The Japanese Harley-Davidsons

The early history of Harley-Davidson in Japan is little known in the West, but the complex relationship with its #2 export market in the 1920s (after Australia) is fascinating.  Relations between the Motor Co. and its Japanese subsidiary became very contentious in the 1930s, as the Japan transformed into an aggressive Imperial power, with a militarized, nationalist, and protectionist political system.

Harley-Davidsons first began trickling into Japan in 1912, when the Japanese Army purchased a small contingent of machines for study, but oddly, they never requested any spares.  More machines were ordered in 1922, by the Tokyo import company Nippon Jidoshe KK, headed by Baron Kishichiro Okura, who was among the first to import cars into Japan.  Okura spoke excellent English, as he was educated at Trinity College, Cambridge: he even participated in the very first automobile race at Brooklands in 1907, where he won 2nd place!  Okura’s company ordered a few ‘J’ model Harleys, in 1922 and a few dozen more in the following two years, but also never purchased spares with his bike orders, which confounded the H-D brass.  This, plus a large order from Outer Mongolia, also without a spares supplement, spurred H-D to send Alfred Rich Child to sort out the Japanese situation in 1924.  One of Harley-Davidson’s earliest credos was dealer support and spares availability, and its Japanese dealers were not following the company’s guidelines.

Negotiations with Baron Okura (the semi-official importer) to set up a proper H-D import scheme were a failure, but while in Japan, Child befriended Genjiro Fukui, US-educated and a wealthy founder of the prestigious Sankyo Pharmaceutical Company.  Fukui ran an import/export division of Sankyo, the Koto Trading Co., which had been selling ‘bootleg’ import Harleys, brought into Japan from the Outer Mongolian shipments, and sold under Baron Okura’s nose.

Since no love was lost between Child and Okura by this point, and a friendship blossomed between Child and Fukui, and since Fukui’s Koto Trading Co. had set up a successful Harley-Davidson import and sales organization, it seemed natural that Alfred Child join forces with Fukui.  They set up the Harley Davidson Motorcycle Sales Company of Japan in 1924, with Fukui/Sankyo providing investment capital, and Child as Managing Director, whose ‘cut’ was 5% of gross sales in Japan. Their initial order included 350 H-Ds, each with a sidecar (three-wheelers having been found extremely useful as utility vehicles in Japan, after the 1923 Great Kanto Earthquake), plus $20,000 in spares, and $3000 of factory repair tools.  As Sankyo already had pharmaceutical contracts with all branches of the Japanese military, Harleys were suddenly required  for all manner of police, military, and Imperial Escort duties.  The new venture was very successful, selling about 2000 bikes/year.

In common with the American parent factory, H-D Japan hired professional motorcycle racer Kawamada Kazuo (who later became president of Orient Motors), after Alfred Child watched him win a 350cc race at Naruo in 1925, coming 4th in the 1200cc race on his Harley.  “An American came up an hit me on the shoulder. ‘Would you like to come and work at the Harley-Davidson sales office?’ he asked.  I jokingly replied, ‘Will you pay me Y100 a month?’ but I left for their Tokyo office for a visit anyway.  At that time the monthly salary at a private university was Y28…Alfred Child said, ‘Depending on your results, we’ll pay you Y100 a month,’ so I joined the company.  A week later I won first prize at Shinshu Matsumoto City Race, riding a 1200cc Harley Davidson, and they did indeed pay me Y100…”

After the global economic crash of 1929, the Yen was devalued by half; this combined with new import tariffs made importing any foreign-built vehicle nearly impossible. With the price of Harley Davidsons suddenly more than doubled, Child reasoned the only future for Harley in Japan was to license the outright manufacture of H-Ds to a Japanese company: his company.  He sailed in 1929 to Milwaukee, with a representative of the Sankyo Co to discuss a deal, armed with an undisclosed cash payment (reputedly $75,000) from Sankyo.  This stunned the Harley-Davidson management, who granted exclusive rights to manufacture H-D bikes and spares in Japan to the HDMSCoJ.  That reputed $75,000 payment from Sankyo, in the worst year of the Depression, probably saved Harley-Davidson from bankruptcy, and was a company secret for generations.

