InvestorQ : Why is Harley Davidson exiting from Indian markets and what does it mean? Will the deal help Hero Moto?
Katherine Gonsalves made post

Why is Harley Davidson exiting from Indian markets and what does it mean? Will the deal help Hero Moto?

Answer
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rhea Babu answered.
4 weeks ago


Harley-Davidson decided to discontinue sales and manufacturing operations in India with immediate effect as part of its company-wide restructuring plan. The 5-year strategy intends to reset its business and focus on high-priority markets only.

Ironically, this exit by the iconic motorcycle makers comes at a time when Prime Minister Modi is pushing his “Make in India” program. Auto sector has been identified by the government as a key segment with FDI potential of $23 billion.

In India, Harley Davidson operates a “complete knock-down” or CDK assembly plant where components and parts are imported from the US and assembled into motorcycles for the local market. However, even before the pandemic, the sales have been quit tepid.

Harley Davidson’s big problem was the price point. At an average price of Rs.11 lakhs per bike, they were way above the average of Rs.50,000 per bike in normal Indian conditions. Harley may opt to move out of India and tie up with Hero Moto for distribution in India.

One area where India lost out is that it hardly offers any special incentives for bike manufacturers. In contrast, Thailand has several production-linked incentives, along with significant R&D benefits; apart from low corporate tax rates.