Harley-Davidson’s Operations in Europe Threatened by Retaliatory Tariffs from the EU – Freedonia Analysis

Freedonia logo

Harley-Davidson is by far the largest manufacturer of motorcycles in the US

CLEVELAND, OH – June 27, 2018 – (Motor Sports Newswire) –  In June 2018, the EU imposed retaliatory tariffs on the US in response to the Trump Administration levying a 25% tariff on steel and a 10% tariff on aluminum made in the EU. The new tariffs target motorcycles and a number of other strategically important products to US manufacturers.

The new measures raise tariffs on US motorcycles sold in the EU from 6% to 31%, which for Harley-Davidson adds approximately $2200 to the final cost. In response to the new tariffs, Harley-Davidson announced that it would not raise prices in Europe but would instead shift a portion of its production operations outside the US in order to mitigate the impact of these new measures. Europe represents the largest market for Harley-Davidson motorcycles outside the US, and the relocation of manufacturing is seen as a better long-term solution to sustaining the company’s business ventures in the area. In 2017, Harley-Davidson sold approximately 40,000 motorcycles in the EU, representing 16% of its total sales.

Harley-Davidson is by far the largest manufacturer of motorcycles in the US, responsible for around 80% of the country’s total motorcycle production in 2017. However, falling motorcycle sales in the US, due in part to rising competition with companies like Honda and Yamaha and an aging population and changing consumer trends among younger generations has led Harley-Davidson to focus more outside of the US. As a result, the company has been active in expanding its geographic reach, which has led to the opening of assembly facilities in Brazil and India, as well as plans to build a factory in Thailand. The EU’s retaliatory tariffs on US produced motorcycles represent another reason to move production out of the US, and this shift has the potential to have a profound impact on the viability of the US motorcycle industry in both the near- and long-term.

For more information on motorcycle trends and forecasts, see Freedonia Group’s Global Motorcycles study or download the new white paper Growth Opportunities & Recommendations in the Global Motorcycle Market

About The Freedonia Group

The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, and market share information. Studies can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.

Press Contact:
Corinne Gangloff
+1 440.684.9600

Source: The Freedonia Group

Freedonia logo