Motorcycle Giant Harley Davidson is Closing its India Factory

American motorcycle manufacturer Harley Davidson announced recently that it would be retreating from India after trying for a decade to break into the market in the country.

Harley Davidson released a statement saying it would close its Bawal factory in northern India and that it would “significantly reduce” the size of its sales office in Gurgaon, near Delhi.

Dealers will continue to serve customers through the end of their contracts.

The company is still looking to find ways to sell its motorbikes in the country which represents the world’s biggest market for motorcycles and scooters. According to the Society of Indian Automobile Manufacturers, India had sold over 17 million in 2019.

According to Reuters, Harley-Davidson is in talks with Hero MotoCorp, India’s largest two-wheeler manufacturer, about a possible distribution deal in the country. Harley-Davidson declined to comment on this.

A LiveMint article has revealed that as many as three Harley dealers confirmed that they were informed by the company that their current contracts will not be renewed and their future ties with the automaker will be decided by the new distributor.

“Once a national distributor is appointed and the company officially pulls out of India, it would be at the discretion of the distributor to decide the terms and conditions with the existing dealer partners,” said one of the three.

“Harley-Davidson dealers are apprehensive that the new distributor may not want to continue with 33 dealerships in India and, as a result, few of us may have to shut shop,” the second said.

“There are more than 1,700 Harley owners in Pune alone,” said the first person. “The company has told us to honour all customer contracts, including insurance, finance and extended warranty,” he said. The company assured that business operations will continue but may be scaled down in response to muted demand.

“We understand that motorcycles will be imported directly from Thailand and Harley’s office in Singapore will conduct the whole process. The arrangement will be similar to what Ducati has in India. However, we weren’t informed in all these months that the company is looking to shut shop in India. Hopefully, not all dealerships will close down,” the second person added.

Harley Davidson had entered the country in 2010 when India was the second-fastest growing two-wheeler market in the world after China. Unfortunate since then, 33 dealers have collectively sold only 25,000 motorcycles.

It was this past July that the company announced that it would streamline models and focus its energy on North America, Europe and parts of Asia Pacific.

“A total rewire is necessary to make Harley-Davidson a high-performance company,” CEO Jochen Zeitz said at the time.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.