/Harley Davidson to Leave India After Poor Sales

Harley Davidson to Leave India After Poor Sales

NEW DELHI — Bhupender Singh crouched over a gas tank inside a Harley-Davidson showroom. A row of bikes gleamed within the afternoon solar; one metallic pink, one other with a black matte end and a barely taller variant in blue.

The bikes weren’t on the market, however for restore. The dealership’s entrance door was locked. Harley-Davidson, the proudly American firm, is giving up on India due to weak gross sales, after greater than a decade of pursuing an enormous however in the end irritating place to do enterprise.

“It’s all over now,” stated Mr. Singh, a service consultant. “There are no bikes to sell anymore.”

The closure has dealt a blow to India’s ambitions to lure producers, a marketing campaign modeled on China’s success known as “Make in India.” It has set again Harley-Davidson’s efforts to develop its reputation abroad. And it strands a small however devoted group of Harley devotees who’re questioning how they’ll preserve their prized rides rumbling.

“It’s like losing someone in your family,” stated Sandeep Bharadwaj, the chief government of a bus manufacturing agency, who spent greater than $40,000 on his Fat Boy bike. “We had a mental assurance that they were physically present and they could help us with spare parts.”

Companies on the lookout for the following growth have lengthy eyed India, a rustic of 1.three billion folks with an aspirational center class. Setting up store there, nonetheless, stays troublesome. Roads and rails are insufficient in lots of areas. Land insurance policies flummox development. India’s pink tape is notorious.

With his “Make in India” marketing campaign, Prime Minister Narendra Modi vowed to scale back bureaucratic hurdles, put money into infrastructure and take different steps to draw high-end manufacturing jobs and design work.

Even earlier than the pandemic, the marketing campaign had been disappointing. Manufacturing contributes less to India’s economic output than it did a decade ago. The government has struggled to build an ecosystem for manufacturers, including infrastructure and industrial parks. Small suppliers who might help a big manufacturer flesh out a supply chain have a hard time getting credit.

“Harley came to produce for your market,” said C.P. Chandrasekhar, an economist and former professor at the Jawaharlal Nehru University in New Delhi. “If they’re not happy, they’ll just get up and leave.”

But sales dropped after an initial surge, and the India operation suffered from executive turnover. Harley-Davidson sold a total of 2,470 bikes in India in the 12 months that ended in March, almost half the number it reached five years ago, according to the Society of Indian Automobile Manufacturers, a nonprofit representing automotive manufacturers.

“That’s always a tricky proposition because customers can get turned off,” said Stephen Brown, a Chicago-based senior director at Fitch Ratings, a credit ratings agency. “It’s a delicate balance that they’re walking right now.”

Mr. Gulati is one of 33 dealers who said they invested nearly $27 million in their dealerships, with some expanding as recently as February. He is sitting on a $1.2 million investment, which he made partly from his own savings and partly after borrowing from banks. He is still paying about $20,000 in monthly rent.

Neither Harley nor its new India partner, Hero MotoCorp, have approached Mr. Gulati to continue the term for his dealership, he said. His dealership agreement expires at the end of the year.

“I am devastated,” said Mr. Gulati, as he gazed at the outer wall of his store, which he decorated with red old-style bricks and graffiti. “It’s a mental torture. Where did I put my trust and faith? What am I going to do?”

Despite all of this, some of Harley’s die-hard fans in India are not giving up.

On a recent morning, Preetam Thakoor, a real-estate developer, and other riders from his Harley club took their bikes for a weekend ride. They rode in full gear, wearing American flag bandannas, dog tags and custom-made jackets emblazoned with their initials.

Vindu Goel contributed reporting.

Source link Nytimes.com

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