The recent partnership between Hero MotoCorp and Harley-Davidson might have brought back some life in the minds of Harley fans, but the parent company is far from a trouble-free zone. When Harley-Davidson announced that the iconic American brand is stepping out of India, the dealers weren’t informed and are still facing an uncertain future. It is worth noting that Harley was the first premium motorcycle brand in the country to set up shop officially and locally manufacture its bikes in India.
The said dealers assembled at a press conference organized by FADA on Tuesday and had a lot to say about the parent company.
The company dealers claimed that they were kept in the dark regarding the company’s future plans and the news struck a huge blow as Harley-Davidson never officially informed its dealer body about its India exit. The dealers added that they have received a ‘very minor compensation’ from the American motorcycle making brand which are completely inadequate. The company has backed out completely from providing any compensation to a dealer in case it transitions into a Hero dealer in future, say Harley-Davidson dealers.
Talking about the compensation on offer, the brand has reportedly announced a compensation package of ₹1,500 per sq. ft. with a 10% annual value-depreciated rate and a 6-month reimbursement of the margins of sale. “The support package given by the company is not equal to the loss suffered by us since August’20 after the lockdown was lifted and till Hero comes on board which will be at least another 6 months,” said an affected Harley-Davidson dealer.
The latest development regarding this suggests that a number of dealers have hired leading Indian law firm AZB & Partners to review their paperwork with Harley-Davidson and suggest if there is a legal remedy. The US company in September said it would discontinue its sales and manufacturing operations in India after a decade of struggling to gain a foothold. A month later it entered a distribution deal with India’s Hero MotoCorp which will also develop motorcycles to be sold under the Harley-Davidson brand.
General Motors (GM), MAN Trucks and UM Motorcycles have also exited India in the last three years, creating uncertainty for dealers that typically invest millions of dollars to set up showrooms. FADA said it typically costs between 50 million and 80 million rupees ($673,682-$1 million) to set up a Harley-Davidson dealership. Compensation being offered by the company is around 10% of the investment, it estimates.