After announcing its plans to shut down its plant in India, Harley-Davidson is reportedly in talks with the country’s leading motorcycle maker Hero MotoCorp for a sales pact.
Media reports say the iconic US bike maker is working toward a distribution arrangement with Hero and the Indian company will sell Harley-Davidson as its sole distributor.
The two companies are working out the modalities of managing Harley’s 33 outlets in India and the US company is considering importing motorcycles from its Thailand plant for distribution in India, CNBC-TV18 reports quoting sources.
Talks are also on to make Hero the contract manufacturer of low capacity 300-600 cc engine capacity bikes to cater to the Indian market. Harley-Davidson had earlier announced plans to manufacture such bikes in partnership with Chinese manufacturer Qianjiang Motorcycle Co to cater to China and other developing markets.
For Hero, such an arrangement would help entry into the 300cc plus segment, where Royal Enfield holds a dominant position. However, the Indian bike maker may not take over Harley-Davidson’s Indian plant or any assets as it has enough capacity for contract manufacturing on its premises.
On Thursday, Harley-Davidson announced in its SEC filing that it would discontinue sales and manufacturing operations in India and lay off 70 employees as part of its “rewire” program in the wake of the Covid-19 pandemic.
For the second quarter that ended on June 30, the bike maker reported a loss of US$92 million – its first quarterly loss in more than a decade.
The Federation of Automobile Dealers Associations has said Harley-Davidson’s plant closure would lead to a loss of 2,000 jobs at retail outlets across the country. The federation also said the brand’s dealer partners would incur losses and no compensation package has been announced for them.
It also called for the need for a Franchise Protection Act in the country to avert brands from abruptly closing their operations and leaving their partners in a fix.
Though Harley-Davidson has been in India for more than a decade, it failed to gain a foothold in the world’s biggest motorcycle market, as its models are beyond the reach of most Indian bike enthusiasts.
It joins the growing list of automotive brands, such as General Motors, Fiat, Ssangyong, Scania, MAN and UM Motorcycles which have exited India over the last few years.