- KTM manufactures its small displacement motorcycles in India, such as the KTM 390 Duke and Adventure.
- BMW and its best-selling contender, the GS 450is manufactured together with TVS Motor, an Indian conglomerate.
- Aprillia manufactures together with Bajaj its 457.
- Triumph has been allied hand in hand with Bajaj for years to manufacture its stars of displacement 400.
Why is it important. Given the increase in prices in recent years, manufacturers made a very clear bet: to commit to manufacturing medium-low displacement models in India. Seeing premium brands like Triumph or BMW launch 400 models that aspire to be bestsellers is a true reflection of the state of the sector.
The key? Manage to sell competitive models between 5,000 and 6,000 euros, in a segment ideal for everyday use and occasional outings. The 6% tariff will shake this pricing strategy.
Because now. Although the measure seems like an attack from Europe on external manufacturing, the context goes further. The EU has the Generalized System of Preferences (GSP) to regulate the flow of exports from developing countries to Europe. But there is fine print:
- The EU requires certain minimum standards when manufacturing the product.
- It also requires that, if certain export volume thresholds are exceeded, preferential tariffs end.
Although there is no official data on how many motorcycles manufacturers are exporting from India, the threshold has been exceeded, and with it tariffs are once again applied without any type of bonus.
The great beneficiary. China is sweeping Spain with economical models and much more equipped than the rest of its competitors, and China will continue to sweep if tariffs negatively affect the main European manufacturers.
With Zontes making its way as the third manufacturer in our country, the countdown to see a podium headed by motorcycles made in China.
Image | bmw
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