The closure has dealt a blow to India’s ambitions to lure manufacturers, a campaign modeled on China’s success called “Make in India.” It has set back Harley-Davidson’s efforts to expand its popularity overseas. And it strands a small but devoted group of Harley devotees who are wondering how they will keep their prized rides rumbling.
“It’s like losing someone in your family,” said Sandeep Bharadwaj, chief executive of a bus manufacturing firm, who spent more than $40,000 on his Fat Boy motorcycle. “We had a mental assurance that they were physically present and they could help us with spare parts.”
Any foreign manufacturer interested in India has to explore setting up shop here. The country has some of the steepest trade barriers among the world’s large nations. President Donald Trump has repeatedly cited the high duties on Harley-Davidson bikes in his trade negotiations with New Delhi.
India dropped the tariffs on Harley motorcycles from 75% to 50% in 2018. Still, the government charges an additional 31% tax on two-wheelers, one of the highest in the world.
Harley-Davidson decided to put bikes together inside the country.
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.
The company’s motorcycles also remained out of reach for many. Harley’s top model exceeds $88,000 in Delhi after taxes and licensing fees. That is 41 times India’s average yearly income, according to the World Bank.
Harley said last month that it struck a deal to “sell and service” its motorcycles through Hero MotoCorp, a local company, which it said would also “develop and sell” motorcycles under the Harley brand. With the closure of its own factory, the fate of the Street 750, Harley’s most-popular bike in India, is not clear. Harley is also laying off about 70 workers.