American motorcycle brand Harley-Davidson may be looking to wind up its assembly operations in India, due to weak sales and lack of future demand. According to a media report, the iconic brand has sent out feelers to a few automakers through consultants for a possible outsourcing arrangement using its leased assembly facility at Bawal in Haryana. The Hindu has reported that although the talks are at a preliminary stage, H-D officials are planning to exit India also because they do not see a growth for future demand in India.
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Consumer interest in big, heavyweight cruisers seem to be on the decline in India
When carandbike reached out to a representative of Harley-Davidson, the company responded saying that it "does not comment on speculation and rumours." The decision to exit India is apparently in line with "The Rewire" strategy outlined by Harley-Davidson's Chairman, President and Chief Executive Officer, Jochen Zeitz. The new strategy will focus on about 50 markets, mainly in North America, Europe, and parts of Asia Pacific that represent the "majority of the company's volume and growth potential."
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Jochen Zeitz, has been appointed Chairman, President and CEO of Harley-Davidson
The Rewire strategy will also re-look new products and focus on Harley-Davidson's traditional strengths as a brand. The Harley-Davidson Bronx, a streetfighter which was supposed to be a new, sportier motorcycle, has been taken off from the company's 'Future Models' section of the website. The Bronx was slated to be launched in 2021, along with the brand's first adventure touring model, the Pan America. In a statement last month, accompanying its second quarter results for 2020, Harley-Davidson said that "the company is evaluating plans to exit international markets, where volumes and profitability do not support continued investment in line with future strategy."
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The Harley-Davidson Street 750 is the brand's best-selling offering in India
The problem apparently seems to be that the brand is losing sheen in India. While Harley-Davidson has been the leading premium motorcycle brand in India for several years in a row, most of the sales have been from the made-in-India Street series of motorcycles, the least expensive Harley-Davidson bikes available on sale. In the last financial year, Harley-Davidson sold fewer than 2,500 units, and between April-June 2020, only about 100 Harleys were sold in India, making it one of the worst-performing international markets. Even the bestselling Street 750 and Street Rod models have been offered on sale with heavy discounts of up to Rs. 77,000.
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The Harley-Davidson Fat Boy is one of the most well-known models
Harley-Davidson has been reeling under poor sales for the past few years, even in its home market of US, as the traditional customer base has disappeared, and what Harley says, lack of new riders. But the problems of Harley-Davidson are more than just customer base. In markets like India, the premium motorcycle customer has moved on from preferring heavy, chrome-laden cruisers to performance sport bikes, and do-it-all adventure bikes, both segments where Harley-Davidson has no products, yet.
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If at all Harley-Davidson decides to exit India, it is expected to run a skeletal operation to provide after sales support for the motorcycles already on the road in India, to support its dealers and will likely only sell fully imported bikes. With the success of the Harley-Davidson Street 750, the brand was expected to also launch a smaller, possibly 300-350 cc model in India, to tap a growing middle class. However, that vision also seems to have changed now, with Harley-Davidson trimming down its global operations and network to focus on key models, and markets where there is still growth, and preference, for heavyweight traditional American cruisers.
(Source: The Hindu)
