Since its entry in the market in 2011, Harley-Davidson has only sold 25,000 units.
There are now 33 Harley-Davidson dealerships across the Indian sub-continent with the report saying each will have different contract terms although there was no clear indication of how existing Harley-Davidson customer would be supported in terms of service and spares.
The Milwaukee-based company refers "The Rewire" as a term to describe restructuring actions related to employees and other services. It is speculated the India market will be supported by Harley-Davidson's plant in Thailand but there is no concrete information thus far.
Over the past few months, Harley-Davidson has been announcing multiple cost-saving measures as part of its new Rewire business strategy.
"As part of The Rewire, an overhaul of its operating model and market structure, the company is changing its business model in India and evaluating options to continue to serve its customers", it noted.
The bike maker, which sold 13 models in India with a starting price of ₹4.69 lakh, now has 33 dealerships in the country. The company has also retrenched about 500 positions globally.
Discussions are also ongoing to let Hero become a contract manufacturer for at least one Harley motorcycle with 300-600 cc engine capacity, which it will launch later, the first source added.
If Hero Moto Corp will benefit from this deal would come to light over time
High import tariffs on Harley have also been a flashpoint in India's trade negotiations with the US.
In a filing with the U.S. Securities & Exchange Commission, Harley said, "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".
Harley has an assembly plant at Bawal in Haryana, where it assembles completely knocked-down (CKD) motorcycles for local sales.
"The India action will include an associated workforce reduction of approximately 70 employees", the company said in a regulatory document filed in the US.
Including previously disclosed restructuring charges, the company expects total restructuring expenses associated with Rewire restructuring actions approved through September 23, 2020, of approximately Dollars 169 million in 2020, the filing said.
He added that even as Harley-Davidson stuck with selling cruiser bikes, rivals such as BMW, KTM, Yamaha and others came out with bikes that were lighter and more technologically advanced, catering to multiple categories.
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