Harley-Davidson evaluates partnerships to stay in India after exit

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The company said it now expects total restructuring costs of about $169 million in 2020, and this will also include a workforce reduction of about 70 employees in India, a market where its annual sales volumes account for less than 5% of the company's total.

The company's assembly plant at Bawal in Haryana was its second facility outside the United States after Brazil, and it planned to use the unit to export to Europe and Southeast Asian markets.

Harley however is in talks with Hero MotoCorp to enter into a distribution arrangement that will allow the Indian company to import and sell Harley bikes as its sole distributor, two sources with familiar with the talks said.

Harley manufactured just 4,500 motorcycles during that period, largely assembled from imported knock-down kits at its plant near New Delhi, which it will shut as part of its announced restructuring.

Ford Motor and General Motors have both pared their India operations in recent years.

While it is cheaper than many other developing economies, India has proven a tough market to crack for foreign automakers.

The exit is a blow for Indian Prime Minister Narendra Modi's efforts to lure or retain foreign manufacturers.

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

The coronavirus pandemic has dealt a blow to the bike maker, which was struggling already with an average sale of 3,000 units a year.

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 has been scrambling for years to grow sales beyond baby boomers in the USA and has not posted retail sales growth there in the past 14 quarters, Reuters reported.

According to an earlier report, Harley-Davidson plans to reduce its product portfolio by 30%. The company said it has more than 25,000 bike owners in India.

The move has been executed as part of the firm's "Rewire" programme that focuses on overhauling its operating model and market structure.

The Milwaukee-based company refers to restructuring actions related to employees and other services as?'The Rewire'.

In a filing to the United States Securities and Exchange Commission (SEC), Harley Davidson said it intends to optimise its global dealer network, exit certain worldwide markets, and discontinue its sales and manufacturing 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.

In the past year, Harley has become a rallying point for the USA government to push for reduction of import duty on American motorcycles.

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