Managing Director of Harley-Davidson India Anoop Prakash (R)  leads a bike rally from  Nine Bridges Harley-Davidson during the inauguration of Harley Davidson's dealership in Ahmedabad on November 27, 2011. Around 26 owners of Harley-Davidson's participated in a bike rally to mark the occasion. Harley, which received 25 percent of revenue outside the United States in 2006, forecasts 40 percent of sales from international markets by 2014. More than half of Harley’s dealerships are outside the U.S. AFP PHOTO / Sam PANTHAKY (Photo credit should read SAM PANTHAKY/AFP via Getty Images)

Harley-Davidson exits India in blow to Modi’s foreign investment plans

US motorcycle manufacturer Harley-Davidson said on Thursday (24) it will exit its India operations, the latest foreign automaker to pull out of the South Asian nation.

Wisconsin-based Harley-Davidson will shut down its manufacturing plant in the northern Indian state of Haryana and significantly reduce its sales office, the company said in a statement.

The firm said the move “discontinuing its sales and manufacturing operations in India” was part of a global overhaul of its operating model and market structure.

Harley-Davidson — which opened a plant in the world’s largest motorcycle market in 2011 — struggled with India’s 100 percent import tariffs and cheaper local brand Hero MotoCorp as well as Honda Motorcycle, owned by Japan’s Honda Motor.

India, Asia’s third-largest economy, had also been experiencing slower consumer demand even before the crushing economic impact of the coronavirus pandemic.

US president Donald Trump had called India “tariff king” and complained of the country’s high-tariffs for imports of the iconic motorcycle.

India later slashed the tariffs by 50 per cent but the brand was unable to get traction in the notoriously challenging market.

The withdrawal from India is a blow to Indian prime minister Narendra Modi’s “Make in India” strategy, where he has urged foreign businesses to manufacture goods locally.

US auto giant Ford last year transferred its Indian assets to a joint venture with local behemoth Mahindra & Mahindra after failing to boost its low market share in the price-sensitive country.

In 2017, US automobile maker General Motors, unable to grow its negligible market share, said it would stop selling cars in India.

India’s automobile market is dominated by Suzuki, which controls over 50 percent of passenger vehicle sales with low-price cars for budget-conscious customers.

Automobile sales in the country, including two-wheelers and passenger vehicles rose for the first time in nine months in August.