Updated: September 24, 2020 9:01:03 pm
Harley-Davidson Inc. store on Khader Nawaz Khan Road in Chennai, Tamil Nadu, India on Monday, July 21, 2014. (Photographer: Sanjit Das / Bloomberg)
Harley-Davidson Inc said Thursday it would suspend its sales and manufacturing operations in India, effectively exiting the world’s largest motorcycle market after a decade of unsuccessful efforts to gain a foothold.
Harley had spent the past few months moving dealerships across the country to cheaper locations, and the announcement followed speculation in Indian media a month ago that executives had downplayed.
The move involves $ 75 million in restructuring costs, some 70 layoffs and the closure of its Bawal plant, away from a market worth around 17 million sales of bicycles and scooters a year. (bit.ly/3mPHZnx) It will only keep a small sales office in Gurgaon, south of New Delhi.
The exit is also the latest setback for Prime Minister Narendra Modi’s strategy of encouraging domestic manufacturing that would preserve more fruits from a gigantic domestic consumer market in India.
Harley has been struggling for years to increase sales beyond the baby boomers in the United States and has not seen retail sales growth there in the past 14 quarters.
CEO Jochen Zeitz, who took over the reins of the company in February, released a major “Rewire” in July to boost earnings by reducing Harley’s product portfolio by 30% and investing in 50 markets with potential for growth. growth in North America, Europe and spare parts. from Asia Pacific.
India was one of the markets in which the company was committed at the time to invest more. Thursday’s statement said the decision to leave had been carried out since August 6.
Harley said it now expects total restructuring costs of about $ 169 million in 2020, but cautioned that the restructuring program, referred to internally as “The Rewire,” will likely incur more charges.
India, still much cheaper and poorer than many of the developing economies it competes with for investment, has proven to be an inhospitable market for other players in the auto industry.
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