Harley Davidson to quit India, take $75 million in restructuring cost
The US-based motorcycle manufacturer said in a filing with the Securities and Exchange Commission on 24 September that Harley-Davidson would cease manufacturing and sales operations in India under the ‘The Rewire’ program.
In August, the Milwaukee-based cruiser bike maker hinted at exiting some of the loss-making international markets to focus on the US market.
Poor sales records and a demand outlook impacted by the COVID-19 epidemic forced the bike manufacturer to exit the Indian market.
Harley-Davidson India sold less than 2,500 units in the last financial year, making it one of the worst-performing international markets.
As a result, Harley-Davidson will have about 70 employees. The company has an assembly unit in Bawal, Haryana.
In FY19, Harley bike sales in India fell 22 per cent to 2,676 units, compared to 3,413 units sold in FY18. Around 65 per cent of Harley’s India comes from a 750cc small capacity bike that assembles in Haryana.
Harley-Davidson will join a growing list of automotive brands, such as General Motors, Fiat, Sengyong, Scania, Man, UM Motorcycles, which have been out of India for the last 3-4 years.
A few years ago Harley teamed up with a Chinese company Qianjiang to build a new motorcycle that had a sub 350cc engine. The launch was scheduled to take place this year, but there is no news of the project in recent months.
Baby Harley was to address low-capacity buyers, which currently catered to by Royal Enfield.
In India, the Harley-Davidson cruiser competes with Royal Enfield controlled by Eicher Motors in the motorcycle category. While the Harley-Davidson range starts at Rs 6 lakh, the Royal Enfield motorcycle starts at Rs 1 lakh.
In February this year, Harley completed 25,000 sales in India – it took Harley 10 years to achieve that feat. America sees more sales in a quarter. About 75 percent of Harley’s worldwide sales come from the US and Europe, with the US holding 56 percent.
Through the Kick-Started a Rewire ‘program a few months ago, Harley intended a more streamlined product portfolio and a leaner cost structure.
About 8 years ago, Harley-Davidson India outlined medium-term plans for the country, including sales of 10,000 units a month by 2016. This was seen by the company after enthusiastic demand through the setting up of an assembly plant in Haryana.
Harley competes with Triumph, Indian, Benelli, Kawasaki, Ducati, Aprilia and premium ranges of Yamaha, Kawasaki, Suzuki and Honda. Most of these brands do not share sales figures with the Society of Indian Automobile Manufacturers.
While Harley could not join hands with any Indian companies for cooperation, Triumph Motorcycle of the UK announced a partnership with Bajaj Auto of Pune to develop engines with bikes in the 200-750cc range. The first of these bikes came on the market in 2022.
German giants BMW tied up with TVS Motor Company and even have some motorcycles in the market which are manufactured in Chennai.
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