Harley Davidson leaves India after poor sales

NEW DELHI – Bhupendra Singh arrives at a fuel tank inside the Harley-Davidson showroom. A line of motorcycles gleaming in the afternoon sun; One is metallic red, another is black matte finish and slightly longer variants in blue.

The motorcycles were not for sale, but for repair. The front door of the dealership was closed. Harley-Davidson, a proud US company, is leaving India after more than a decade of chasing a huge but ultimately dismal place to trade due to weak sales.

The representative of the service Mr. Singh said, “It is all over now.” “There are no bikes to sell now.”

The shutdown has rattled India’s ambitions to woo manufacturers, a model called “Make in India” on China’s success. This set back Harley-Davidson’s efforts to expand its popularity overseas. And it strangles a small but dedicated group of Harley devotees who are wondering how they will stop their precious ride.

“It’s like losing someone in your family,” said Sandeep Bhardwaj, the chief executive of a bus construction firm, who spent more than $ 40,000 on his Fat Boy motorcycle. “We had a mental assurance that they were physically present and that they could help us with spare parts.”

The companies looking for the next boom are long-term India, a country of 1.3 billion people with an aspirational middle class. However, it is difficult to set up shop there. Roads and rail are inadequate in many areas. Land Policies Flumox Construction. India’s red tape is infamous.

With his “Make in India” campaign, Prime Minister Narendra Modi vowed to take other steps to reduce bureaucratic hurdles, invest in infrastructure and attract high-level manufacturing jobs and design functions.

Even before the epidemic, the campaign had been disappointing. Manufacturing Contributes less to India’s economic output than a decade ago. The government has struggled to create an ecosystem for manufacturers, including infrastructure and industrial parks. Small suppliers who can help supply chains to a large manufacturer find it difficult to get credit.

“Harley came to your market for production,” said CP Chandrasekhar, an economist and former professor at New Delhi’s Jawaharlal Nehru University. “If they are not happy, they will just get up and leave.”

A spokesperson of the Ministry of Commerce in New Delhi said that the government was trying to reduce red tape for companies.

Despite the difficulties, any foreign manufacturer interested in India will have to find out how to set up shop here. The country has some barriers to trade between the world’s big countries. President Trump has repeatedly Cited higher duties Harley-Davidson on bikes in its trade talks with New Delhi.

India reduced tariffs on Harley motorcycles from 75 percent to 50 percent in 2018. Nevertheless, the government levies an additional 31 percent tax on two-wheelers, One of the highest in the world.

Harley-Davidson decided to keep the bike together inside the country. The Milwaukee-based company sent knockdown kits – parts packages to be assembled – to low-power models such as the Street 750 at its factory outside New Delhi. Signature, high-end motorcycles were still being shipped from the United States.

But after the initial boom, sales declined and India’s operations were impacted by the executive business. Harley-Davidson sold a total of 2,470 bikes in India in the 12 months ending in March, nearly half the number reached five years ago, according to the Society of Indian Automobile Manufacturers, a nonprofit representing automotive manufacturers.

The company’s motorcycle also remained out of reach of many people. The Harley’s top model in Delhi is over $ 88,000 after taxes and license fees. This is 41 times the average annual income of India, According to the World Bank.

People in India prefer highly affordable, light bikes that are easy to maneuver along the stony, traffic-driven roads of the country. Hero MotoCorp’s most expensive bike maker, the country’s largest motorcycle and scooter, costs around $ 1,500.

Harley-Davidson’s steps in India are part of a broader restructuring. The average customer of Harley is growing rapidly. Its sales have stabilized and profits have declined.

Under Jochen Zeitz, its new chairman and chief executive, the company is downsizing dealerships, limiting production to a handful of models and offering discounts to portray bikes as an exclusive luxury item .

“It’s always a difficult proposition because customers can turn it down,” said Stephen Brown, Chicago’s senior director of credit rating agency Fitch Ratings. “It’s a delicate balance they are running now.”

The name Harley will not disappear entirely from India. company What was said Last month it signed a deal to “sell and service” its motorcycles through Hero, a local company, stating that the motorcycles would also be “developed and sold” under the Harley brand. With the closure of its own factory, the fate of the Street 750, Harley’s most popular bike in India, is unclear. Harley is also laying off about 70 workers.

Harley enthusiasts of India are wondering what this means.

In 2014, Gaurav Gulati, a Harley rider, was wooed by the company’s managing director to open a dealership in New Delhi in India.

Mr. Gulati wanted to go big. He scoured the city for a perfect location and settled on an abandoned warehouse that would turn into a cafe, a workshop, garage, lockers and even a chic Harley store with showers for riders. By the time his outlet opened two years later, two company bosses had come and gone in India.

Mr. Gulati is one of 33 dealers who said they invested about $ 27 million in their dealerships, some of which expanded as recently as February. He is sitting on an investment of $ 1.2 million, which he made partly from his savings and partly after borrowing from banks. He is still paying about $ 20,000 in monthly rent.

He said that neither Harley nor its new India partner Hero MotoCorp have approached Mr. Gulati to continue the period of their dealership. Their dealership agreement expires at the end of the year.

“I’m devastated,” Mr. Gulati said, staring at the outer wall of his shop, which he had decorated with red old-style bricks and frescoes. “It’s a mental torture. Where did I put my trust and confidence? What am I going to do? “

Despite all this, some hardcore Harley fans in India are not giving up.

On a recent morning, Pritam Thakur, a real-estate developer, and other riders of his Harley club took his bike for a weekend ride. They rode in full gear, wearing American flagged bandannas, dog tags and custom-made jackets with their initials.

“It’s not about the machine,” said Mr. Thakur, who bought the popular Street 750 model in 2014. “It is the entire community that makes it special.”

Four years ago, Shri Thakur embarked on a journey of more than 1,700 miles from the northernmost corner of India to its southernmost, Kanyakumari in Kashmir.

In the midst of that ride, he ran away with cash after Mr. Modi’s announcement Sudden ban on high value Indian banknotes, Part of a national effort to get more Indians to seal corruption and use digital currency. A fellow Harley rider flew from Mumbai to the southern city of Chennai to pay him cash.

Mr. Kapoor said it was brilliant, “a feeling you cannot describe in words”.

It is not clear whether he can continue with his passion. Indian riders and dealers will have to find sources for important machinery: batteries, accelerator cables, silencers.

Mr. Thakur said, “There is no jugaad in this matter,” the Indian way of finding cheap solutions to big problems.

“Should have been here,” said Harley.

Vindu Goyal contributed reporting.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *