Harley Davidson dealers unhappy with low compensation, look at legal options

Disheartened with low compensation, dealers of Harley Davidson in India are now looking at legal options to get their grievances addressed. The iconic American bike maker, in September, had announced that it would discontinue its sales and manufacturing operations in India. It had also announced a tie-up with Hero Corp.

Dealers are still awaiting clarity from the company on the next steps, estimate the network will be scaled down by more than half to 13 – 15 dealerships from the current 33. Reports highlight that a section of dealers feel that continuing with recently opened showrooms may not be viable, especially in smaller towns and in metros, including NCR and Bengaluru which have several such outlets.

The management of Harley Davidson, as per various reports, offered a compensation of Rs 1,500 per sq ft with a 10 per cent annual value-depreciated rate and a six month reimbursement of the margins of sale. However, dealers brushed off this compensation saying that its way below the Rs 300 crore they had invested over the last decade. One of the dealers said the support package given by Harley Davidson is not equal to the loss suffered by them since August 2020. Another said that on an average, each dealer has been incurring a loss of Rs 30 to 40 lakh per month.

Also Read: Harley Davidson closure will impact 2,000 workers and 35 dealerships: FADA

“From September 23 this year, when Harley Davidson decided to wind up operations in India, we are uncertain about the fate of our investments and future business outlook,” an impacted dealer pointed out. “The brand had been in a growth mode since January this year that would include introduction of a new smaller segment of bikes and several methods to improve sales. We expected the bike maker to appropriately compensate us.”

Harley Davidson, in its 11 years of operations in India, has witnessed its losses mount and market shares shrink across continents. And its struggling to keep up with the changing consumer preferences.