TOKYO (Kyodo) -- Japan's antitrust watchdog on Thursday ordered the domestic unit of motorcycle company Harley-Davidson Inc. to pay about 211 million yen ($1.4 million) in fines for imposing excessive sales quotas on dealers in violation of the antimonopoly law.

The Japan Fair Trade Commission also issued a cease-and-desist order to Harley-Davidson Japan K.K., based in Tokyo, after some dealers were forced to register themselves as vehicle holders just to meet the quotas.

The dealers made little profit from doing so since the vehicles were sold at lower prices. However, they had no choice but to maintain their relationship with Harley-Davidson Japan, it said.

According to the commission, between January 2023 and August 2024, Harley-Davidson Japan unilaterally imposed quotas on 38 dealers and required them to submit an improvement plan if they failed to meet a certain threshold.

Every January, the company presents the dealers with an agreement containing proposed quotas and forces them to sign it.

Harley-Davidson Japan raised the sales targets by 30 percent for 2023 and 38 percent for 2024, without providing the basis for calculating the quotas. The company also refused to lower the targets when dealers requested it.

When actually selling to customers, these vehicles are treated as "nearly new used cars," forcing dealers to sell them at lower prices. The proportion registered under related parties' names by dealers during the quota period averaged about 29 percent in 2023 and about 34 percent from January to August 2024, the commission said.

Harley-Davidson Japan told Kyodo News that it fully cooperated with the commission's probe and took corrective measures by conducting a voluntary internal investigation.

According to the Japan Automobile Importers Association, Harley-Davidson accounted for 33.3 percent of the number of newly registered imported small motorcycles in 2024, ranking first for the fifth consecutive year since 2020.

Harley-Davidson Japan faces 211 mil. yen fine over heavy sales quotas