Here's why Harley-Davidson dealers in India may ignite legal battle

Harley-Davidson's dealers on Tuesday said they are looking at taking legal action against the US cult bike manufacturer, which in September announced exit from the country, over measly compensation.

The dealers said they are unhappy with the compensation being offered to them and due to this they are now forced to evaluate legal options.

"The way we have been treated is not fair. We never expected such an outcome from a big brand like Harley-Davidson. The compensation that they are offering us is miniscule. So we are evaluating all options, including legal recourse," Rishi Aggarwal, a Delhi-based dealer, said in a press conference organised by the Federation of Automobile Dealers Associations (FADA).

(Related read: Harley-Davidson left us in the dark, say dealers in India)

Arjun Bafna, another dealer, said that the US firm is offering them a very low compensation and there is no clarity on how the aftersales system would work going ahead.

The US-based company is offering to dealers just ₹1,500 per square feet, which is way too less, and that too with various riders, he said.

Another dealer from Indore cited issues with spare parts availability, and said the problems for Harley customers looking for aftersale services are going to increase going ahead.

There are33 Harley-Davidson dealers in India.

FADA President Vinkesh Gulati said the dealers require a franchise protection act as the current regulations grossly favour original equipment manufacturers (OEMs) when it comes to business agreements.

"We are working towards such regulation as we have seen so many companies exiting and leaving their dealer partners in lurch. It will not happen in a day, but we are determined to see it through to safeguard the future of dealer fraternity," he said.

In September this year, Harley-Davidson announced discontinuation of sales and manufacturing operations in India, a decade after it started selling its premium bikes in the country.

In late October, Hero MotoCorp and Harley-Davidson announced a wide-ranging partnership for the Indian market.

As part of the deal, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name in the country. Besides, it will take care of service and parts requirements for Harley bikes.

Further, Hero MotoCorp would sell Harley accessories and general merchandise, riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and its existing sales network in the country.