Iconic US motorcycle brand Harley Davidson heading out of India only shows that the world’s biggest two-wheeler market does not offer an easy ride. With sales of over 17 million two-wheelers last fiscal, certainly India is where two-wheelers sell the most. Only, not the large machines that Harley makes, and no where near the American brand’s price range. India is a peculiar market that offers volumes, but not big margins.

Essentially, the market is mainly for small two-wheelers for runs within a city not between two cities. They are usually under 150cc, modestly priced, fuel-efficient, and can be maintained with minimum fuss — not one aspect Harley is exactly known for.

In this market, sales of two-wheelers larger than 500cc — Harley’s main operating zone — are, by all expert accounts, 25,000 units per annum, tops. Indeed, in the 10 years Harley has been in India, it has sold a little over 27,000 units. In contrast, Royal Enfield sells double that every month.

Either Harley did not read the Indian market right, which is what its failure to bring out smaller and more affordable bikes suggests, or thought the cruisers and tourers it specialises in would pick up with a growing aspirational, well-paid younger set emerging.

But the psyche of the Indian buyer — even of the set Harley was targeting — is possibly different. Rather than pay a few lakhs for a motorcycle, however niche, a car would be preferable. Besides being a sign of ‘arrival’, the preference for a car is also because of the need for a people-mover. Unlike in the West, especially the US, in India a vehicle is bought for the family, not the individual. And, long cross-country rides are still the exception rather than the norm.

And, even with the Harleys sold, there were suspension and chassis issues. Most reported problems were of faulty brakes and burnt clutch plates. Repairing/replacing them was not a low-cost fix. Social media sites are rife with agony posts of bad experiences. There were recalls, too, and these did nothing to improve the image.

Harley may also have missed a bet by not teaming up with a local player, as KTM and Triumph did with Bajaj Auto, or as BMW did with TVS. The buzz of a tie-up with Hero MotoCorp remained just that. This is surprising because in China, Harley partnered a Geely Motors subsidiary, Qianjiang, to make smaller bikes. It has had a good run elsewhere in Asian, too, like Thailand and Korea, thanks to the market and a favourable cost structure. Perhaps, these could have been addressed with an Indian partner, and by bringing smaller and affordable bikes.

This year, Covid spoiled the ride for everyone, and Harley was no exception. It posted its first quarterly loss in more than a decade in April-June. It has slashed hundreds of jobs under its new chief executive Jochen Zeitz and wants to focus on core markets and models.

Harley is braking the India ride as part of its ‘Rewire’ strategy. It could have easily clutched at the market, rewiring its India strategy and bringing in bikes at 350cc levels — anything lower would be blasphemy for the big bike maker — and at more reasonable price-points. In time, it may well have cruised to better days.

Harley's exit will not matter for India economically. But it is bad optics especially coming on the heels of Toyota saying it wouldn’t expand further due to the high tax regime. The import tariff has been halved, yet it remains a niggling issue.

The Harley exit is also inopportune, coming as it does just when Prime Minister Narendra Modi wants to woo foreign manufacturers, especially those looking at alternatives to China.

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