US motorcycle maker Harley-Davidson has confirmed that it is exiting the Indian market as it looks to restructure operations and optimise its global dealer network, amid slowing sales. It will be discontinuing its sales and manufacturing operations in India, which will result in approximately 70 employees being laid off, the company said in a statement.
Ever since the motorcycle maker entered the Indian market a decade ago, it has struggled to gain a significant market share and has reportedly sold less than 30,000 bikes in the country. In the last financial year, it reportedly sold 2,676 bikes, 22% less than the 3,413 units sold in FY18. India was among its worst performing markets.
Harley-Davidson has one manufacturing facility in Bawal, Haryana, which is a leased assembly unit.
On a global level too, the company has been plagued with slowing business, further worsened by the pandemic.
In July, the company announced an overhaul of its global operating model, including a leaner, more nimble organization under its ‘Rewire’ strategy. Harley-Davidson said at the time that the initial Rewire actions are expected to result in restructuring costs of approximately $42 million in Q2 2020 and that the streamlined structure would result in around 500 employees being laid off globally.
It also plans to reduce its product portfolio by 30% and only invest in 50 markets with growth potential in North America, Europe and parts of Asia Pacific.
On Thursday, the company announced additional restructuring actions, which included exiting the Indian market.
As part of this, the company expects to incur restructuring expenses of approximately $75 million in 2020, of which approximately 80% are expected to be cash expenditures, including one-time termination benefits of approximately $3 million, non-current asset adjustments of approximately $5 million, and contract termination and other costs of approximately $67 million.
According to reports, the company might only provide after sales support for vehicles that have already been sold and then sell imported bikes in the country.