Companies

Harley-Davidson cuts short India trip

Our Bureau Mumbai | Updated on September 24, 2020 Published on September 24, 2020

End of the road   -  The Hindu

Lower sales, profitability cited as reasons for decision

Iconic American motorcycle maker Harley-Davidson is cutting short its trip in India, citing lower sales and profitability to exit the country a decade after entry.

Harley-Davidson said in a statement on Thursday it is closing the manufacturing facility in Bawal and significantly reducing the size of its sales office in Gurgaon.

Overhaul strategy

“Harley-Davidson, as part of The Rewire, an overhaul of its operating model and market structure, is changing its business model in India and evaluating options to continue to serve its customers. Harley-Davidson plans to close its manufacturing facility in Bawal and significantly reduce the size of its sales office in Gurgaon,” the statement said.

The company is communicating with its customers in India and will keep them updated on future support and the Harley-Davidson dealer network will continue to serve customers through the contract term, it added.

Harley-Davidson India reportedly sold fewer than 2,500 units in the last financial year.

On July 28, the company had said in a statement that it plans to concentrate on approximately 50 markets primarily in North America, Europe and parts of Asia Pacific that represent the vast majority of the company's volume and growth potential.

“The company is evaluating plans to exit international markets where volumes and profitability do not support continued investment in line with the future strategy,” it had said.

According to a Reuters report, the company said it expects to report $75 million in additional restructuring costs for 2020 related to actions including discontinuing its sales and manufacturing operations in India. The same report said that the company now expects total restructuring costs of about $169 million in 2020, and this will also include a workforce reduction of about 70 employees in India, a market where its annual sales volumes account for less than five per cent of the company's total.

US President Donald Trump has repeatedly lobbied for lower tariffs on motorcycles in the past, citing the import duty on Harley-Davidson motorbikes.

 

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Published on September 24, 2020
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