Harley-Davidson is retreating from India, calling time on a decade-long attempt to break into the world’s biggest motorcycle market.
The company said in a statement on Thursday that it will close its Bawal factory in northern India and “significantly reduce” the size of its sales office in Gurgaon, near Delhi. Dealers will serve customers through the end of their contracts and the company is exploring ways to continue to sell its iconic motorbikes in the country.
India is the world’s biggest market for motorcycles and scooters, with more than 17 million sold last year, according to the Society of Indian Automobile Manufacturers. Two-wheelers are by far the most popular means of transport in the country, which was also until recently one of the fastest growing markets for cars.
When Harley-Davidson (HOG) entered India in 2010, it was the second-fastest growing two-wheeler market in the world behind China. But its 33 dealers have collectively sold just 25,000 motorcycles since then, according to the company. Its business has struggled with high import duties and sales taxes, which have been repeatedly criticized by President Donald Trump.
News of the company’s retreat will come as a blow to Prime Minister Narendra Modi’s hopes of attracting more foreign investment and broadening India’s manufacturing base. Ford (F) and General Motors have both cut back operations in India in recent years.
The withdrawal is part of an overhaul that Harley-Davidson (HOG) unveiled in July, which will see it streamline models and focus its energy on North America, Europe and parts of Asia Pacific. “A total rewire is necessary to make Harley-Davidson (HOG) a high-performance company,” CEO Jochen Zeitz said in a statement at the time. The company was battling a slump in sales even before the coronavirus pandemic hit, which has further dented demand for luxury goods.
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 “speculation.”