Harley-Davidson may exit India due to poor sales

The iconic American Harley-Davidson motorcycle may not be produced in India anymore, going by indications of their sales performance and announcements from the global management.

The company, which began operations in India in 2009, has a plant in Bawal (Haryana).

Before the Covid-19 pandemic, the industry was already going through a prolonged slowdown. The pandemic has only made things worse, particularly for the premium segments in the country that is the largest two-wheeler market.

Responding to a query about the reports, Harley-Davidson India said: "Harley-Davidson does not comment on speculation and rumours."

In a recent announcement about plans to 'rewire the company', Harley-Davidson had said: "Harley-Davidson plans to concentrate on approximately 50 markets primarily in North America, Europe and parts of Asia Pacific that represent the vast majority of the company's volume and growth potential. The company is evaluating plans to exit international markets where volumes and profitability do not support continued investment in line with the future strategy."

There were also reports that Sajeev Rajasekharan, Managing Director, Asia Emerging Markets and India, would be transferred to Singapore and their sales and marketing operations in India would be reduced.

An H-D report mentioned that its retail sales were down 10 per cent in the Asia Pacific region in the second quarter of 2020 as compared to the same period in 2019.

In India, data from the Society of Indian Automobile Manufacturers (SIAM) showed that the company's domestic cumulative sales figure in the 2019-20 financial year was just under 2,500 units (2,470 for 2019-20 vs 2,676 for 2018-19). In comparison, Royal Enfield sold just over 42,000 units in FY 2019-20, according to SIAM.

If in case the company's exit plans are true and there is import of motorcycles, it will push up the cost of buying significantly due to the high import duties and taxes that are imposed on completely built units (CBUs). In fact, US President Donald Trump has repeatedly hit out at India for the high cost of importing H-D motorcycles to India.

India is primarily a mass commuter segment motorcycle market. Though there are takers for the big bikes, sales of premium segment motorbikes is very small compared to the overall market.

Recently, H-D had announced prices for its BS-VI range and had even slashed prices of its cheapest model (Street 750 is now Rs 4.69 lakh, ex-showroom Delhi). The company sells 13 models in India. The Fat Boy is priced at Rs 18.25 lakh, while the CVO Limited is around Rs 50 lakh.

H-D has 33 dealerships across India. H-D manufacturers the Street family and the plant also assembles completely knocked down kits of bigger motorcycles.