Harley Davidson Is Leaving India; Company, a Big Restructuring Will Cost $75 Million

by Shatakshi Gupta

United States motorcycle giant Harley Davidson has announced the closure of its business in India.  The company announced the Global Restructuring initiatives last year.  Under this, the business was to be closed in countries where the company’s sales and profits are low.  The consolidation of business in India is also part of this strategy.

 Harley is the third US auto company to close its operations in India.  In 2017, American car company General Motors closed its business in India and sold its plant in Gujarat.  Last year, Ford transferred most of its assets to Mahindra & Mahindra in a Joint Venture.

Dealt heavy losses

 Harley bikes make a place in the premium segment and the company has decided to exit the Indian market due to the ever-decreasing demand in India.  Harley Davidson entered the Indian market a decade ago but has so far sold only 27,000 bikes. On the other hand, Royal Enfield, the leader in this segment, sells this much in a month only. 

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No major Job Losses

 As a result of Harley’s move, around 70 employees of the company will be unemployed in India.  At the same time, Managing Director of India, Sanjeev Rajasekharan has been transferred to Singapore, where he will serve as the principal officer of Asia. 

The company estimates the move would cost $75 million in restructuring.  Which includes the cost of a lump sum of about $3 million on expiration, about $5 million on non-current assessment adjustments and $ 67 million on contract termination.

 Harley in India

Only 5 per cent of Harley’s total sales come from the Indian market.  Harley currently has an assembly plant in Haryana, where it assembles motorcycles solely for local sale.  At the same time, the company also imports fully manufactured motorcycles in India.  The assembly plant located in Haryana was started in August 2009.  In July 2010, the company opened its first dealership at the same branch.