Harley-Davidson is emerging from India, the world’s largest motorcycle market.
Iconic U.S. The motorcycle brand is shutting down its production and scaling up its sales operations on a large scale.
Toyota said it would not expand further in India due to the country’s tax regime, thousands of weeks after Harley’s decision.
The exit is a tweak to Indian Prime Minister Narendra Modi’s efforts to lure or retain foreign producers.
Harley’s departure includes a re-creation cost of 75m (£ 59m), about 70 redundancies and the closure of its acacia plant in northern India.
The plant opened in 2011 but Harley-Davidson has struggled to compete with local brand Hero, Japan’s Honda.
About 17 million motorcycles and scooters are sold in India every year.
More shock
Although it is cheaper than many other developing economies, India has proved to be a difficult market for foreign auto toe manufacturers to crack.
General Motors exited the country in 2017 when Ford planned to move most of its assets in a joint venture with Indian automotive company Mahindra and Mahindra last year.
US President Donald Trump had earlier complained about India’s high taxes, especially on Harley-Davidson bikes.
India’s import tariffs were slashed by 100 per cent but the brand could still struggle in a competitive market.
Harley is also facing its own problems and has recorded its first quarterly loss in more than a decade between April and June this year.
It is cutting hundreds of jobs under its new chief executive Jochen Zitz and focusing on key markets and models.
Harley couldn’t play the game
By Nikhil Inamdar, Indian News correspondent for BBC News
Harley Davidson came to India with great fanfare a decade ago. But since then, it has struggled to find a foothold in one of the most lucrative two-wheeler markets in the world.
With an average sales of 20,000,000 units per year, the iconic American brand cannot afford to bet on the big opportunity in Asia that it is betting on.
Auto toe experts blamed the brand’s failure to drive volume and achieve cost efficiency by taking advantage of local tie-ups.
This will prompt the decision to abandon it due to lower taxes, prudent spending cuts and inability to compete with Indian brands.
“India is a high volume, low term market. They weren’t designed to play that game because they were at the very end of the pyramid.”
“The lifestyle element that Harley bikes have is not yet fully developed in India.”
Incidentally the bike maker has outperformed other Asian markets such as Thailand and Korea, as the markets and cost structure are more favorable.
Harley’s exit will have no significant economic impact, but is a bad optics for the Modi government, which is preparing a 23 23 billion package to lure global manufacturers to set up bases in India as part of the country’s ‘Make in India’ policy. .
High import tariffs on Harley have also been a flash point in India’s trade negotiations with the US.
Mr. Trump previously cited the example of Harley for calling India the “Tariff King,” and his decision to pull out of the Indian market led to the U.S. With that could come another diplomatic tussle with which India is negotiating a free trade agreement.
Harley History
The iconic US motorcycle brand was founded in 1903 and has built a very loyal customer base. It has owners clubs all over the world.
It reached the global level in 1969 thanks to the classic road movie Easy Rider starring Peter Fonda and Jack Nicholson on Dennis Hopp.
His bike, named Hugh, is also made in factories in the US, Brazil and Thailand.
Harley U.S. In addition to Baby Boomers, the company is looking to grow the brand with smaller models, Dello and all-electric versions.
