American motorcycle manufacturer Harley-Davidson Inc is planning to wind up its assembly operations in India owing to poor sales and no visibility for future demand.
The firm has reportedly approached a few automakers soliciting a possible outsourcing deal using its leased assembly facility at Bawal in Haryana, The Hindu has reported.
The decision is in accordance with the iconic motorcycle maker's "rewire" strategy, which seeks to focus around 50 markets where the company is doing well, the report said.
Harley-Davidson India sold less than 2,500 units in the last financial year, making it one of its worst-performing international markets, it said.
"The company is evaluating plans to exit international markets, where volumes and profitability do not support continued investment in line with the future strategy," the high-end bike maker said in July.
The company declined to comment on its immediate plans for India, the newspaper said.
Track this LIVE blog for all the latest updates on the coronavirus pandemic
The motorcycle maker will likely run a skeletal operation to provide after-sales service for bikes already on the road in India, a person privy to the preliminary talks told the newspapers.
In FY19, the sales of Harley bikes in India skid 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.
The US company, in March 2020, named a board member, hailed for turning around the Puma brand’s near-bankrupt business, as its interim chief. Jochen Zeitz was asked to take over after Chief Executive Officer Matthew Levatich stepped down following the Milwaukee, Wisconsin-based company’s worst sales performance in 16 years in the US.
In addition to international markets, Harley Davidson has failed to increase sales in the United States too. The US accounts for more than half of its motorcycles sold.
Falling sales in the past 12 quarters have forced the company to limit the production of its bikes to prevent price discount pressure and protect profit.
In 2019, the company's bike shipment volume in the United States was the lowest in at least two decades. Global shipments were the lowest since 2010.
Click here for Moneycontrol's full coverage of the COVID-19 outbreak
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!
