Harley-Davidson exits India, shuts production

Harley-Davidson Inc stated on Thursday it might discontinue its gross sales and manufacturing operations in India, successfully abandoning the world’s greatest motorbike market after a decade of unsuccessful efforts to achieve a foothold.

Harley had spent current months shifting dealerships within the nation to cheaper places, and the announcement adopted hypothesis a month in the past that executives had performed down.

The transfer includes $75 million in restructuring prices, some 70 redundancies and the closure of its Bawal plant in Haryana, strolling away from a market value about 17 million bike and scooter gross sales a 12 months. It will retain solely a scaled-down gross sales workplace in Gurugram, close to Delhi.

The departure can also be the newest setback for Prime Minister Narendra Modi’s technique to encourage home manufacturing that may hold extra of the fruits of a huge residence shopper market in India.

Harley has been scrambling for years to develop gross sales past child boomers within the United States and has not posted retail gross sales progress there previously 14 quarters. It recorded its first quarterly loss in additional than a decade for the three months led to June.

Chief govt officer Jochen Zeitz, who took the reins on the firm in February, unveiled a serious “Rewire” in July to spice up income by lowering Harley’s product portfolio by 30% and investing in 50 markets with progress potential in North America, Europe and components of Asia Pacific.

India was one of many markets the corporate at that time dedicated to investing in additional closely. Thursday’s assertion stated the transfer to go away had been pushed by way of since August 6.

Harley stated it now expects whole restructuring prices of about $169 million in 2020, however warned that the restructuring programme — referred to internally as “The Rewire” — was prone to incur extra expenses.

“As part of The Rewire, an overhaul of its operating model and market structure, the company is changing its business model in India and evaluating options to continue to serve its customers,” it stated in an announcement on Thursday.

India, nonetheless far cheaper and poorer than lots of the creating economies with which it competes for funding, has confirmed an inhospitable marketplace for different auto trade gamers.

Harley’s resolution comes weeks after Toyota Motor Corp. stated it received’t increase additional in India because of the nation’s excessive tax regime.

Last 12 months, Ford Motor Co pared again its pursuits and ceased unbiased operations in India by coming into right into a three way partnership with Indian automaker Mahindra & Mahindra. General Motors, which stopped home gross sales in 2017, additionally plans to cease manufacturing and exports from India by the top of this 12 months.

Growth in home gross sales has slowed of late — with gross sales of automobiles and motorbikes falling 18% within the final fiscal 12 months to March 31 from a 12 months in the past.

The central authorities has been making an attempt to reverse the pattern with a plan to supply $23 billion of incentives to draw companies to arrange manufacturing, folks aware of the matter stated this month, together with production-linked breaks for automakers. The programme is being spearheaded by the nation’s coverage planning physique and is just like a scheme carried out earlier this 12 months aimed toward drawing companies away from China.