Harley-Davidson will stop selling, making bikes in India

Last updated on September 25th, 2020 at 03:29 pm

Milwaukee-based Harley-Davidson Inc. plans to stop selling and making motorcycles in India within the next 12 months as new chief executive officer Jochen Zeitz continues to overhaul the company’s operations.

Harley announced the decision to employees Thursday as part of additional restructuring actions the company is taking related to Zeitz’ Rewire initiative. In July, the company announced plans to cut 700 jobs from the company globally.

Exiting the Indian market will eliminate another 70 positions from the company.

Harley also said it would be taking steps to optimize its global dealer network and exit certain other international markets in addition to leaving India.

All told, the restructuring actions the company has announced in the last three months will cost around $169 million this year, including $75 million for the actions announced Thursday.

Harley has a 68,000-square-foot manufacturing facility in India where the company assembles certain models for the Indian market and makes its Street motorcycles for non-North American markets.

The plant in India started operating in 2011. It is a complete knock down facility where motorcycles are assembled from kits sent from operations in the U.S. The approach, which Harley also uses for facilities in Brazil and Thailand, allows the company to avoid steep tariffs on its heavyweight motorcycles.

Those tariffs – at times 50% to 100% per motorcycle – were highlighted by President Donald Trump in recent years as an example of unfair trade practices by other countries.

While the Indian market offered opportunity for Harley – more than 17.4 million two-wheeled vehicles, including scooters and mopeds, were sold there last year – the company did not gain traction. Media reports this winter indicated the company had reached 25,000 motorcycles sold a decade after entering the market.

The New York Times reported the company sold around 3,000 motorcycles in the country in 2017. More than 242,000 new Harley-Davidsons were sold by dealers worldwide that year, including 30,348 in the Asia Pacific region.

Under Matt Levatich, Harley’s previous CEO, the company planned to launch a 250 to 500cc motorcycle in India within two years. Those plans were announced in 2018.

But when Harley announced Qianjiang Motorcycle Co. Ltd. as its partner to make the motorcycles with in 2019, the company said it would plan to launch in China by the end of 2019. A company spokesperson said at the time that the plan had always been to explore emerging Asian markets and the opportunity to launch in China presented itself.

“India is still a key market for us,” the spokesperson said.

Levatich, however, was forced out of the company this spring by investors unhappy with the direction Harley has taken in recent years. After peaking around 2014, sales have generally trended downward for a variety of factors.

Zeitz, then a Harley board member, stepped in as acting CEO initially and then took on the job full-time. Since then, he’s been readying a new strategic plan for the company to be released later this year.

The plans he has already announced call for the company to better balance its core strength with expansion into new markets. Zeitz told analysts in April the company may have over-indexed on pursing new riders and new market growth.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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