Harley-Davidson is pulling out of India, the world’s greatest bike market.
The long-lasting US bike model is stopping manufacturing and massively scaling again its gross sales operations.
Harley’s determination comes weeks after Toyota mentioned it would not develop additional in India as a result of nation’s excessive tax regime.
The exit is a blow for Indian Prime Minister Narendra Modi’s efforts to lure or retain international producers.
Harley’s departure entails $75m (£59m) in restructuring prices, round 70 redundancies and the closure of its Bawal plant in northern India.
The plant was opened in 2011 however Harley-Davidson has struggled to compete with native model Hero in addition to Japan’s Honda.
About 17 million bikes and scooters are offered annually in India.
Whereas it’s cheaper than many different growing economies, India has confirmed a tricky market to crack for international automakers.
Normal Motors pulled overseas in 2017 whereas Ford agreed final yr to maneuver most of its property right into a three way partnership with Indian car large Mahindra & Mahindra.
US President Donald Trump has beforehand complained about India’s excessive taxes, particularly mentioning the levies positioned on Harley-Davidson bikes.
India’s import tariffs have been slashed by 50% however the model has nonetheless struggled within the aggressive market.
Harley has additionally been struggling its personal issues and recorded its first quarterly loss in additional than a decade between April and June this yr.
It has been reducing lots of of jobs beneath its new chief govt Jochen Zeitz and specializing in core markets and fashions.
Harley could not play the sport
By Nikhil Inamdar, BBC Information’ India enterprise correspondent
Harley Davidson got here into India with a lot fanfare a decade in the past. Nevertheless it has since, struggled to discover a foothold in one of many world’s most profitable two-wheeler markets.
With gross sales averaging beneath 3,000 items yearly, the long-lasting American model merely could not capitalize on the large Asia alternative it was betting on.
Auto specialists put the blame on the model’s failure to drive up volumes and derive value efficiencies by leveraging native tie-ups.
This, coupled with prohibitively excessive taxes, a slowdown in discretionary spending and an lack of ability to compete with Indian manufacturers could have prompted the choice to name it quits.
“India is a excessive quantity, low margin market. They weren’t structured to play that sport, being on the very pointy finish of the pyramid,” Hormazd Sorabjee, Editor of Autocar India informed the BBC.
“The approach to life component that goes with proudly owning a Harley bike can also be not totally developed in India but.”
By the way the bike maker has had a greater run in different Asian markets like Thailand and Korea, exactly as a result of the market and price buildings are extra beneficial.
Harley’s exit could not have a big financial impression, however is unhealthy optics for the Modi authorities, which is getting ready to roll out a $23bn package deal to lure world producers to arrange base in India as a part of the nation’s ‘Make In India’ coverage.
Excessive import tariffs on Harley have additionally been a flashpoint in India’s commerce negotiations with the US.
Mr Trump has beforehand cited the instance of Harley to name India a “tariff king”, and its determination to exit the Indian market may nicely set off one other diplomatic tussle with the US with whom India is negotiating a free commerce settlement.
Harley Historical past
The long-lasting US bike model was based in 1903 and has constructed a really loyal buyer base. It has homeowners’ golf equipment everywhere in the world.
It hit the worldwide stage in 1969 due to the basic highway film Simple Rider starring Dennis Hopper, Peter Fonda and Jack Nicholson.
Its bikes, nicknamed “hogs”, are additionally made in factories within the US, Brazil and Thailand.
Harley has been trying to develop the model past child boomers within the US, with smaller fashions and all-electric variations.