Harley-Davidson Plans to Leave India Because of Poor Sales

Harley-Davidson sees sales drop after an initial surge and its India operation suffers from executive turnover.
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Iconic motorcycle company Harley-Davidson  (HOG) - Get Report reportedly plans to leave India, the world's largest market for two-wheelers, because on poor sales.

Shares of the Milwaukee-based company were down 1.54% to $33.78 in trading Thursday.

The New York Times reported that Harley-Davidson was pulling out of India after its bikes sold poorly in a country where incomes are low and manufacturing is challenging.

India is one of the world's largest motorbike and scooter markets but the bulk of sales come from low-end, commuter models.

Harley-Davidson saw sales drop after an initial surge and its India operation suffered from executive turnover.

The company 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, the Times reported, citing the Society of Indian Automobile Manufacturers.

Harley-Davidson’s top model exceeds $88,000 in Delhi after taxes and licensing fees, which is 41 times India’s average yearly income.

Harley-Davidson said in September it would discontinue its sales and manufacturing operations in India after a decade of struggling to gain a foothold, Reuters reported.

A month later the company entered a distribution deal with India's Hero MotoCorp which will also develop motorcycles to be sold under the Harley-Davidson brand.

On Tuesday, Reuters reported that Harley-Davidson dealers in India said they were exploring legal action against the company. General Motors  (GM) - Get Report, MAN Trucks and UM Motorcycles have also exited India in the last three years

Last month, Harley-Davidson blew past Wall Street's third-quarter earnings expectations. 

Harley-Davison said it planned to concentrate on about 50 markets, primarily in North America, Europe and parts of Asia Pacific, that represent a high percentage of the company's expected volume and growth potential.