JAPAN NEWS



 

The Japan Fair Trade Commission has decided to issue a cease and desist order against Harley-Davidson Japan K.K. (HDJ), a Tokyo-based motorcycle sales company, for unfair trade practices in violation of the antimonopoly law, sources report.

According to the sources, HDJ unilaterally imposed difficult-to-meet sales quotas on dealers, a practice which was detrimental to them. The JFTC is also expected to issue a surcharge payment order of about ¥200 million.

Harley-Davidson is the leading manufacturer of large motorcycles in the United States, with some models costing over ¥5 million. HDJ, its Japanese subsidiary, has an exclusive distribution agreement with about 90 dealers in Japan.

The sources say that no later than January 2023, HDJ began saddling dozens of dealers with sales quotas that they could not meet without purchasing new motorcycles from themselves. HDJ also indicated that it would not renew the dealers’ exclusive sales contracts if they did not at least partially meet these quotas.

The dealers, not wanting their contracts to be terminated, bought new motorcycles in the names of their own executives and employees to drive up their sales numbers.

It is believed that the purchased vehicles were registered in the names of the executives and others and resold as “registered unused vehicles” at discount prices lower than those of new vehicles. Some dealers spent tens of millions of yen a year buying their own motorcycles.

The JFTC found that HDJ used its strong position to gain profits for itself at the dealers’ expense, and that such practices legally constituted “abuse of a superior bargaining position.” It has already sent HDJ a plan for measures to be taken and will formally issue the order after hearing HDJ’s opinion.