Harley-Davidson Faced Financial Penalties for Implementing High Sales Targets in Japan
In a recent development, Harley-Davidson Japan K.K. has been penalised for violating the antimonopoly law due to the imposition of excessive sales targets on its dealers. The Japan Fair Trade Commission (JFTC) has ordered the company to pay a fine of approximately 200 million yen as a penalty for this violation.
According to the JFTC, Harley-Davidson Japan K.K. has been unilaterally setting sales targets for 38 major dealers since at least January 31, 2023. These targets were not based on the dealers' capacity or sales history, and the company did not provide financial incentives for meeting them.
The violation involves sales targets imposed by Harley-Davidson Japan K.K. on its dealers, which led to some dealers being required to purchase and register new motorcycles themselves to meet the sales targets. The 38 dealers who have been subject to these unilateral sales targets are exclusive contract dealers, and dealers failing to meet these targets risked non-renewal of contracts.
The JFTC has issued a cease-and-desist order against Harley-Davidson Japan K.K. to stop the violation, and has also ordered the company to discontinue the practice of setting sales targets for its dealers. The company checked progress on the sales targets quarterly and suggested it would not renew contracts if dealers failed to meet sales targets twice in a row.
The JFTC is further investigating the company's sales practices, and the purchased motorcycles were later sold in the secondhand market by the dealers. It is worth noting that only about 10% of the dealers managed to meet these sales goals.
This development comes at a time when Harley-Davidson Japan K.K. is under scrutiny for its sales practices, and the company's sales targets were a contributing factor to the violation of the antimonopoly law. The company set sales targets for each dealer every January, and the violation occurred since at least January 31, 2023. The antitrust watchdog, the Japan Fair Trade Commission, has ordered Harley-Davidson Japan K.K. to take immediate steps to rectify the situation and ensure compliance with the antimonopoly law in the future.
