Harley-Davidson will shut down manufacturing and sales operations in India as part of its restructuring exercise under the 'Rewire’ programme, the US-based motorcycle maker said in a filing with the Securities and Exchange Commission on September 24.
In August, the Milwaukee-based cruiser bike maker had indicated exiting some of the loss-making international markets to reroute focus on the US market.
Poor sales record and a dented demand outlook impacted by the COVID-19 pandemic forced the bike maker to exit the Indian market.
Harley-Davidson India sold less than 2,500 units in the last financial year, making it one of its worst-performing international markets.
About 70 of Harley-Davidson’s employees will be laid off as a result. The company has an assembly unit in Bawal, Haryana.
In FY19, the sales of Harley bikes in India fell 22 percent to 2,676 units as against 3,413 units sold in FY18. About 65 percent of Harley’s India volumes come from smaller capacity bikes of 750cc that it assembles at Haryana.
Harley-Davidson will join the growing list of automotive brands, such as General Motors, Fiat, Ssangyong, Scania, MAN, UM Motorcycles, which have exited India over the last 3-4 years.
A couple of years ago Harley tied up with a Chinese company Qianjiang to build a new motorcycle having a sub 350cc engine. The launch was supposed to take place this year, but there has been no news of the project in recent months.
The baby Harley was to address the lower mid-capacity buyers presently catered to by Royal Enfield.
In India, Harley-Davidson faces competition from the Eicher Motors-controlled Royal Enfield in the cruiser motorcycling category. While Harley-Davidson’s range starts around Rs 6 lakh, Royal Enfield has motorcycles starting at Rs 1 lakh.
In February this year, Harley completed 25,000 sales in India - it took Harley 10 years to achieve that feat. The US clocks more sales than that in a quarter. Nearly 75 percent of Harley’s worldwide sales come from the US and Europe, with the US commanding 56 percent of the share.
Through the ‘Rewire’ programme that was kick-started a couple of months ago, Harley intends to have a more streamlined product portfolio and a leaner cost structure.
About 8 years ago, Harley-Davidson India outlined medium-term plans for the country which included clocking sales of 10,000 units a month by 2016. This came after the company witnessed encouraging demand through the setting up of an assembly plant in Haryana.
Harley competes against Triumph, Indian, Benelli, Kawasaki, Ducati, Aprilia and premium range of Yamaha, Kawasaki, Suzuki and Honda. Most of these brands do not share sales data with the Society of Indian Automobile Manufacturer.
While Harley could not join hands with any of the Indian companies for a collaboration, the UK's Triumph Motorcycles announced a partnership with Pune’s Bajaj Auto for developing a range of bikes having engines in the range of 200-750cc. The first of these bikes hits the market in 2022.
German giant BMW tied up with TVS Motor Company and even has a couple of motorcycles in the market which are manufactured in Chennai.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
