Harley-Davidson India Dealers Left In The Lurch, Consider Legal Options

Harley-Davidson dealers in India have spoken out against the American motorcycle brand's decision to exit operations in India. The dealers say that Harley-Davidson has left them in the lurch, and the compensation offered to them is far below expectations, calling it 'unreasonable' and 'peanuts' compared to the investments each of the 33 Harley-Davidson dealerships has made across the country over the years. The dealers say Harley-Davidson never intimated them about the company's plans to exit the Indian market, and they only got to know about the news through media reports. The dealers now say that they have appointed law firm AZB & Partners and are exploring legal options as well.

Also Read: Harley-Davidson Decides To Discontinue India Operations

The made-in-India Harley-Davidson Street 750 used to be the brand's best-selling offering in India, but has now been discontinued

"It's purely been an emotional journey for many of us, who have also been Harley-Davidson riders, from the moment the brand set up shop in India. We never thought this journey would come to an abrupt end in this manner. This has put us all in shock," said Gaurav Gulati, Owner, Red Fort Harley-Davidson, Delhi.

"When the news of Harley-Davidson deciding to exit India came, we got to know through media reports; there was no official announcement. Harley-Davidson told us to wait, maintaining that the company does not comment on market speculation. A lot of businesses, whether here in India, or abroad, is based on trust. We trusted the Harley-Davidson brand. Sadly, now we feel sidelined. We have been partners for over 10 years, we acted in good faith. We were blinded by our love for the brand, but feel let down," said Adarsh Tulshan, who owns Harley-Davidson dealerships in Kolkata and Ranchi.

Also Read: Harley-Davidson India Dealers Kept In The Dark, Says FADA

Dealers say customers have been calling to figure out what will happen to them and their motorcycles

The Harley-Davidson dealers say that they have facilitated and nurtured the entry and growth of the iconic American motorcycle brand in India for 11 years, and each dealership adhered to all the norms stated by Harley-Davidson and set up state-of-the-art showrooms by investing approximately Rs. 4 crore in each location. The dealers further invested and built world-class service facilities with tools, equipment and trained manpower, costing approximately Rs. 1 crore per dealership. Now, with Harley-Davidson announcing the brand's sudden exit from India has brought on uncertainty for every dealer's future.

"We have stock of spares for the existing Harley-Davidson customers for some time. We have always stood by our customers, but we have not got any support from Harley-Davidson India. The Harley-Davidson Street 750, which accounted for 80 per cent of Harley-Davidson sales in India has been discontinued, and without any official announcement. So, for future supply of spares, the customers will face the heat," said Manish Gupta, owner of Tiger Harley-Davidson, Indore.

Also Read: Hero MotoCorp To Manufacture & Market Harley-Davidson Bikes In India

Dealers say each Harley-Davidson showroom requires an average investment of Rs. 4 crore

According to the Harley-Davidson dealers, the company has now offered compensation, but the amount offered is not in line with their expectations, and will hardly meet a fraction of the investments each of the 33 Harley-Davidson dealers had made across the country. At meeting held to discuss compensation, Harley-Davidson management offered Rs. 1,500 per square feet value, depreciated at 10 per cent per annum, and a 6-month reimbursement of the margins of sale. The dealers feel let down and have expressed disappointment with these terms.

Harley-Davidson has already tied up China's Qianjiang Group, which will manufacture the small displacement Harley-Davidson 338R

"When we asked Harley-Davidson after reading the media reports about the company's exit, Harley-Davidson said this is all hearsay, and that the company doesn't react to market speculation. We found out about Harley-Davidson's decision to exit India from the media, and not from any communication from the company. The compensation offered is nothing. And it comes with several riders, including a 10 per cent depreciation every year, which will be deducted. So, effectively a dealership which as existed for 10 years will get nothing. And then there's the other rider, that whatever is offered in the name of compensation will not be valid, if any dealership decides to become part of the new arrangement with Hero MotoCorp. So, continuity with the Harley-Davidson brand with Hero will mean no compensation," said Arjun Bafna, of Seven Islands Harley-Davidson.

Harley-Davidson has 33 dealerships across India, and dealers say the compensation offered to them is unreasonable

Harley-Davidson's decision to exit the Indian market came as part of The Rewire strategy, under which the American cruiser motorcycle brand will be looking to exit several international markets and focus on the brand's core strengths. Following the decision, Harley-Davidson announced a new partnership with India's Hero MotoCorp for the India market. Under the new partnership and distribution agreement, Hero MotoCorp will sell and service Harley-Davidson motorcycles, and also sell parts and accessories, as well as general merchandise, riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero's existing dealership network in India. According to a press statement, as part of a new Licensing agreement, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name.