Dealers face uncertain future as Harley rides out of India2 min read . Updated: 28 Sep 2020, 10:57 PM IST
- Dealers confirm that they were informed that their current contracts will not be renewed
- Harley is exploring the possibility of importing bikes from its unit in Thailand through a distributor
MUMBAI/NEW DELHI : Harley-Davidson, which is shuttering its only factory in India, is exploring the possibility of importing motorcycles from its unit in Thailand through a distributor that will handle sales and marketing across the country, said three of its existing dealers in India, requesting anonymity.
The iconic American motorcycle maker meanwhile does not plan to renew contracts with its dealers in India who will henceforth be handled by the distributor, said the two people cited above, adding that the company has begun the process of scouting for the distributor.
They said Harley-Davidson had appointed a bulk of the dealers almost a decade ago, on three-year contracts, subject to further renewals.
As many as three Harley dealers confirmed that they were informed by the company that their current contracts will not be renewed and their future ties with the automaker will be decided by the new distributor.
“Once a national distributor is appointed and the company officially pulls out of India, it would be at the discretion of the distributor to decide the terms and conditions with the existing dealer partners," said one of the three mentioned above.
“Harley-Davidson dealers are apprehensive that the new distributor may not want to continue with 33 dealerships in India and, as a result, few of us may have to shut shop," the second person said.
According to the dealers cited above, Harley-Davidson is actively mulling importing motorcycles from its Thailand-based unit after the closure of its manufacturing plant in Haryana’s Bawal. This model would echo those of other premium bike makers, such as Triumph Motorcycles, Ducati and BMW Motorrad, in India.
Emailed queries sent to Harley-Davidson headquarters in Milwaukee, US on Saturday remained unanswered until press time.
Harley-Davidson announced on 24 September that it would downsize the global dealer network and discontinue sales and manufacturing operations in India. It came on the heels of years of declining sales that drove losses for the company in the world’s largest two-wheeler market.
“There are more than 1,700 Harley owners in Pune alone," said the first person. “The company has told us to honour all customer contracts, including insurance, finance and extended warranty," he said. The company assured that business operations will continue but may be scaled down in response to muted demand.
“We understand that motorcycles will be imported directly from Thailand and Harley’s office in Singapore will conduct the whole process. The arrangement will be similar to what Ducati has in India. However, we weren’t informed in all these months that the company is looking to shut shop in India. Hopefully, not all dealerships will close down," the second person added. Dealer partners said they had invested about ₹10 crore each in setting up a showroom, service bays, buying stock and hiring manpower. Several showrooms have downsized manpower, inventory, reduced display area and cut overheads to fight muted demand.
Meanwhile, Federation of Automobile Dealers Associations of India (Fada), which had earlier helped its members claim compensation when General Motors and MAN Trucks had exited the domestic market, plans to consult a legal team this week and take the matter to relevant authorities.
“This is yet another example that substantiates why India must have a Franchise Protection Act like the one in the US. It is not limited to just one industry. Under this Act, brands exiting a certain market are still required to fulfil their duties towards their customers and investors," said Vinkesh Gulati, president, Fada.