Harley Davidson ends India operations, 70 employees to be laid off

Harley Davidson has decided to shut down its manufacturing and sales operations in India as part of its 'The Rewire' programme. The company will lay off its 70 employees in the country and close its manufacturing plant in Bawal, Haryana.

Last month, the US-based motorcycle maker had decided to focus on its top 50 markets across the world under this restructuring strategy. India has been a dismal venture for the globally renowned two-wheeler company as it sold less than 30,000 units in the country over the past 10 years. In the last financial year, the company managed to sell only 2,500 units, making India one of its worst performing markets. Amid the pandemic this year, the company could sell only 100 motorcycles between April-June.

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With its exit, Harley Davidson has joined the list of auto manufacturers that have closed shop in India in the past three years, including General Motors, Ssangyong, Fiat, UM Motorcycles and others. The company is expected to provide road servicing facilities to its existing customers along with selling imported bikes in the country.

In a filing to the United States Securities and Exchange Commission (SEC), Harley Davidson said it intends to optimise its global dealer network, exit certain international markets, and discontinue its sales and manufacturing operations in India. These restructuring actions under 'The Rewire' are likely to result in $75 million additional restructuring costs for 2020. Of this, 80 per cent is 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, the company stated in its filing.

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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 September 23, 2020 of approximately $169 million in 2020," Harley Davidson told the SEC.

It further added that these restructuring activities are expected to complete within the next 12 months.

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