Harley-Davidson Decides To Exit from Indian Manufacturing Sector

Harley-Davidson has decided to call it a day and close shop in India – both sales and manufacturing – in the world’s biggest motorcycle market. This is part of a restructuring exercise, the company said in a regulatory filing in the US on Thursday.

This essentially means walking away from a market that sells about 17 million bikes and scooters a year and closure of its Bawal plant, not to forget $75 million in restructuring costs. Around 70 employees will be laid off as well.

It took the iconic manufacturer a decade to realise that its exorbitantly priced brand had failed to carve out a niche for itself, which is a setback of sorts for the Modi government and its gambit to encourage domestic manufacturing.

A lot of this may have to do with the dynamics of a domestic market where discerning buyers want value for money.

The market has not been too indulgent with other global players either: Last year, Ford Motor Co ceased independent operations in India by entering into a joint venture with Mahindra & Mahindra. General Motors, which clamped down on domestic sales in 2017, also plans to stop manufacturing and exports from India by the end of this year.

Harley-Davidson's decision comes just two months after the company unveiled its strategy to shift focus to more profitable and high volume motorcycles and core markets such as the US. Sales of the company's motorcycles in India were on a downturn for nearly two years as the domestic automobile industry continued to struggle with volumes. The outbreak of the novel coronavirus further hit the domestic operations of the company. Harley-Davidson India sold less than 2,500 units in 2019-20 (Apr-Mar), less than 5% of the company's total volumes, making India one of its worst-performing international markets.

The motorcycle became a household name with minimal advertising after a picture of Chief Justice of India Sharad Bobde sitting on its limited edition CVO 2020 went viral on social media.