Harley books $75 million in fresh restructuring costs, exits India

Harley-Davidson Street 750 MY20

Staying in the Indian market has not been profitable for the firm

US motorcycle maker Harley-Davidson said on Thursday it expects to report $75 million in additional restructuring costs for 2020 related to actions including discontinuing its sales and manufacturing operations in India.

Industry sources said the company is looking to tie up with a partner to run its business in the country.

The withdrawal from India is a blow to Indian Prime Minister Narendra Modi's "Make in India" strategy, where he has urged foreign businesses to manufacture goods locally.

The move involves $75 million in restructuring costs, some 70 redundancies and the closure of its Bawal plant, walking away from a market worth about 17 million bike and scooter sales a year. "All options are open at this stage", said a Harley-Davidson official, requesting anonymity.

Harley-Davidson India Operations
Motorcycle maker joins the list of many brands that have exited India recently

Last year, another USA automaker Ford Motor Company pared back its interests and ceased independent operations in India. The reasoning is a fairly logical one as the models don't now meet incoming Euro5 emissions regulations and Harley-Davidson isn't in a position to commit the cost needed to update them.

India later slashed the tariffs by 50 per cent but the brand was unable to get traction in the notoriously challenging market.

Harley has also been suffering its own problems and recorded its first quarterly loss in more than a decade between April and June this year. The firm had already indicated that it will be focusing on its core markets like the U.S. and exit loss-making markets like ours.

Harley had high hopes for an expansion in India as sales decline steadily at home.

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India was one of the markets the company at that point committed to investing in more heavily.

Sanjeev Rajasekharan, managing director of India, has been transferred to Singapore, where he will be head of Asia and emerging markets of the company.

Harley Davidson's portfolio in India includes bikes like Street 750 and Iron 883, among others with prices starting from Rs 4.69 lakh and going up over Rs 18 lakh.

Incidentally the bike maker has had a better run in other Asian markets like Thailand and Korea, precisely because the market and cost structures are more favourable.

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Is Harley-Davidson shutting down in India?

In the recent past, US President Donald Trump criticised India's high import tariff on the iconic Harley Davidson motorcycles as "unacceptable" as the two countries negotiated for an elusive trade deal. The company confirmed through a press statement that it is communicating with its customers across India and will keep them updated on future support.

Image copyright Getty Images Image caption Dennis Hopper and Peter Fonda ride Harley-Davidsons in a scene from the film Easy Rider. The news broke following a filing to the US Securities and Exchange Commission by the motorcycle brand.

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