Harley-Davidson Japan unit comes under fire after standards force dealers into tough spot

The Fair Trade Commission on Tuesday raided Harley-Davidson’s Japanese branch in Tokyo on charges of imposing excessive sales quotas on dealers, a violation of antitrust law.

Harley-Davidson Japan allegedly unilaterally set difficult-to-achieve sales quotas and forced dealers to accept them starting around 2020-2021, informed sources say.

According to sources, the company is also suspected of tricking dealers into buying unwanted Harley-Davidson models.

The antitrust authority believes that the company’s practices may constitute an abuse of a dominant position, which is prohibited by law.

The Japanese unit of a major American motorcycle manufacturer allegedly suggested it would not renew dealership contracts if sales quotas were not met. It is believed that to meet the quotas, dealers and their employees purchased and registered Harley-Davidson motorcycles.

According to sources, some dealers ran into financial difficulties and went bankrupt.

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 be part of its efforts to increase market share.

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