Japan’s antitrust authority is preparing to fine Harley-Davidson’s local subsidiary JPY200 million (US$1.38 million) for imposing unreasonable sales quotas on dealers.
The Fair Trade Commission (FTC) will also issue a cease-and-desist order to prevent future violations. The FTC is believed to have notified the company and will confirm its decision after considering its response, a source familiar with the matter told Nikkei.
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Motorcycles at a Harley Davidson motorcycle dealer in the Netherlands. Photo by AFP |
The source said that Harley-Davidson unilaterally imposed unattainable sales quotas on dozens of dealers, which could not be achieved through regular sales efforts.
The company reportedly indicated, both verbally and in written materials, that failure to meet a specific threshold could lead to termination of dealership contracts.
This practice has been ongoing since at least January 2023, and possibly earlier.
Dealers were forced to purchase motorcycles themselves and sell them as “registered but unused vehicles,” which command lower prices than new ones.
Given their prior investments, such as store renovations to sell the motorbikes, dealers had to comply.
Under Japan’s antimonopoly law, abusing a superior bargaining position to impose unfair business terms is prohibited. Upon finding a violation, the FTC can issue a cease-and-desist order and impose a surcharge of 1% of the sales generated from the illicit conduct.
Harley-Davidson, an iconic American motorcycle manufacturer founded in 1903, is known for its heavyweight engine motorcycles.
It sold 151,200 units worldwide last year, a 7% drop from 2023, the second annual decline in a row.
