As per the recent announcement made by the American bike maker, Harley-Davidson exits India and ends its operations in the Indian market as a part of the new restructuring scheme which is expected to cost the brand close to $75 million. As a part of the restructuring scheme, which is referred to as The Rewire, the brand is optimizing its global dealer network, exiting certain international markets, and also discontinuing its sales and manufacturing operations in India.
The decision to exit India comes after the long approval of various commitments between 6 August 2020 and 23 September 2020. It is worth noting the fact that the brand unveiled a new strategy bout two months ago Under this strategy, the brand will be shifting its focus back to more profitable motorcycles and core markets such as the United States. The brand has also announced early this year that it plans to reduce its product portfolio and exit lower volume markets. As per the company's plan, the restructuring activities will be completed within the next 12 months.
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As per the reports, out of the $75 million restructuring expenses that Harley-Davidson expects to incur, about 80% of it will be cash expenditures which include one-time termination benefits of around $3 million, non-current asset adjustments of $5 million, and contract termination and other costs of approximately $67 million. In addition to this, the company expects total restructuring costs of about $169 million in 2020 which also includes a workforce reduction of about 70 employees in India. The total annual sales in India accounts for less than 5% of the company's total sales across the globe.
As per the experts, the strategy announcement comes after Harley-Davidson reported an unexpected quarterly loss due to disruptions caused by the coronavirus pandemic. The brand had reported a loss of 60 cents per share for the quarter through June. The brand's highest sales figures come from the United States and it will now focus primarily on its bigger markets after exiting loss-making markets such as India.
With this being said, what do you think has lead to the exit of the Harley-Davidson brand from the Indian soil? Do let us know in the comments box below. Also, subscribe to our Youtube Channel for more such updates and unbiased reviews.
