The transportation industry has seen the future, and the future is 1895.That was the year Ogden Bolton Jr. of Canton, Ohio, was awarded U.S. Patent 552,271 for an “electrical bicycle.” A century and change later, electric bikes have gained new currency as car and motorcycle companies like Ducati, Harley-Davidson, Jeep, Mercedes-Benz, Porsche and Yamaha have horned into the market with their own designs.While the pandemic has accelerated bike sales, the overriding attraction is that cities worldwide are beginning to restrict motor traffic. These companies are betting that e-bikes are the urban vehicles of tomorrow — or at least vehicles for …
NEW DELHI — Bhupender Singh crouched over a fuel tank inside a Harley-Davidson showroom. A row of motorcycles gleamed in the afternoon sun; one metallic red, another with a black matte finish and a slightly taller variant in blue.
The motorcycles were not for sale, but for repair. The dealership’s front door was locked. Harley-Davidson, the proudly American company, is giving up on India because of weak sales, after more than a decade of pursuing a huge but ultimately frustrating place to do business.
“It’s all over now,” said Mr. Singh, a service representative. “There are no bikes to sell anymore.”
The closure has dealt a blow to India’s ambitions to lure manufacturers, a campaign modeled on China’s success called “Make in India.” It has set back Harley-Davidson’s efforts to expand its popularity overseas. And it strands a small but devoted group of Harley devotees who are wondering how they will keep their prized rides rumbling.
“It’s like losing someone in your family,” said Sandeep Bharadwaj, the chief executive of a bus manufacturing firm, who spent more than $40,000 on his Fat Boy motorcycle. “We had a mental assurance that they were physically present and they could help us with spare parts.”
Companies looking for the next boom have long eyed India, a country of 1.3 billion people with an aspirational middle class. Setting up shop there, however, remains difficult. Roads and rails are inadequate in many areas. Land policies flummox construction. India’s red tape is infamous.
With his “Make in India” campaign, Prime Minister Narendra Modi vowed to reduce bureaucratic hurdles, invest in infrastructure and take other steps to draw high-end manufacturing jobs and design work.
Even before the pandemic, the campaign had been disappointing. Manufacturing contributes less to India’s economic output than it did a decade ago. The government has struggled to build an ecosystem for manufacturers, including infrastructure and industrial parks. Small suppliers who might help a big manufacturer flesh out a supply chain have a hard time getting credit.
“Harley came to produce for your market,” said C.P. Chandrashekhar, an economist and former professor at the Jawaharlal Nehru University in New Delhi. “If they’re not happy, they’ll just get up and leave.”
A spokesman for the Ministry of Commerce in New Delhi said that the government is trying to reduce the red tape for companies.
Despite the difficulties, any foreign manufacturer interested in India has to explore setting up shop here. The country has some of the steepest trade barriers among the world’s large nations. President Trump has repeatedly cited the high duties on Harley-Davidson bikes in his trade negotiations with New Delhi.
India dropped the tariffs on Harley motorcycles from 75 percent to 50 percent in 2018. Still, the government charges an additional 31 percent tax on two-wheelers, one of the highest in the world.
Harley-Davidson decided to put bikes together inside the country. The Milwaukee-based company sent knockdown kits — packages of parts to be assembled — for low-powered models, like the Street 750, to its factory outside New Delhi. The signature, higher-end motorcycles were still being shipped from the United States.
But sales dropped after an initial surge, and the India operation suffered from executive turnover. Harley-Davidson 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, according to the Society of Indian Automobile Manufacturers, a nonprofit representing automotive manufacturers.
The company’s motorcycles also remained out of reach for many. Harley’s top model exceeds $88,000 in Delhi after taxes and licensing fees. That is 41 times India’s average yearly income, according to the World Bank.
People in India overwhelmingly prefer cheaper, lighter bikes that are easy to maneuver along the country’s potholed, traffic-choked roads. The most expensive bike from Hero MotoCorp, one of the country’s biggest manufacturers of motorcycles and scooters, costs around $1,500.
Harley-Davidson’s moves in India are part of a broader restructuring. Harley’s average customer is aging fast. Its sales have been stagnant and profitability has declined.
Under Jochen Zeitz, its new president and chief executive, the company is downsizing dealerships, restricting production to a handful of models and scrapping discounts to portray the bikes as an exclusive luxury item.
“That’s always a tricky proposition because customers can get turned off,” said Stephen Brown, a Chicago-based senior director at Fitch Ratings, a credit ratings agency. “It’s a delicate balance that they’re walking right now.”
The Harley name will not disappear from India entirely. The company said last month that it struck 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 bike in India, is not clear. Harley is also laying off about 70 workers.
India’s Harley enthusiasts are wondering what it means to them.
In 2014, Gaurav Gulati, a longtime Harley rider, was enticed by the company’s managing director in India to open a dealership in New Delhi.
Mr. Gulati wanted to go big. He scoured the city for an ideal spot and settled on an abandoned warehouse that he would transform into a chic Harley store with a cafe, a workshop, garage, lockers and even a shower for riders. 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 is sitting on a $1.2 million investment, which he made partly from his own savings and partly after borrowing from banks. He is still paying about $20,000 in monthly rent.
Neither Harley nor its new India partner, Hero MotoCorp, have approached Mr. Gulati to continue the term for his dealership, he said. His dealership agreement expires at the end of the year.
“I am devastated,” said Mr. Gulati, as he gazed at the outer wall of his store, which he decorated with red old-style bricks and graffiti. “It’s a mental torture. Where did I put my trust and faith? What am I going to do?”
Despite all of this, some of Harley’s die-hard fans in India are not giving up.
On a recent morning, Preetam Thakoor, a real-estate developer, and other riders from his Harley club took their bikes for a weekend ride. They rode in full gear, wearing American flag bandannas, dog tags and custom-made jackets emblazoned with their initials.
“It’s not about the machine,” said Mr. 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 rode from India’s northernmost corner in Kashmir to its southernmost tip, Kanyakumari, a journey of more than 1,700 miles.
In the middle of that ride, he ran out of cash after Mr. Modi announced a sudden ban on high-value Indian bank notes, part of a national effort to stamp out corruption and get more Indians to use digital currency. A fellow Harley rider flew down from Mumbai to the southern city of Chennai to deliver him cash.
That camaraderie, is “a feeling you can’t describe in words,” said Mr. Thakoor.
It is not clear whether he can continue with his passion. Indian riders and dealers will have to find sources for crucial machinery: batteries, accelerator cables, silencers.
“There’s no jugaad in this case,” said Mr. Thakoor, referring to the Indian way of finding inexpensive solutions to big problems.
Harley, he said, “should’ve been here.”
Vindu Goel contributed reporting.