Harley-Davidson shutting down operations in India

Published September 25, 2020, 5:26 PM

by Inigo Roces

Harley-Davidson (H-D), America’s most popular motorcycle brand, is shutting down its sales and manufacturing operations in India, as part of its strategy to reduce costs and refocus its efforts on more profitable markets. The move is part of the Milwaukee-based company’s Rewire strategy announced earlier this year. The restructuring program involves scaling back and streamlining operations.

Since its entry in the market in 2011, H-D has only sold 25,000 units over nine years. It has been averaging under 3,000 units a year, compared to annual total new motorcycle sales of 17 million.

India is the world’s largest motorcycle market. Unfortunately, H-D motorcycles are disadvantaged against its locally-based competitors with high taxes and large displacement engines. As such, Harley set up a manufacturing plant to build the Street 750 locally.

Nonetheless, much of the Indian buying public prefer smaller displacement bikes, in the 125-200cc region, far below Harley’s smallest displacement offering, the Street 500.

In addition, the current pandemic and more stringent BS6 (Euro5) emissions regulations have further discouraged customers from considering buying a large American cruiser motorcycle.

Harley-Davidson Street 750

Harley set up an assembly plant in Bawal, Haryana in 2011. The facility primarily builds the Street 750, the brand’s best selling model in the country by far. It has also been operating 33 delerships in the country. Both of these will be shut down, with only a scaled-down sales office in Gurgaon, south of New Delhi. Harley may continue to offer maintenance and repair services to existing customers.

As part of Harley Davidson’s Rewire medium-term restructuring strategy, the India operations will be scaled down. This means job losses of approximately 70 employees in India.