Harley-Davidson, one of the world's leading luxury motorcycle manufacturers, is leaving India. Leaving India will cost the company 75 million in restructuring costs. The agency quoted a statement from the Hindustan Times as saying.
Announcing its departure from India, the company said in a statement that it had agreed to take additional restructuring action on the global dealer network, international markets, sales in India and suspension of motorcycles from August 8 to September 23 this year.
As Harley Davidson announced two months ago, Harley Davidson now wants to focus on North America, Europe and the Asia-Pacific region.
They want to push harder to capture the current market like the United States and walk the path of making profitable motorcycles. The company also wants to exit the small market. Of the 75 million (75 million) of reconstruction costs, 60 percent will be in cash. Of this, about 3 million will be spent on one-time layoffs. The company will have to spend about 6 million, including about 5 million in non-current asset adjustments and termination of contracts and other costs.
They want to complete all the restructuring work in the next 12 months.
Harley-Davidson said their total reconstruction cost this year would be 189 million. Of these, about 60 are laid off in India. Harley's business in India was not going well for various reasons including Corona. Less than 5 percent of their total sales are sold in India. Then the company suffered due to coronavirus.
35 dealerships closed, 2000 people will lose their jobs
Meanwhile, Harley's dealers are angry over the decision to rush business from India. Because the dealership was taken after spending a lot of money just to sell Harley's motorbikes. They are in real danger. Fader, an organization of dealers, complained that it would hurt many people. More than 2,000 people will lose their jobs as 35 dealerships close.
Harley said that even if they close the business, Indian buyers will be able to serve the dealers as per the agreement with the partners. The company will continue to keep in touch with buyers in the future and provide assistance if needed. However, about 60 workers will lose their jobs.
However, according to another source, Harley Davidson is interested in selling and discounting in India even though it has stopped making motorbikes. Talks are going on with Hero Moto Corporation for this. The source claimed that if the distribution agreement is signed, Hero will be able to import and sell Harley bikes.
Many of the world's largest companies are in business because of the coronavirus. The sale-discount has come down. For various reasons, the sales of Harley motorcycles were gradually decreasing in India. The situation is further complicated by the Kovid-19 epidemic. Last financial year, Harley Davidson managed to sell less than two and a half thousand units of motorcycles in India.
The US company sold 100 bikes in the three months from April to June this year. For this reason, the US company recently reduced the price of multiple models. The company announced the release of 250cc bikes in July 2018 within two years to popularize the middle-class luxury motorcycle. In the meantime, Harley has reduced the price of its two models from Rs 75,000 to Rs 6,000. But still sales have not increased.
According to The Hindu, Harley Davidson is leaving India in a decade due to low sales and lack of demand in the future.
A few days ago, Harley Davidson brought a 336cc motorcycle to compete with Indian motorcycle manufacturer Royal Enfield.
The US company has brought this motorcycle to compete with the bullet brand motorbikes of Enfield. But sales did not go well.
In the United States, meanwhile, Harley-Davidson has already hit the domestic market due to the lack of affordability among young buyers to buy expensive motorcycles.
Harley-Davidson, which is famous for making motorcycles, started its business in 2011 by setting up a factory in Bawale, Haryana, India. India, one of the largest economic powers in Asia, is the world's second largest motorcycle market. Harley started his business in the country as the demand for luxury motorcycles increased day by day along with the economic development.
India is basically one of the largest market for low cost and relatively affordable motorcycles.
However, with the large middle class population as well as the growing number of upper class people, the country has created a massive market for expensive and luxurious motorcycles.
About 12 models of Harley-Davidson imported motorcycles are sold in major cities of India at a price of Rs 5 lakh to 36 lakh. Ahead of former US President Barack Obama's visit to India, Harley-Davidson announced the manufacture of 2011 motorcycles in India.
After the United States, Harley-Davidson built such factories only in Brazil. India will be the third country where Harley-Davidson is setting up a factory to make motorcycles. India is the second largest motorcycle market in the world after China.
Rapid economic growth has led to a huge increase in the number of wealthy people in the country, creating a market for luxury and fashionable motorcycles. Harley Davidson's goal was to capture the market. But Donald Trump's country company is doing business within the first decade of not starting business. Harley-Davidson is the second U.S. carmaker to leave India under Donald Trump as president. Earlier in 2016, General Motors closed its factory in Gujarat.
Please do not copy and paste from the internet, Your post must be in your own words and properly cited, If you continue to post in this manner you will be referred to the blacklist.