There is bad news for Indian bike enthusiasts. American bike maker Harley-Davidson has decided to shut down its factory and discontinue sales in India. The decision has been taken due to the poor sales and sluggish business of the company in India that further deteriorated due to the coronavirus pandemic.
Harley-Davidson’s factory is located in Haryana’s Bawal. Due to the company’s decision to exit India, 70 people have lost their job.
Although Harley-Davidson is exiting India, the company said it will continue to provide service to its customers. It said it will also ensure the availability of spares.
India exit part of restructuring plan of Harley-Davidson
According to the company, the decision is part of its restructuring actions that it has termed ‘The Rewire’ strategy.
On Thursday, Harley-Davidson informed its employees of additional restructuring costs amounting to $75 million in 2020, which includes discontinuing the iconic American brand’s operations in India.
Total costs associated with ‘The Rewire’ strategy outlined by Jochen Zeitz, president, chairman and CEO of Harley-Davidson amount to $169 million this year. The motorcycle brand expects to complete the restructuring actions by August 2021.
It will include optimising its global dealer network, exiting certain international markets and discontinuing its sales and manufacturing operations in India. In India, Harley-Davidson will reduce the workforce by approximately 70 employees.
Harley-Davidson’s sales in India
Harley-Davidson India sold less than 2,500 units in the last financial year, making it one of its worst-performing international markets.
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.
Many automotive brands exited India
Many foreign automotive brands have failed to achieve success in India and exited the country. Harley-Davidson will join the growing list of automotive brands, such as General Motors, Fiat, Ssangyong, Scania, MAN and UM Motorcycles which have exited India over the last 3-4 years.
Notably, many other automobile companies have put brakes on their expansion plans. In fact, Toyota recently said that India’s high taxation rates make it difficult for automobile manufacturers to do business in the country.
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