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NEW DELHI – Bhupender Singh crouches over a fuel tank in a Harley-Davidson showroom. A row of motorcycles glistened in the afternoon sun; one metallic red, another with a matte black finish and a slightly taller variant in blue.
The motorcycles were not for sale, they were to be repaired. The front door of the dealership was locked. Harley-Davidson, the proudly American company, is abandoning India due to weak sales, after more than a decade of searching for a huge but ultimately frustrating place to do business.
“It’s all over now,” said Singh, a service representative. “There are no more bikes to sell.”
The shutdown was a blow to India’s ambitions to attract manufacturers, a campaign inspired by China’s success and titled “Make in India”. He delayed Harley-Davidson’s efforts to increase its popularity overseas. And that fails a small group of Harley enthusiasts who wonder how they’ll continue to rumble their prized rides.
“It’s like losing someone in your family,” said Sandeep Bharadwaj, the general manager of a bus manufacturing company, who spent more than $ 40,000 on his Fat Boy motorcycle. “We had the mental certainty that they were physically present and that they could help us with spare parts.”
Businesses in search of the next boom have long looked to India, a country of 1.3 billion people with an ambitious middle class. But settling there remains difficult. Roads and rails are inadequate in many areas. Land policies flummox construction. Indian paperwork is infamous.
With his “Make in India” campaign, Prime Minister Narendra Modi has pledged to reduce bureaucratic hurdles, invest in infrastructure and take other steps to attract high-end manufacturing jobs and design work.
Even before the pandemic, the campaign had been disappointing. The manufacturing sector contributes less to India’s economic output than it did ten years ago. The government has struggled to build an ecosystem for manufacturers, including infrastructure and industrial parks. Small suppliers who could help a large manufacturer expand a supply chain are struggling to get credit.
“Harley has come to produce for your market,” said CP Chandrashekhar, economist and former professor at Jawaharlal Nehru University in New Delhi. “If they’re not satisfied, they’ll just get up and go.”
A spokesperson for the Commerce Ministry in New Delhi said the government was trying to cut red tape for businesses.
Despite the difficulties, any foreign manufacturer interested in India should consider relocating there. The country has some of the most significant trade barriers among the major nations of the world. President Trump has repeatedly cited the high tariffs imposed on Harley-Davidson motorcycles in his trade negotiations with New Delhi.
India cut tariffs on Harley motorcycles from 75% to 50% in 2018. Yet the government imposes an additional 31% tax on two-wheelers, one of the highest in the world.
Harley-Davidson decided to ride motorcycles in the interior of the country. The Milwaukee-based company has sent disassembly kits – packets of parts to assemble – for low-powered models, like the Street 750, to its factory outside New Delhi. Iconic high-end motorcycles were always shipped from the United States.
But sales plummeted after an initial surge, and the India operation suffered from executive turnover. Harley-Davidson has sold a total of 2,470 motorcycles in India in the 12 months ending in March, nearly half of the number reached five years ago, according to the Society of Indian Automobile Manufacturers, a charity organization. nonprofit representing car manufacturers.
The company’s motorcycles have also remained out of reach for many. Harley’s top-of-the-line model exceeds $ 88,000 in Delhi after taxes and license fees. This is 41 times the average annual income of India, according to the World Bank.
Indians overwhelmingly prefer cheaper, lighter, and maneuverable bikes along the country’s busy roads. The most expensive bike from Hero MotoCorp, one of the nation’s largest motorcycle and scooter makers, costs around $ 1,500.
Harley-Davidson’s movements in India are part of a larger restructuring. The average Harley customer ages quickly. Its sales have stagnated and its profitability has declined.
Under the leadership of Jochen Zeitz, its new president and CEO, the company is downsizing dealerships, restricting production to a handful of models, and removing discounts to present bikes as an exclusive luxury item.
“It’s always a tricky proposition because clients can be turned off,” said Stephen Brown, Chicago-based senior director at Fitch Ratings, a credit rating agency. “It’s a delicate balance that they are walking right now.”
The name Harley will not disappear entirely from India. The company said last month that it had reached a deal to “sell and service” its motorcycles through Hero, the 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 motorcycle in India, is unclear. Harley is also laying off around 70 workers.
Harley fans in India are wondering what this means to them.
In 2014, Gaurav Gulati, a longtime Harley rider, was prompted by the managing director of the company in India to open a dealership in New Delhi.
Mr. Gulati wanted to go big. He scoured the city to find a great spot and set up shop in an abandoned warehouse that he would turn into a posh Harley store with a cafe, workshop, garage, lockers, and even a rider shower. By the time his outlet opened two years later, two of the company’s bosses in India had come and gone.
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’s sitting on a $ 1.2 million investment, which he made partly with his own savings and partly after borrowing from the banks. He still pays around $ 20,000 in monthly rent.
Neither Harley nor his new Indian partner, Hero MotoCorp, have contacted Mr. Gulati to continue his dealership’s tenure, he said. Its concession contract expires at the end of the year.
“I am devastated,” said Mr. Gulati, looking at the exterior wall of his store, which he decorated with old-fashioned red bricks and graffiti. “It’s mental torture. Where did I put my trust and faith? What am I going to do?”
Despite all of this, some of the die-hard Harley fans in India aren’t giving up.
One recent morning, Preetam Thakoor, a real estate developer, and other riders from his Harley club took their bikes for a weekend. They rode in full gear, wearing American flag bandanas, name tags and tailored jackets with their initials on them.
“It’s not about the machine,” said Thakoor, who bought the popular Street 750 model in 2014. “It’s the whole community, the bond that makes it special.”
Four years ago, Mr. Thakoor traveled from India’s most northerly corner in Kashmir to its southern tip, Kanyakumari, a journey of over 1,700 miles.
In the middle of that race, he ran out of money after Mr. Modi announced a sudden ban on high-value Indian banknotes, as part of a nationwide effort to root out corruption and instigate more money. Indians to use digital currency. Another Harley rider came down from Mumbai to Chennai in the south of the country to deliver money to him.
This camaraderie, is “a feeling you can’t describe in words,” Mr. Thakoor said.
It is not clear if he can continue with his passion. Indian riders and dealers will need to find sources for crucial machinery: batteries, throttle cables, mufflers.
“There is no jugaad in this case,” Thakoor said, referring to the Indian way of finding inexpensive solutions to big problems.
Harley, he said, “should have been here.”
Vindu Goel contributed reporting.
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