Iconic American motorcycle manufacturer Harley Davidson is reportedly looking to pull out of the Indian market due to poor sales and a bleak outlook.
The company has sent feelers to a few automakers for a possible outsourcing arrangement to use its leased assembly facility, The Hindu reports, quoting officials. The company spokesperson, however, declined to comment.
Harley Davidson entered the Indian market a decade ago, but has so far managed to sell only 27,000 bikes, barely half of what the country’s segment leader Royal Enfield sells in a month. In the first quarter of this fiscal it sold only 100 motorcycles and for the whole of last fiscal it was 2,470 units.
The Milwaukee-based motorcycle maker had recently unveiled its “rewire” strategy in the wake of Covid-19 pandemic and has decided to focus on about 50 markets, mainly in North America, Europe and parts of the Asia Pacific that represent the “majority of the company’s volume and growth potential.”
While announcing its second-quarter results last month, Harley-Davidson had said it was evaluating plans to exit international markets, where volumes and profitability are low.
Interestingly, two years ago US President Donald Trump had cited the example of Harley Davidson while criticizing India of building unfair trade barriers by imposing high import levies on products manufactured in the US.
Though India is one of the biggest two-wheeler markets, it is dominated by the commuter bike segment, many of which are below 150 cc. The leisure bike segment, which Harley Davidson caters to, is too small and it is dominated by Royal Enfield’s Bullet.
Another deterrent is affordability. An entry-level Harley Davidson bike – Street 750 – costs around 470,000 rupees ($6,270), while a Royal Enfield’s Bullet can be purchased at a quarter of this price. Even without levies, the price difference between the two bikes is wide.
If Harley-Davidson decides to exit the Indian market, it will be the second US automaker to shut operations during Trump’s tenure. In 2017, carmaker General Motors wound up its operations in the country and sold its plant in Gujarat.