Only 10 Harley-Davidson dealerships absorbed by Hero MotoCorp: H-D’s offer vs what dealers want

In September this year, Harley-Davidson announced the discontinuation of sales and manufacturing operations in India, a decade after it started selling its premium bikes in the country.

By:December 4, 2020 5:35 PM

Harley-Davidson dealers on Thursday sought a fair deal from the company, which has announced its exit from the country and has announced a partnership with Hero MotoCorp for the Indian market. Harley-Davidson Dealers Association represents 33 outlets in the country. “All the 33 dealer partners have been facing a problem since Harley-Davidson announced the withdrawal of independent operations in India and revealed a new partnership with Hero MotoCorp,” the Harley-Davidson Dealers Association said in a statement.

What Harley-Davidson has offered to the dealerships

Upon its exit from India as a standalone company, Harley-Davidson announced that it will be retailing its motorcycles in the country through Hero MotoCorp. This gives the dealerships the option to be absorbed by the Hero MotoCorp network or to withdraw from H-D motorcycles retail.

The ones who choose to wrap business have been offered Rs 1,500 per square foot. This only amounts to compensation of about Rs 50-60 lakh whereas dealerships have invested some Rs 5-6 crore in the setting up and operation, including garage equipment, tools, motorcycle lifts, etc.

Saharsh Damani, CEO, Federation of Automobile Dealers Associations (FADA) tells us that the dealerships which have been inducted by Hero MotorCorp have not been clarified on details like sales margin, supply, etc by Harley-Davidson or Hero MotoCorp yet.

Customers have been facing troubles as well as their motorcycles need servicing but can not be carried out currently. Damani continues to say that about 10-12 H-D dealerships were purely dealership businesses but the rest were set up by Harley enthusiasts who set up an H-D dealership out of their passion for the brand and do not have any other dealerships under them.

So far 10 dealerships have gone ahead with becoming a part of Hero MotoCorp’s dealership network after they were presented with a time-bound take it or leave it situation. The rest of the 23 dealerships currently hang in limbo with no clear communication from H-D on adequate compensation or absorption in the Hero network and with their contracts ending on 31st December.

Also read: After facing backlash from dealers, Harley-Davidson India ensures a ‘smooth transition’

“Hero MotoCorp absorbing only 33 percent of the dealers leaves the rest with uncertainty about the fate of the dealer partner investments and future business outlooks. This includes the 10 dealers who will be coerced to act without receiving any benefit,” the dealer association states.

Hero MotoCorp is yet to decide on the fate and plight of the 23 dealers who are not being approached by it to be a part of its dealership network, it added.

“We feel that providing us with a fair deal is Harley-Davidson’s undeniable responsibility towards us,” the dealers noted.

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