Harley-Davidson bids adieu to India

by Ali Nasir

Lahore: U.S. motorcycle-maker Harley-Davidson says it is discontinuing its sales and manufacturing operations in India, giving another major setback to Prime Minister Narendra Modi’s efforts to lure or retain foreign manufacturers in the midst of the country’s worst economic downturn in decades.

The company is taking the step as part of broader additional cutbacks announced to employees on September 24. Harley said it will dismiss another roughly 70 employees as part of its exit from the country and that its latest moves will bolster restructuring expenses this year to nearly $169 million.

The motorcycle manufacturer’s decision comes weeks after Toyota Motor Corporation said it won’t expand further in India because of the country’s high tax regime.

General Motors Company also backed off its operations from the country in 2017 while Ford Motor Company agreed last year to move most of its assets into a joint venture with Mahindra & Mahindra Limited after struggling for over two decades to get traction in the market. U.S. President Donald Trump has often complained about India’s high tariffs, especially mentioning the levies imposed on the Harley bikes.

Bharatiya Janata Party-ruled Modi government has been trying to reverse the trend with a plan to offer $23 billion of inducements to attract companies to set up manufacturing, including production-linked breaks for automakers.

The program is being headed by the country’s policy planning body and is similar to a scheme executed earlier in 2020 which was aimed at drawing businesses away from China.

Harley recorded its first quarterly loss in over a decade for the three months ended in June and has been cutting hundreds of jobs under Jochen Zeitz, who took charge as chief executive officer in May.

The former CEO has narrowed the company’s focus to core markets and model segments, scaled back ambitions for extension overseas and starved dealers of new bikes to shrink inventory and ameliorate pricing.

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