Posted on Monday, February 01, 2010 - 12:58 pm:

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I agree that Buell owners, particularly at this time, make a poor Harley-Davidson focus group.

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Posted on Monday, February 01, 2010 - 01:11 pm:

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2/1/10, (NYSE:HOG), $23.01, "SELL-SHORT" HARLEY DAVIDSON (HOG) Stock
HOG opened at $22.95 and it is $+0.27, (+1.19%). Today's trading range is $22.71 - 23.31. 1y target price is $27.68.

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Posted on Monday, February 01, 2010 - 01:40 pm:

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India, US trade mangoes for motorcycles

By Indrajit Basu

KOLKATA - Mangoes and a macho motorcycle brand are the latest diplomatic tools for improving India-United States trade relations. That's the trade deal Indian Commerce Minister Kamal Nath and US Trade Representative Susan Schwab thrashed out late last Friday in a bilateral trade forum in New Delhi. Experts say the move has taken India's reform process a step ahead and removed yet another thorn in trade relations with the US.

After a year of bickering, India finally agreed to import iconic Harley Davidson motorbikes with an engine capacity of 800cc and above, which adhere to Euro-III emission norms. To reciprocate this relaxation, the US agreed to allow the import of Indian mangoes, subject to Indian farmers using irradiation to kill pests instead of using pesticides, which make imported food products unfit for consumption in the eyes of US agriculture officials.

"Mango exports to the US assumes a big symbolic significance, as access to the global marketplace will benefit Indian farmers and consumers, together with their American counterparts," said the Washington DC-based US-India Business Council (USIBC), while in a comment to the press its president, Ron Somers, said: "Trade must be a two-way street." He added that as the Indian economy will benefit by the expanding trade opportunities in US agricultural products, "US industry appreciates that the economic reform process will be accessed and shared by all" and that this also brings down trade "barriers" and improves relations between the countries.

Indeed, the mangoes-for-Harley Davidson deal is a curious case of how trade problems can be created and solved over two consumer favorites. While Indian mangoes are widely regarded as the most luscious and have been exported to Europe and the Middle East for years, the US did not allow the fruit to be imported from India, citing lack of compliance with Food and Drug Administration requirements. That not only hurt India's pride but also deprived over 2 million Indians living in the US of their favorite fruit.

Therefore, as if to hit back, when the Milwaukee-based bike brand - that enjoys cult status yet is struggling to revert to its former financial glory - sought entry into Indian markets around July last year with a request for a lower import duty and easier emission norms, Indian authorities struck back by sticking to their policies.

Meanwhile, even as the visit of US President George W Bush to India in March last year cleared the import of mangoes in exchange for India allowing US farmers to access local markets with their pulses (beans and peas) and almonds, Indian mangoes failed to reach US shores, reportedly owing to India's tough stand on Harley imports.

However, according to its claims, USIBC efforts succeeded in breaking the ice, with India agreeing to relax its norms by way of just an approval certificate (that the bikes adhere to Euro-III emission norms) from an international accredited agency, instead of an elaborate registration process. The US agreed to allow mangoes onto its shores provided India allows pre-shipment inspections by US officials (paid for by Indian exporters) to ensure the absence of pesticides.

"After a gap of 18 years, mangoes can finally be imported to the US, and we [will] get to feast on this delicious fruit that many of us grew up with in India," said Kamala Bhat, a writer of Indian origin who has lived for many years in the US, in her blog. "The mangoes that you find in the US are pale in comparison to the flavorful ones from India. Every time I have caved in and bought a mango in the US it has been a deeply unsatisfying experience."

According to the USIBC, the import of mangoes has a huge commercial significance as well since Indian varieties are likely to dominate the 250,000 ton a year US market. "Since the news about the possibility of the import of Indian mangoes to the US appeared, we have been getting frequent queries from specialty grocery stores as well as transporters," said a spokesperson from the USIBC to the Press Trust of India news agency.

Although mangoes have never been hot favorites in the US, in recent years the fruit has gained in popularity following import from mainly Mexico. But US consumers say Mexican mangoes hardly taste as good as their Indian counterparts. Therefore, to push the country's "wonder varieties", the USIBC has even planned the first-ever "Indian Mango Tasting Festival" at its Global India Summit in Washington from June 27.

The mangoes-for-Harley deal paves the way for the entry of not only Harley Davidson but also many other high-end famous bikes from companies including Yamaha, Suzuki, Honda, Ducati and Triumph. But unlike the prospects of mangoes in the US, the motorcycles are not expected to be a big hit with Indian consumers. That's because while India has agreed to relax its emission norms, it has so far refused to lower the import duty (of 60% on landed price-manufacturer's price plus shipping costs) on high-end bikes, which will mean that a Harley cannot be bought for less than $17,000.

"That's higher than the price of a medium-sized car [like the globally known Honda City] and at that price a Harley [and others high-end ones lined up for India] will compete with cars and not motorbikes," said a spokesman for one of the largest bike makers in India, requesting anonymity.

"India may have a market for luxury cars [like Rolls-Royce, Mercedes Benz and BMW] but that, too, is tiny. I am not sure if the country is a hot market yet for motorbikes, the price of which can fetch a car that features higher in the aspiration-index." This bike maker tried selling a famous German bike for about $11,000 each a few years back, but had to withdraw it from the market after selling only about 250.

Nevertheless, it appears that Indian mangoes may have opened up US grocery store shelves for many other farm products from India. According to Schwab, who visited other organic farming units in the country, the US is trying to learn more about India's farming processes and "is looking for opportunities in food and agricultural products".

Indrajit Basu is a Kolkata-based journalist.

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