Key Points :
- President Trump has often expressed his concerns on the issue of “high” import duty that Harley bikes faced in India (he called it “unfair”), even taking it up with Prime Minister Narendra Modi.
- Harley is not the only company to have exited India. Apart from it, General Motors ,MAN Trucks have also bid adieu to the Indian Market and Ford has also quit solo operations and has joined hands with Mahindra & Mahindra.
- Harley’s departure comes at a time when the Indian economy and the auto industry are passing through one of their toughest periods ever as slowdown due to the pandemic and poor consumer demand have had a downward spiral effect on sales to historic lows.
American cult bikemaker Harley-Davidson, often used by US President Donald Trump in trade diplomacy with India, is shutting down its only factory in India on below-par business as it takes a hard call to exit markets where the sales have continued to remain weak and uncertain.
Harley’s departure comes at a time when the Indian economy and the auto industry are passing through one of their toughest periods ever as slowdown due to the pandemic and poor consumer demand have had a downward spiral effect on sales to historic lows. Also, companies have complained of high duty and tax structure on the automobile industry and those voicing concerned include Maruti Suzuki, Mahindra & Mahindra, Toyota, Hero Moto, Bajaj Auto, and TVS.
Harley is not the only company to have exited India. Apart from it, General Motors ,MAN Trucks have also bid adieu to the Indian Market and Ford has also quit solo operations and has joined hands with Mahindra & Mahindra. However, talks are there which indicate Harley, is close to striking a partnership with a homegrown brand, most likely to be Hero MotoCorp of Pawan Munjal. While refraining to provide details about its future plans, the company said it is “changing its business model” in India and “evaluating options” to continue to serve its customers.
“Harley-Davidson plans to close its manufacturing facility in Bawal and significantly reduce the size of its sales office in Gurgaon. The company is communicating with its customers in India and will keep them updated on future support,” the company said in a statement.
“The Harley-Davidson dealer network will continue to serve customers through the contract term.”
President Trump has often expressed his concerns on the issue of “high” import duty that Harley bikes faced in India (he called it “unfair”), even taking it up with Prime Minister Narendra Modi. Trump’s discontent had led the Centre to reduce the duty on Harley motorcycles from 100% to 50%, though the US government still remained unsatisfied. Harley’s problems, however, were more than just detrimental duty structure. In a price-sensitive market, the company was unsuccessfully to bring pocket friendly models where its lowest powered on sale in India is the Street 750cc, priced at Rs 4.7 lakh ex-showroom in line with the demand of the broader market, despite doing local assembly at Bawal. Its India product portfolio was a mix of locally assembled models through imported packages , apart from imported bikes.
Harley’s exit in India may be a spoilsport for India’s trade discussions with the US, as the latter may continue to blame the import duty structure.It is believed that Mahindra & Mahindra and Bajaj Auto also had conversations with Harley, though the company is preferring Hero Moto.
On the questions of a partnership with Harley, Hero chairman Pawan Munjal had told TOI earlier,
“If they want to (enter into a partnership), then why not? Sure… I am open to the right kind of match… The sooner it happens, it’s good for everyone.”
