Harley-Davidson bids adieu to the Indian motorcycle market

Harley-Davidson has finalised to shut down its sales and manufacturing operations in India. The American motorcycle giant has decided to bid adieu to one of the world’s largest motorcycle markets under 'The Rewire' strategy outlined by the company’s newly appointed Chairman and CEO, Jochen Zeitz.

It is not a hidden fact that Harley-Davidson has been facing serious issues selling its motorcycles, especially in the international markets, India being one of them. The company entered our country back in 2009 and celebrated its 10th anniversary earlier this year. However, its products haven’t been able to return the desired sales figures lately. For example, in the previous fiscal, Harley-Davidson sold less than 2,500 units in India. The constant declining sales chart could be one of the reasons that led the company to exit the domestic market.

With Harley-Davidson putting a full stop to its sales and manufacturing operations in the country and reducing its entire workforce to just 70 employees, its customers will certainly be worried about procuring spare parts and getting their motorcycles serviced. The Indian arm of the American company has said that it is currently evaluating options to continue to serve its Indian customers.

Harley-Davidson has a total of 33 dealerships across the country and all of them are expected to continue operating under individual contract terms. While this should bring some relief to the existing customers for the time being, but the scenario once the contract terms of the dealerships expires would not be pleasant.

Following is an official statement given by Harley-Davidson to the United States Securities and Exchange Commission outlining the development under ‘The Rewire' strategy and adding some details about the restructuring costs.

As a result of the actions approved from 6 August 2020 through 23 September 2020, the company expects to incur restructuring expenses of approximately USD 75 million in 2020, of which approximately 80% are expected to be cash expenditures, including one-time termination benefits of approximately USD 3 million, non-current asset adjustments of approximately USD 5 million, and contract termination and other costs of approximately USD 67 million.

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Full implementation of these Rewire actions may require the company to commit additional funds for additional contract termination and other costs. Including previously disclosed restructuring charges, the company expects total restructuring expenses associated with Rewire restructuring actions approved through 23 September 2020 of approximately USD 169 million in 2020. The company expects to complete the restructuring activities approved through 23 September 2020 within the next 12 months. Announcements associated with additional actions under The Rewire are expected to occur, some of which will likely result in additional restructuring charges.

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