Harley-Davidson's sudden exit leaves bike owners high and dry

Harley-Davidson’s inability to continue operations in India in the face of uncertain market conditions has left the bike owners to fend for themselves. The company announced its plan to exit India on September 24.

To further fuel anxiety levels, the bike company has not provided any firm assurance on providing service support to the 25,000-odd bikes it has sold in the country.

Question mark over service support

Little over 30 dealerships and an equal number of service centres were operational in India before the news of the exit came. By September 24 evening, individual HD dealer websites became non-functional, though Harley’s India website was still retailing bikes.

Questions on continuity of service support and spare parts availability remained unanswered by the spokesperson based in the US to whom an email was sent by Moneycontrol on September 24.

“The company is communicating with its customers and will keep them updated on future support”, stated the press release from the company. Bike owners claim that they got to know of the brand’s exit from news articles.

Also Read: Harley-Davidson shuts down India operations, 70 employees face the axe

Spare-parts procurement on-going issue

Several Harley bike owners Moneycontrol spoke to said that procurement of spare parts had been a trying issue for the past several months. This situation, they fear, would only aggravate from here on.

“To get a couple of brake pads replaced, I had to wait for three months. They kept telling me that the parts were coming from Singapore. The bike was lying idle for the entire duration because I could not risk riding it with worn-out brake pads,” said a HD bike owner based in Bengaluru.

“I bought the Softail for Rs 15 lakh and spent another Rs 5 lakh on accessorising it in 2018. But due to lack of service support, the bike is lying idle. It needs a clutch plate replacement, for which I had placed a request before the lockdown,” said an owner of Low Rider S.

In the company statement, Harley-Davidson added that the business contract with its dealers in India will live its life and won’t be renewed thereafter. It would be next to impossible for dealers to keep running their businesses based on just the income from the service centres.

“With a luxury brand like Harley, setting up a dealership costs anywhere between Rs 3-4 crore. With a total of 35 dealerships, Rs 110-130 crore will go down the drain. Moreover, there will be customers who will not receive glitch-free service as spares will now be in shortage, thus leading to dealer harassment cases”, said Vinkesh Gulati, president, Federation of Automobile Dealers Association.

General Motors example

In 2017, General Motors announced the exit of Chevrolet from India, marking the first exit by a popular auto brand from the country. General Motors sold a few best-sellers such as the Chevrolet Tavera and Chevrolet Beat.

The move to quit India did not jeopardise General Motors’ service offering to the country. The company assured its customers that all vehicle service needs will be met through authorised service centres, which will remain open and spare parts will be available for the next 10 years.

Harley-Davidson has the option of tying up with a third party service provider, but with just around 25,000 bikes, investors will be hard to find. Premium bikes such as that from Harley-Davidson are generally not encouraged to be serviced at a non-Harley service center.

“Just setting up a service centre of Harley will cost Rs 1-2 crore. The investor who is brave enough to invest in such a market has to manage imports of spare parts all by himself. The parts themselves don’t come cheap. Plus, the volume of HD bikes available for servicing won’t be huge as only 25,000 bikes have been sold in India,” said an HD dealer on the condition of anonymity.

Bikes on discount

Harley-Davidson’s announcement to exit India may have come as a surprise to many but the writing started to appear on the wall since the start of September.

Usually, when brands decide to exit markets, inventories are sold at never-before-seen prices. That is what happened at Harley-Davidson India.

Its bikes such as the Low Rider S were being sold at Rs 14.69 lakh after a discount of Rs 1.5 lakh. The Iron 883 was priced lower at Rs 9.38 lakh after a discount of Rs 90,000. These were bikes compliant with the latest emission norms of Bharat Stage VI.