Things have been tough for automobile manufacturers for the past few months but it seems like iconic American motorcycle brand, Harley-Davidson has faced the worst brunt of it. The company has now announced that it will shut down manufacturing and sales operations in India as part of its restructuring exercise under ‘The Rewire’ programme. As motorcycling genres evolved and expanded, Harley-Davidson’s tramlined range offered a limited choice to enthusiasts, while other brands kept on dishing out newer and varied experiences.
Since last month, it is being speculated that American brand will downsize its operations in India but in a shocking turn of events, H-D has decided to exit the Indian market altogether.
According to Reuters, the parent company now expects $75 million in additional restructuring costs for 2020 and has opted to halt sales and manufacturing operations in India. This is the result of a poor sales record which got further fuelled by the pandemic. Harley-Davidson India sold less than 2,500 units in the last financial year, making it one of its worst-performing international markets. The last quarter saw a year-on-year dip in retail sales of 27 per cent, the worst-ever in the past six years.
Some estimates suggest that plans of Chief Executive Jochen Zeitz, who took primary charge in February, may wipe out nearly 700 positions but also save the company money to the tune of $100 million. About 70 of Harley-Davidson’s employees will be laid off as a result in India. The company has an assembly unit in Bawal, Haryana. Harley-Davidson will join the growing list of automotive brands, such as General Motors, Fiat, Ssangyong, Scania, UM Motorcycles, which have exited India over the last 3-4 years.
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Harley-Davidson’s new CEO Joechen Zeitz unveiled a strategy called ‘The Rewire’, which will help the manufacturer work lean and focus on core markets, where the brand can foresee revival. For the uninitiated, Harley-Davidson posted a $92 million net loss in the second quarter of this year and sales have been dismal even in the much-important home market. To enhance profits and make the brand more accessible in markets like India, the company introduced entry-level models like the Street 750, which offered the Harley experience at a lower price. The bike did well initially, however, sales started dwindling after the arrival of more modern choices.
Harley-Davidson was among the first premium motorcycle brands which started their operations in India. And it is sad for all the motorcycling fraternity to bid a farewell to the iconic American brand.