Harley-Davidson's Japan unit raided after quotas force dealers into hardship

Harley-Davidson motorcycles on display in Tokyo. Japan's antitrust watchdog has raided the manufacturer's Japan unit for allegedly imposing excessive sales quotas on its dealers. | BLOOMBERG

Wires
July 30, 2024

The Fair Trade Commission raided Harley-Davidson's Japan unit in Tokyo on Tuesday for allegedly imposing excessive sales quotas on its dealers, in violation of the antimonopoly law.

Harley-Davidson Japan is alleged to have unilaterally set sales quotas that were difficult to achieve and forced dealers to accept them since around 2020-21, informed sources said.

The company is also suspected of having dealers buy Harley-Davidson models that they did not want, according to the sources.

The antitrust watchdog believes that the company's practices could constitute abuse of a superior position, which is banned by the law.

The Japanese unit of the major U.S. motorcycle manufacturer allegedly suggested that it would not renew dealership contracts if sales quotas were not achieved. To meet the quotas, dealers and their employees are believed to have purchased and registered Harley-Davidson motorcycles.

Some dealers have faced financial difficulties and gone out of business, the sources said.

According to the Japan Automobile Importers Association, Harley-Davidson had the largest share, at 37.1%, of imported small motorcycles newly registered in fiscal 2023. The Japanese unit's practices are believed to have been part of its efforts to expand its market share.

In a similar case, the Japanese watchdog conducted an on-site inspection of the Japanese arm of German auto giant BMW in September 2019, and approved an improvement plan submitted by the company in March 2021.