In a bid to assuage its irate dealers, legendary American cruiser bike maker Harley Davidson on Saturday said it is working with Hero MotoCorp, with whom it has signed a distribution tie-up, to ensure a smooth transition and availability of parts and after-sales services to its customers from January 2021 onwards.
In September the company announced its exit from the Indian market after an 11-year solo ride, as part of its global restructuring plan- 'The Rewire', to contain mounting losses. It had at the time given no clarity or details on how it planned to compensate dealers or ensure availability of service to its 30,000 odd customers in India. A month later, it announced a distribution tie-up with India's largest two-wheeler maker Hero MotoCorp. The licensing arrangement will also help Hero develop and sell a range of cruisers under the Harley nameplate in years to come.
"As we change our business model in India, we are pleased to be continuing our journey in the country together with Hero MotoCorp. We are working closely with Hero to ensure a smooth transition for our riders," said Sajeev Rajasekharan, Managing Director - Asia Emerging Markets & India, Harley-Davidson.
"We are providing our riders with updates as available and have assured them that Harley-Davidson motorcycles, parts, and accessories and general merchandise sales, as well as after-sale services, warranty, and H.O.G. activities will continue from January 2021 onwards."
The statement comes after 21 dealers of the company expressed dismay at the way they were kept in the dark about Harley's plans to exit the market and balked at the low compensation offered by the company.
A fixed cost of around Rs 1,500 per square metre of showroom space has been offered to dealers, which they said did not cover even 10 per cent of the capital they have invested in the business. Dealers have threatened to take the company to court if a better package is not announced.
"The compensation being offered is a joke. It does not even cover the cost of the launch party that I threw at the inauguration of the dealership in 2013," said Manish Gupta, who owns Harley's dealership in Indore.
"We want better and more adequate compensation and are hopeful of a solution. We are talking to everybody - Harley, Hero MotoCorp as well as the lawyers. We have no other option but to fight and will take them to court if necessary," said Arjun Bafna, one of the company's oldest dealers since 2010.
While the tie-up with Hero has raised some expectations, the decision to stop selling the Street 750, the company's entry-level and best-selling model in India, has impaired the viability of the business for dealers. There is no certainty that many of them will stick around and Saturday's statement while welcome, does little to address their specific concerns.
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