Harley Davidson pulls out of India in a decade-long effort to break into the world's largest motorcycle market.
The US giant said in a statement on Thursday that it would close its plant in Bawal in northern India and "significantly reduce" the size of its sales office near Delhi.
Meantime, dealers will serve customers until the end of their contracts and the company will explore ways to continue selling its popular motorcycles in the Asian country.
India is the world's biggest market for motorcycles and scooters, with more than 17 million sold last year, according to the Society of Indian Automobile Manufacturers.
According to the Indian Automobile Manufacturers Association, India is the world's largest market for motorcycles and scooters with more than 17 million units sold in 2019.
When Harley-Davidson (HOG) entered India in 2010, it was the second-fastest growing two-wheeler market in the world behind China. But its 33 dealers have collectively sold just 25,000 motorcycles since then, according to the company.
In 2010, when Harley-Davidson entered the Indian market, it was the second fastest growing bike market in the world after China, yet, its 33 dealers have sold only 25,000 motorcycles so far, suffering from high import duties and sales taxes.
The news of the company’s downturn will be a blow to Prime Minister Narendra Modi's, who seeks more foreign direct investments (FDI), expanding India's manufacturing base. Meanwhile, the US manufacturer is set to be in talks with Hero MotoCorp, India's largest two-wheel manufacturer, concerning a potential distribution deal in India.
Harley-Davidson austerity plan amidst COVID crisis
"Complete rewiring is essential to make Harley-Davidson a high-performance company," CEO Jochen Zeitz said, adding that the company was fighting a drop in sales even before the coronavirus spread, reducing demand for luxury products.
Also, in recent years, both Ford and General Motors have cut operations in India. The closure is part of Davidson's reform unveiled in July, which will see a focus on North America, Europe and parts of Asia-Pacific, including simpler models.
Harley-Davidson is an American motorcycle manufacturer founded in 1903 in Wisconsin. It was one of two major American motorcycle manufacturers to survive the Great Depression.
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