Harley is facing a tough time on their home turf. The millennial are more interested in buying Japanese sports bike like the ZX-10R and CBR600RR, instead of an air-cooled V-twin Harley Roadster. The company’s main audience, the baby-boomers are nearing the old age and prefer to ride a car instead of a 500-pound cruiser. As a result company’s sales are down along with its market share. Recently with the advent of a totally unexpected trade war between the United States and the rest of the world has left the company with very few options.Recently US President Trump started a trade war with the EU, Canada, Mexico and China by taxing the goods coming out of their countries like Steel, Aluminum etc. As a result, the affected countries have also started to retaliate by taxing the main products coming out of the USA including Bourbon, Blue jeans and unfortunately Harley-Davidson motorcycles. On an average the taxes will increase almost $2200 on the overall price of the bike, making Harleys harder to compete against the much cheaper Japanese motorcycles.
To avoid the taxes imposed by the EU, the company is planning to shift its production from the US to Thailand. It does not mean that the company will shut down its American facilities. Instead, it will shift the production of Europe bound Harleys to Thailand, thus avoiding heavy taxes and cutting production cost in a single shot. This move has made a lot of people upset including Union workers and the Donald Trump himself. The Union workers are angry with the company as well as the President because not only are their jobs at risk but the upcoming tariff from China will raise the price of everyday household items.
Trump has threatened Harley-Davidson with a potential additional tariff if they plan to shift the production away from the US. He also claimed that the Harleys will lose their soul if they step out of America and will be “Punished” accordingly. What the President fails to realize is that the company will not import bikes for the US from its out-of-country plants, so technically there is no way in which Harley-Davidson can be charged with such a tax.
What do you think about the whole situation? Let us know in the comments.
By: Yetnesh Dubey