Harley-Davidson (HD) dealers in India on Tuesday said that they have to shut shops in the near future if they are not compensated for their investments by the American motorcycle brand.

In September, HD had announced discontinuation of sales and manufacturing operations in India and in October announced partnership with Hero MotoCorp and as part of the deal Hero will develop and sell a range of premium motorcycles under the Harley-Davidson brand.

As per the deal, Hero will also take care of service and parts requirements for Harley bikes. However, the dealers said that Hero has approached only a few existing dealers, and it was not sure whether they want to retain the existing dealers or sell the accessories and upcoming products from Hero’s own network.

There are a total of 33 dealers across India for Harley-Davidson and they have also hired leading Indian law firm AZB & Partners to review their paper work and suggest for any legal recourse.

These dealers have spent around ₹200 crore over the last few years to expand their network, but suddenly Harley Davidson announced its exit from the Indian market as part of its restructuring plan.

“We will have no choice than shutting our shops if no remedies come,” said Gaurav Gulati, a Delhi-based dealer, adding that the dealers cannot continue with such a huge losses at this point in time, and also don’t know what to do with the unsold motorcycles at their outlets.

Compensation

Another HD dealer said they have time till December 30, so if they get any positive news then it will be a different thing. The HD Management offered a compensation of ₹1,500 per sq.ft with a 10 per cent annual value-depreciated rate and a six -month reimbursement of the margins of sale.

“This means we are getting nothing in return...it is zero by this calculation,” said Rishi Aggarwal, another dealer, adding that even a showroom launch spend was much more than what the company is offering to them.

“We never expected such an outcome from a big brand like Harley-Davidson. We kept spending a lot on our showrooms, as per their (HD) global standards in good faith, but not getting anything now in return. We are spending so much right now also on payment to staff and for rentals,” Aggarwal added at a virtual conference organised by Federation of Automobile Dealers Association (FADA).