Hardly in India: Harley-Davidson rides out to 'rewire,' focus on Europe, US

Iconic US motorcycle manufacturer Harley-Davidson has announced that it will shut its India business as it restructures global operations at an additional cost of $75 million under its ‘The Rewire’ strategy formulated by new CEO Jochen Zeitz to revive the business hit by a slump in sales in many of its markets in the world.

Between August 6 and September 23, “the company approved commitments to additional restructuring actions under ‘The Rewire’ related to optimising its global dealer network, exiting certain international markets, and discontinuing its sales and manufacturing operations in India,” the company said in a filing to the Securities and Exchange Commission in the US. “The India action will include an associated workforce reduction of approximately 70 employees,” it said.

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The company’s decision to end India business is part of its plans to focus on 50 of its most profitable markets including the US and Europe.

With the additional $75 million to be spent on restructuring, the company expects its total expenses associated with the ‘Rewire’ actions approved till September 23 to be about $169 million in 2020.

It said about 80% of the $75 million will be cash expenditures, including one-time termination benefits of about $3 million, non-current asset adjustments of about $5 million, and contract termination and other costs of about $67 million.

Harley-Davidson said the restructuring activities approved through September 23 will be completed in the next 12 months. There could be additional actions “some of which will likely result in additional restructuring charges”, it said.

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The company started its India operations in August 2009. It opened its first Indian dealership in July 2010. The company had already scaled down operations at its 

Bawal assembly unit in Haryana and laid off workers due to the crisis caused by COVID-19. 

It sold less than 2,500 units in India in the last financial year and could sell only about 100 bikes in the first quarter of the current financial year. In FY19, the company had sold only about 1,500 units, although it led in exports with over 5,000 units. It sold about 2,000 units in FY18.