Harley-Davidson exits India amid warning ‘Rewire’ restructuring costs to rise

Harley-Davidson announces it is quitting India after 10 years struggling to gain a foothold in the world's larget motorcycle market

Harley-Davidson Road Glide

Harley-Davidson has officially confirmed it will exit the Indian motorcycle market after only 10 years in the latest sweeping change to be made at the ailing firm.

The storied American company is currently in the midst of a major restructuring programme - named as The Rewire, in a nod to its LiveWire electric offering - after posting a continuous trend of dwindling sales and profits in the United States and even more noticeably in overseas markets.

Now, after weeks of rumours, Harley-Davidson has announced it will cease both production and sales of its models in India, where it has struggled to gain a foothold despite it being the largest motorcycling market globally with 17 million unit sales per year.

Harley-Davidson LiveWire (2020) Review | Visordown.com

While the challenges that faced Harley-Davidson are not uncommon among international brands in India, where they have to compete with established local brands that can offer machinery at much lower prices, the exit after just 10 years is still an indication of the drastic measures Harley-Davidson is having to take to balance its books.

The move isn’t a cheap one either with Reuters reporting $75 million in restructuring costs will be incurred, including the closure of its Bawl plant. It will retain a scaled-down sales office in Guragaon, south of New Delhi.

Short term pain, long term gain for Harley-Davidson?

In all, the Rewire is expected to cost the company in the region of $169 million, but there are warnings now that this is set to rise by the time it has completed the overhaul.

The issues facing arguably the world’s most iconic motorcycling - and American - brands has become a worryingly prolong tale of woe.

Harley-Davidson hasn’t posted a sales growth in 14 quarters as efforts to forge into new sectors with models like the LiveWire were met with a lukewarm response. 

As such Jochen Zeitz took over as CEO in July and promptly announced the Rewire strategy, which revealed the model range will be cut by 30% and greater focus placed on its core cruiser business despite concerns its primary ‘boomer’ generation will only be able to take it so far.

While the Indian exit is the first major change to be confirmed since, it had also been revealed the planned Bronx streetfighter has been delayed (most likely axed in its current form). However, plans for the Pan-America adventure bike using the same engine remains on course, while spy shots of the Harley-Davidson 338R budget motorcycle suggest it too is heading for an Asia-only market.

Harley-Davidson’s fortunes haven’t been helped by the impulsive actions of Donald Trump. The US president has been a staunch supporter of American manufacturing and regularly singled out Harley-Davidson as he swept into power.

However, soon Harley-Davidson became an unwitting pawn in its escalating trade war with China, resulting in the price of its motorcycles to soar overnight in Asia and Europe.

As such, when Harley-Davidson attempted to circumnavigate this by upping production in Thailand, Trump criticised it publicly for turning its back on the US.