I started thinking about your (very good) question Saintex. I think motorbike dealerships (and car dealerships) are very different to the sort of distriibutor arrangements which Shiro deals in. most notably the level of physical and financial investment to open a dealership has no counterpart for distributorships like Shiro (i think). While that creates a risk for the distributor/retailer - due to their large sunk investment - it also effectively ties in the manufacturer/wholesaler as it is slow, and expensive to set up an alternate shop. You need a site, fit-out, product, staff, and to establish a significant clientele. The manufacturer/wholesaler risks losing market share if it alienates (or loses) the sales channel and it will be hard to replace and hard to replace quickly.
Further, there is a geographical element to motorbike shops. you can't have too many shops in an area or they won't be viable. I note in this regard, that MTO has mostly bought (IIUC) existing dealerships, with only a small number of new sites, to grow its share of the retail motorbike market. (the bailment finance arrangements - also create some tie in - but mostly towards the retailer sticking with the manufacturer, not the other way around).
all of this, creates, I think, some considerable mutual dependence between manufacturer/wholesaler and distributor/retailer. And I note for example there are examples of very long distributor relationships in the car retailing market (stretching back multiple decades in many instances).
I also had a look back thru the MTO prospectus, a few things I'd forgotten:
1. scale benefits including improved terms fromsuppliers as a result of volume discounts appliedacross various product lines and the abilityto amortise overheads over a larger numberof dealerships; I understand the scale discounts are very significant and note that "improved terms from suppliers as a resultof volume discounts applied across variousproduct lines" is identified as the first benefit under the heading "Benefits of scale".
2. MotorCycle Holdings has staggered the expiry term of the Franchise Agreements
3. Some (but not all) of the Franchise Agreements grant MotorCycle Holdings the right to exclusively sellmotorcycles manufactured by the relevant manufacturer in a designated area.
4. BUT: a "small number of Franchise Agreements are on a month-to-month basis" and "A small number of Franchise Agreements may be terminated by the manufacturer without cause". HHHmmmm.
in practice, though, like the car industry, relationships are very sticky and enduring. the table below (an extract only) was from the prospectus - note the long tenure. I'm not aware of that any distributorships have been lost (a quick check says they endure, but I haven't checked thoroughly).
(20min delay)