The iconic American motorcycle brand Harley Davidson has announced to stop its manufacturing and massively scaling back its sales operations in India.
This move is a part of the Harley Davidson’s global strategy – the Rewire – that was revealed by the new CEO Jochen Zeitz.
This decision comes weeks after Toyota said it wouldn’t expand further in India which is the biggest Motorcycle market, due to the country’s high tax regime.
Reportedly, the shutting of operations involves $75m in restructuring costs, around 70 redundancies, and the closure of its Bawal plant in northern India.
Bawal plant was opened in 2011 but Harley-Davidson has struggled to compete with local brand Hero as well as Japan’s Honda.
About 17 million motorcycles and scooters are sold each year in India.
According to the official statement by the company, Harley Davidson India will ‘reduce the size of its sales office in Gurugram’,
The shutting down operations of its facility in Bawal will mark the end of its most popular model in India – the Street 750.
The closure of Harley’s operations in India will be a major blow to the Indian economy and especially Prime Minister Narendra Modi who is trying to lure international investors.
United States President Donald Trump has previously complained about India’s high taxes, specifically mentioning the levies placed on Harley-Davidson bikes.
India’s import tariffs were edged down by 50% but the brand has still struggled in the competitive market.
Harley Davidson entered the Indian market in 2009 and was one of the first premium bike makers in the country.
However, in the span of 10 years, the bike maker only managed to sell just 25000 units due to the dwindling economy of the country that is struggling more amid the coronavirus pandemic.