Dealers, owners may seek govt protection as Harley silent on future course

Chief worries are bike servicing and spares, and likely spurt in consumer cases; Industry sources say iconic bike maker may tie up with Hero for distribution and after-sales

Harley-Davidson has announced quitting India operations but is yet to assure thousands of its owners and around 35 dealerships of providing service support to the 25,000-odd bikes it has sold in the country.

The US motorcycle manufacturer on Thursday announced that quitting India operations was part of its global restructuring initiatives. 

It plans to exit international markets, where volumes and profitability have been elusive.

Its dealers, however, are anxious that they may face similar ordeal as seen when foreign companies had quit India in the past. Harely-Davidson is the fourth foreign automobile brand to shut shop in India after General Motors, MAN trucks, and UM Lohia in recent years.

“When a brand leaves a country, it results in unavailability of spares and service, makes customers anxious and consumer cases follow,” said Vinkesh Gulati, president of automobile dealers’ association FADA.

Gulati said the association would approach the government for implementation of the Franchise Protection Act, which protects dealers’ interest during such closures by manufacturers.

Queries to a company spokesperson were not responded to.

Setting up its dealership for premium brands like Harley costs up to Rs 5 crore. Industry estimate say luxury two-wheeler dealership on an average employs 50 people.  

“The company has not informed any of its dealer partners about its closure plans and dealers are yet to receive any official communication,” said Gulati, adding that the dealers who invested their hard-earned capital in this brand were left in the lurch without any compensation package.

The company, however, is in advanced talks with India’s Hero MotoCorp for a distribution deal, which will allow the US firm's motorcycles to be sold in India. The non-equity deal may let Hero become a contract manufacturer for Harley and handle distribution in India.

UK-based Triumph Motorcycles, Harley’s rival in the 500-cc and above segment, has a non-equity partnership with Bajaj Auto, under which it manufactures its products at Bajaj’s Chakan factory. Bajaj also handles the distribution for Triumph.

The news of the company leaving India came as a shock for Atul Makharia, director of Bengal Harley, which was eastern zone’s first Harley-Davidson showroom.

“Though there were reports, the company never communicated any such intention to us. In fact, they were actively communicating. My customers are asking about after-sales to which I can only say that all contract will be honoured till December,” Makharia said.

He, however, believes that an iconic company like Harley would find a solution.

A Harley-Davidson owner said the company sent a mail to its customers saying that it was evaluating options for India and the current dealers would provide services till December.

A call to Harley-Davidson’s call centre on how would the company provide after-sales service to its customers didn’t elicit a response beyond “we are working on a changed business model. Be rest assured your product will be taken care of”.

Industry executives, however, said a deal with a major company like Hero MotoCorp would bode well for both.

“Just setting up a service centre of Harley will cost Rs 1-2 crore. The parts don’t come cheap. Plus, the volume of Harley bikes available for servicing won’t be huge as only 25,000 bikes have been sold in India. Only a major company like Hero with a strong distribution channel can handle this,” said an executive.