Harley Fails, Hyundai Triumphs-India's Auto Market is Unlike Any Other

Business Standard Harley fails, Hyundai triumphs: India's auto market is unlike any other

The problems: taxation system favours smaller cars, expat CEOs don't always understand business landscape.

In recent weeks, cult motorcycle company Harley-Davidson made waves as it announced its exit from the subcontinent just seven months after buzz that US President Donald Trump would actually push for favourable trade terms on his visit here. The goal being that Harley could up the ante in terms of its Indian footprint. Instead, the company that the 1969 Peter Fonda-starrer Easy Rider made famous, slammed the brakes hard on sales and manufacturing operations, taking a $75 million hit because it missed volumes and revenue targets.

Such failure isn’t uncommon.

Between 2014 and 2015, General Motors CEO Mary Barra came to India not once but three times. Eventually, its company Chevrolet, which started here over two decades ago, threw in the towel and announced in 2017 that it would pull out of the country altogether.

The other American automotive icon, Ford Motor Co, which started in India, fared marginally better. It first came here in 1995 with a joint venture with Mahindra & Mahindra (M&M), which didn’t last long and then got some traction with its first car, the Ikon, in 1999 that was truly made for India. Its Fiesta hatchback and EcoSport threw up successful numbers but slowed down as the company ran out of new cars to launch. In 2019, Ford announced that it once again would partner with M&M, which had a chequered history around partnerships: M&M-Renault (2007), Mahindra-Navistar (2005) and M&M-Ford (1995), all struggled to hit pay dirt and ended unsuccessfully.

India is a vibrant auto market and despite the downturn, became the fifthlargest in 2019 with sales reaching 3.81 million units. It was the seventh-largest manufacturer of commercial vehicles in 2019. Which is why foreign players come here. But it wasn’t just the Americans who had a rough ride. The Volkswagen Group had a good thing going with Skoda but then lost its way with the positioning of its VW badge and pricing strategy, something it’s striving to correct; Japanese auto majors Toyota and Honda, despite their engineering pedigree, couldn’t drum up market share and volumes.