Harley-Davidson Quits The World's Largest Motorcycle Market.

Harley-Davidson leaves India after struggling to open up the world's largest motorcycle market.

Harley-Davidson is discontinuing its operations in India, the world's largest motorcycle market.
It has struggled for market share since entering the country in 2011, consistently selling fewer than 3,000 of its iconic bikes.
Auto experts have said that high taxes, a drop in discretionary spending and low-cost competitors have hurt the company.
Harley-Davidson has joined with General Motors, Ford and other vehicle manufacturers to withdraw from the Indian market.
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Harley-Davidson is closing its operations in India, the world's largest motorcycle market.

The company, founded in 1903, has struggled to break through the high-volume, low-margin Indian market. Since opening in 2011, it has consistently sold fewer than 3,000 of its iconic bikes per year.


It is shutting down its manufacturing in the country and significantly reducing its sales operation, it said Thursday.

Automotive industry experts said Harley-Davidson has struggled with high taxes and low-cost competitors such as Hero and Japan's Honda, according to the BBC. Rival company Royal Enfield sells its motorcycles for around $ 2,714 compared to Harley-Davidson's $ 6,105 "pigs."

The exit entails Harley-Davidson paying $ 75 million in restructuring costs, laying off nearly 70 employees and closing its manufacturing plant in Bawal, North India.

"The company is changing its business model in India and evaluating options to continue serving its customers," the company said in a statement Thursday, adding that it was "communicating with its customers in India and will keep them updated on future support." . "



The American brand has had a difficult year, reporting a loss of $ 96 million between April and June, its first quarterly loss in more than a decade.

Harley-Davidson did not immediately respond to a request for comment.

It joined other vehicle manufacturers that have withdrawn from the Indian market. Toyota said on Sept. 15 that it was halting a planned expansion due to the country's high tax regime, while General Motors left in 2017, after failing to expand its market share. Ford also said in October that the automaker was transferring most of its assets to a joint venture with Indian vehicle firm Mahindra & Mahindra.







Around 17 million motorcycles and scooters are sold in India each year, making it the largest market in the world.

Harley, however, is in talks with Hero about a distribution agreement that will allow the Indian company to import and sell Harley motorcycles as its sole distributor, two sources familiar with the talks said.

"Hero will be the main Harley motorcycle dealer in India ... It will be a partnership, a strategic alliance," said one of the sources, who declined to be named because the discussions were private.

Talks are also underway to allow Hero to become a contract manufacturer of at least one Harley motorcycle with a 300-600cc displacement engine, which it will launch later, the first source added.

The financial details of the deal were not immediately clear.

When asked about the conversations with Hero, a Harley spokeswoman said the company would not comment on speculation. On Thursday, it said it was changing its business model in India by evaluating options to continue serving clients.

Hero MotoCorp, India's largest two-wheeler maker by sales, also declined to comment on market speculation. It produced 6.4 million scooters and two-wheelers in the fiscal year ending March 2020, a third of India's total production.

Harley made 4,500 motorcycles during that period, largely assembled from imported detachable kits at its plant near New Delhi, which it will close as part of its restructuring.

Harley's decision to stop direct manufacturing marks another major departure from an automotive player in India and is a setback for Prime Minister Narendra Modi, who has invited foreign companies to increase local production. Ford Motor and General Motors have reduced their operations in India in recent years.

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Harley, known for its heavy touring motorcycles, ran into trouble in India mainly due to high import tariffs, for which the President of the United States, Donald Trump, often criticized India, and also because it We locally assembled bikes face high taxes.

Hero typically sells motorcycles with an engine capacity of less than 200cc and a deal with Harley will propel its entry into the mid and high engine market favored by bike enthusiasts and younger fashion conscious riders, said the second. . source.

All 33 Harley dealers will likely be under Hero management under the new deal, one of the sources said.

In a statement on Friday, the Federation of Automobile Dealers Associations (FADA) in India criticized Harley for not informing dealers about its plans in India.

"It goes without saying that dealers who have invested their capital earned in this iconic brand is left like an abandoned baby without any compensation package, "said FADA.