Harley-Davidson Japan Under Investigation for Allegedly Forcing Dealerships to Buy Excess Motorcycles
The Fair Trade Commission (FTC) raided the Tokyo office of Harley-Davidson Japan KK on July 30th, 2023, on suspicion of forcing dealerships to purchase motorcycles out of their own pockets to meet unrealistic sales quotas.
Sources claim that Harley-Davidson Japan began imposing excessively high sales quotas on its dealerships around four years ago. When dealerships failed to meet these quotas, the company allegedly threatened to terminate their contracts unless they purchased the remaining motorcycles themselves. This practice is suspected to violate Japan's Anti-Monopoly Law, which prohibits the abuse of a dominant bargaining position.
Dealerships that bought excess motorcycles and registered them under employees' or other individuals' names were left with "unused, registered" vehicles that depreciated significantly in value. These motorcycles could only be sold at much lower prices, causing financial losses for the dealerships.
One Harley-Davidson dealer in eastern Japan, who wished to remain anonymous, stated that he was assigned a sales quota of 130 motorcycles this year, despite his dealership typically selling only around 70 motorcycles annually. He claimed that he spent nearly 100 million yen ($651,000) of his own money to purchase unsold motorcycles last year and could only resell them at a substantial loss. He intends to terminate his dealership contract this year.
A Harley-Davidson Japan representative confirmed that the company is cooperating fully with the FTC's investigation. Despite the allegations, Harley-Davidson Japan reported a 24% increase in sales in 2023, reaching 28 billion yen. This increase was partly attributed to the depreciation of the yen.