Harley-Davidson may exit India

Weak sales and a lack of visibility for future demand are reasons cited

Barely a decade after its entry, Harley-Davidson Inc. is looking to wind down its assembly operations in the country as a result of weak sales and a lack of visibility for future demand, industry executives said.

The iconic U.S. motorcycle maker has sent out feelers to a few automakers through consultants for a possible outsourcing arrangement using its leased assembly facility at Bawal in Haryana, a person privy to the preliminary talks said.

The decision is in keeping with its latest ‘rewire’ strategy to focus on about 50 markets, mainly in North America, Europe and parts of Asia Pacific that represent the “majority of the company’s volume and growth potential”. In a statement accompanying its second-quarter results last month, Harley- Davidson said: “The company is evaluating plans to exit international markets, where volumes and profitability do not support continued investment in line with the future strategy.”

Harley-Davidson India sold fewer than 2,500 units in the last financial year, industry officials said.

If the company, which saw U.S. President Donald Trump passionately lobby India for lower tariffs on its two-wheelers, does indeed exit, it would mark the second departure of an American automaker, after General Motors wound up its domestic operations and sold its Gujarat plant in 2017.

The company declined to comment on its immediate plans for India and an external spokesman said it “does not comment on speculation”.

The motorcycle maker is expected to continue to run a skeletal operation to provide after sales support for the motorcycles already on the road in the country, to support its dealers and likely sell fully built imported bikes, the person said.

Harley-Davidson India sold fewer than 2,500 units in the last financial year and only about 100 bikes between April-June 2020, industry officials said, making India one of its worst-performing international markets.

As recently as in July 2018, the company had shared its plans to tap a growing middle class by introducing “a 250-500cc motorcycle within 2 years in India”.

To offload unsold inventory, the company recently offered heavy discounts in the range of ₹65,000 to ₹77,000 on two of its models.

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