Harley-Davidson to exit world's biggest bike market

Harley-Davidson to exit world's biggest bike market

"The lifestyle element that goes with owning a Harley bike is also not fully developed in India yet". Over the past few months, Harley-Davidson has been announcing multiple cost-saving measures as part of its new Rewire business strategy.

Harley Davidson has chose to shut down its manufacturing and sales operations in India as part of its "The Rewire" programme.

US motorcycle maker Harley-Davidson said on Thursday it expects to report $75 million in additional restructuring costs for 2020 related to actions including discontinuing its sales and manufacturing operations in India. Even President Trump has often raked up the issue of "high" import duty that Harley bikes faced in India (he called it "unfair"), even taking it up with Prime Minister Narendra Modi.

Is Harley-Davidson shutting down in India?

UK-based Triumph Motorcycles, Harley's rival in the 500-cc and above segment, has a non-equity partnership with Bajaj Auto, under which it produces its products at Bajaj's Chakan factory.

Since last month, it is being speculated that American brand will downsize its operations in India but in a shocking turn of events, H-D has chose to exit the Indian market altogether. This made the Indian motorcycle market one of the worst performing worldwide markets for Harley-Davidson with the overall downturn in its global sales and the Cover-19 pandemic.

In the SEC filing, the company said as a result of the actions approved from August 6, 2020, through September 23, 2020, it expects to incur restructuring expenses of around USD 75 million in 2020, of which around 80 per cent are expected to be cash expenditures, including one-time termination benefits of close to USD 3 million, non-current asset adjustments of approximately USD 5 million, and contract termination and other costs close to USD 67 million.

Harley-Davidson is looking to sell India operations or have a non-equity partnership. Then the company set up its completely knocked down assembly plant in Haryana and started rolling out assembled bikes from the unit in the early part of 2011. Harley's problems, however, were more than just adverse duty structure. Trump's complaints had led the Centre to reduce the duty on Harley motorcycles from 100% to 50%, though the United States government still remained unsatisfied. It looks like India will no longer get a taste of these offerings when, or if, they push through. To enhance profits and make the brand more accessible in markets like India, the company introduced entry-level models like the Street 750, which offered the Harley experience at a lower price.

Growth in domestic sales has slowed of late - with sales of cars and motorbikes falling 18% in the last fiscal year to March 31 from a year ago.

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