Harley-Davidson has announced that it is to end its third party distribution agreement with Deeley in Canada.
Harley says it will "transition to a model of direct distribution to independently owned dealers in Canada by July 31, 2017" which is when the company's current agreement with Deeley Harley-Davidson of Canada is due to end."
However, the two companies are also in discussions about a possible agreement to bring the closure of the deal forward by some 21 months to as early as the third quarter of 2015 - in an SEC filing the figure of $50m in early termination compensation has been mentioned.
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| Deeley owe their origins as a Harley dealer in Vancouver to Fred Deeley Sr who became a dealer in 1917; Deeley were invited to become exclusive Canadian distributors in 1973 |
It is thought by some industry observers that pricing issues and the unit sales levels being achieved in Canada in the past few years have made it inevitable that Harley would seek to bring its Canadian distribution in line with the global policy of direct control it has been adopting since the 1990s.
In fact Canada has been the only major international market where a third party distribution deal is still in place for some time - in recent years the company has implemented wholly owned distribution arrangements, instead of third party arrangements in other markets such as Brazil, Australia, Italy and the Sweden.
Deeley has been the exclusive distributor of Harley-Davidson products in Canada since 1973, but their story, and the story of their relationship with Harley-Davidson goes back a lot longer than that - nearly 100 years in fact.
Vancouver based British émigré Fred Deeley Sr and his wife Lizzy Deeley took on the Harley-Davidson line in 1917, making the business that still bears the Deeley name the 4th oldest Harley dealership in the world.
His grandson, Trev Deeley, became General Manager of the dealership in 1953, and was asked by Harley to become the exclusive importer/distributor for Canada twenty years later (while Harley was still owned by AMF).
That import business was set-up by Deeley with Harold Lenfesty, who for a while served as Harley's man in Europe in the mid 1990s, and present Deeley majority owner and Harley board member Don James.
"The contributions of the Deeley organization to Harley-Davidson's customers and the business in Canada have been tremendous, and we have the highest regard for the entire Deeley team," said Harley-Davidson North America Vice President and Managing Director Mike Kennedy. "We have made this decision to transition to direct distribution in Canada after long and careful consideration, and solely growing out of our global business strategy."
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| Don James - co-founder and majority owner of Deeley Harley-Davidson, Canada and a Director of H-D Inc |
Malcolm Hunter, the present Deeley Harley-Davidson Canada President and Chief Operating Officer first got involved with the business in 1976, becoming a VP and partner in Fred Deeley Imports in 1982 says "we have a long and proud relationship with Harley-Davidson, marked by Deeley's commitment to excellence – to our associates, customers and retailers – and that will continue to be our priority throughout the transition."
Trev Deeley was one of the first three "outsiders" to take a seat on the board of the Motor Company when asked to do so in 1985; in 1988 his daughter Dawne Deeley became the 4th generation of the family to join the business.
Trev retired from Harley's board in 1993, the same year he opened the museum that still bears his name and that houses the largest privately owned motorcycle collection in Canada; he was replaced on Harley's board by Don James. Trev Deeley died in March 2002.