US President Donald Trump’s tariff bombshell has prompted Mahindra & Mahindra-promoted Classic Legends, which makes Jawa and Yezdi bikes, to shelve plans to launch its motorcycles in the US. The launch was scheduled for August 17.
“The US was supposed to be our one big market,” Anupam Thareja, co-founder, Classic Legends, told FE on the sidelines of launching the 335cc Yezdi Roadster at an event in Mumbai, at Rs 2.1 lakh (ex-showroom). “Nobody knows what the duty on my products would be (in the US). We had no option but to cancel the launch. The bikes are in the customs and on high seas at the moment,” Thareja added.
The Unviability of the US Market
After slapping a 25% duty on auto products on May 3, Trump had put an additional levy of 25% to penalise India for buying oil from Russia. This has made it economically unviable for companies like Classic Legends to sell in the US.“With the new duty, it would be unviable (to sell in the US). And remember, I am going to compete with people who have huge inventory, available at lower price,” he said.
While Thareja believes that entering the US will need a rethink of strategy, his company is accelerating plans to push volumes in other global markets. Two weeks ago, Classic Legends launched bikes under its third brand BSA in the UK. It also signed agreements for sale in Germany, Italy, France, Austria, Spain, New Zealand and Japan.“In Europe, we are sold out for the rest of the season,” Thareja added. In July, the company unveiled the Bantam 350 and the Scrambler 650 from the BSA stable in the UK which it plans to commercially launch starting in a few weeks. The company is in the process of setting up its own vehicle assembly plant in the UK.
While BSA will open in the UK, it will be Jawa for Classic Legends in South America. The markets of Argentina, Brazil, Mexico and Chile were once very strong global markets for Jawa. An assembly plant there will start making Jawa bikes by the end of this month.
Growth Targets and Future Plans
Exports will become a major focus area for Jawa, BSA and Yezdi in the mid-to-long term for Classic Legends. By the end of FY26, the company hopes to double its volumes compared to FY25 when it sold nearly 32,500 units, including doubling of its export volume. Last year, 15% of its volume came from markets outside of India.“I am sitting on Rs 875 crore cash. We will need money if we are going global fast and also for more products. We don’t need money immediately but (we will need it) when we are in the second leg of growth. We can have an IPO in the next 12-18 months,” Thareja said.
He also said that at unit level economics, the company is in the financially positive territory. “At the net level, this year we will make a profit,” he added.