Harley-Davidson Exits India Due to Poor Sales: Back in August this year, Harley-Davidson indicated that they will soon be exiting few of the loss-making international markets to focus on the US market. In one of the latest updates, the brand has officially announced today that it will shut down manufacturing and sales operations in India as a part of its 'Rewire' restructuring programme.
It was already a very tough phase for Harley-Davidson due to poor sales in the Indian markets and COVID-19 pandemic situation made the things even worse, which has eventually forced the brand to exit India. Harley was able to sell only 2500 motorcycles in India in the last financial year, making our country as one of the worst-performing international markets.
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It's Official: Harley-Davidson Exits India Due to Poor Sales[/caption]
Harley-Davidson India has decided to shut down its manufacturing plant located in Bawal, Haryana. It is being reported that around 70 of Harley-Davidson’s employees will be laid off as a result. In a statement to the United States Securities and Exchange Commission, Harley-Davidson outlined the development, adding some details about the restructuring costs.
"As a result of the actions approved from August 6, 2020, through September 23, 2020, the Company expects to incur restructuring expenses of approximately $75 million in 2020, of which approximately 80% are expected to be cash expenditures, including one-time termination benefits of approximately $3 million, non-current asset adjustments of approximately $5 million, and contract termination and other costs of approximately $67 million. 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 September 23, 2020, of approximately $169 million in 2020. The Company expects to complete the restructuring activities approved through September 23, 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," the company said.
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It's Official: Harley-Davidson Exits India Due to Poor Sales[/caption]
Harley-Davidson India has responded with a press statement stating that the brand is "evaluating new options" to continue to serve its customers in the Indian markets. As of now, the company has not made any official announcement on how it will support its existing customer base in India. The brand has only stated that the dealer network in India will continue to serve customers through the contract term. At present, Harley-Davidson has 33 showrooms across India, and each dealership would be having a different contract term.
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