In return for these rights, Childs promised never to sell Japanese-built Harleys or spares outside Japan [The same situation is established by H-D in India today, with H-D factories making bikes in-country, which are never seen in the USA].  Childs brought motorcycle industry veteran and H-D employee Fred Barr with him to Japan, to set up a new factory in Shinagawa (Tokyo), using H-D tooling, processes, and blueprints to build parts and machines to exact specifications.  No other Americans were sent, and none were ever employed. Production began in 1932, and no mention was ever made of this unique agreement in the American press, nor was it publicly discussed by Harley Davidson until the 1980s.

The first Japanese Harley-Davidsons were built in 1935, the 1200cc Model ‘VL’, and were branded the Harley Davidson ‘Rikuo’ (Road King) model.  Their #1 customer was the Japanese military, who were rapidly expanding their arsenal under aggressive Imperial politics.  Complications emerged in 1936, when H-D sent a prototype Model EL ‘Knucklehead’ for testing in Japan, and the home factory pressured H-D Japan for higher licensing fees.  After test-riding 400 miles on the ‘Knuck’, Alfred Childs’ son Richard felt the machine was unsuitable for the Japanese market, and not ready for production.  Sankyo was unhappy with both the licensing pressures and the new bike, so the company sent its New York representative, Mr. Kusanobu, to pay a heavy-handed visit to the H-D Board in Milwaukee.  He complained of Childs’ 5% commission (which made him a wealthy man) and the increased licensing fees, and insisted Childs be removed from the Board, or Sankyo would cease financing H-D imports into Japan.  Not only that, but the existing range of sidevalve machines would now be sold simply as the ‘Rikuo’, with no more licensing paid to Harley at all.  Kusanobu was nearly thrown out on his ear, but he delivered on his threats. In 1936, Rikuo was re-born an independent marque, with no connection to Harley-Davidson, barring its design.  As compensation for Childs’ loss of a lucrative business, Harley-Davidson made him the exclusive H-D importer for Asia (Japan, Korea, North China, and Manchuria): he had, after all, saved the company’s bacon with the 1929 deal.

Of course, Child’s new job description didn’t last long. With the Japanese military increasing their grip on both government and industry, agreements with foreign companies operating factories on Japanese soil were voided.  The military encouraged/supported other factories to make H-D copies, without paying licensing fees to H-D.  Japanese companies Kurogane, Aikou, Toko Kogyo, and SSD all produced H-D clones by 1937, with production almost exclusively destined for the military.  In August 1937, Japan invaded China, and Alfred R. Child was warned to leave Japan immediately.  He might have lost everything, had his friend Mr Fukui not purchased Childs’ homes, businesses, and his remaining H-D stock.  By 1939, Ford, Chrysler and General Motors were in the same boat, with all American employees forced to leave Japan, their companies effectively nationalized by the military, with no compensation to their American owners.  Rikuo produced 18,000 ‘VL’ models through 1942, which is about the same as Harley-Davidson’s production of the same model!   In 1942, Rikuo switched to making torpedos, but after the war, in 1947, they resumed production of the old 750cc WL sidevalve model, and in 1950 the resumed the 1200cc sidevalver too.  Rikuo continued production on these pre-War machine until 1962, when Harley-Davidson once again established a dealership network in Japan.

Information and photographs for this article were sourced from 3 excellent books:

– ‘A Century of Japanese Motorcycles’, by Didier Ganneau and Francois-Marie Dumas, which is to date the only comprehensive English-language book covering all years of the Japanese motorcycle industry.  Given the market dominance of Japanese motorcycles since the 1960s, this is a remarkable poverty of books, compared to every other nation’s motorcycling contribution.  Photos scanned from here are listed as (Iwatate).  It’s a must-own book!

– ‘Japan’s Motorcycle Wars’, by Jeffrey Alexander, was reviewed in The Vintagent here.  An excellent dissertation, admittedly not a ‘bike book’ per se, but full of good stuff.

– ‘Harley Davidson’ by Harry Sucher, for the Rikuo story; the first complete history of the H-D marque, with much info from people who were still alive in the early days.  Extremely informative.  Photos listed as (Sucher).