Harley-Davidson 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 that involves scaling back and streamlining operations.
The decision should come as no surprise to many. Since its entry in the market in 2011, Harley-Davidson has only sold 25,000 units. It has been averaging under 3,000 units a year, compared to annual total new motorcycle sales of 11 million.
India is the world’s largest motorcycle market. Unfortunately, H-D bikes come at a severe disadvantage against its locally-based competitors with taxes and large displacement engines. The Indian market seems to favor smaller displacement bikes, in the 125-200cc region, far below Harley’s smallest displacement offering, the Street 750.
In addition, the current pandemic and more stringent BS6 (Euro5) emissions regulations have made it even more difficult for customers to consider buying a large cruiser motorcycle at the time.
Harley set up an assembly plant in Bawal, Haryana in 2011. The facility primarily builds 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. The means job losses of approximately 70 employees in India.
There is still hope for it to return as Harley announced it is looking for a partner in India. However, with joint-ventures in mind, the products of this partnership will likely be smaller co-branded motorcycles far from the large American cruisers it is known for.
