Remember a few months back when the United States president Donald Trump decided to impose a new tax over foreign products coming in from Europe, starting what is known as the Trade War? Well, that decision by Trump, has led Europe to retaliate by imposing sanctions on American products, and that has made Harley-Davidson to take a position to reduce its losses.
According to a statement released by Harley, the historic American manufacturer based in Milwaukee has decided to move part of its production away from the United States, in an attempt to reduce the losses created by the new taxes the European Union is imposing on US products, like Harley-Davidson motorcycles.
With factories in Brazil, India, Thailand and Australia, Harley-Davidson hopes to change its production there to face estimated losses of 30 to 45 million dollars just in 2018 because of European sanctions, while next year the company expects losses to reach values of 90 to 100 million dollars!
This is unbearable to Harley-Davidson, and it’s especially important to notice that Europe is the second biggest market for the company, representing 16% of sales, only behind United States.
According to Harley-Davidson, and after moving part of the production outside the United States, it will take them between 9 to 18 months to get production back to normal levels.
It’s not an easy decision for Harley-Davidson, known to for their “American made” motorcycles. But if the company didn’t relocate part of their production, and according to the most recent estimates, the prices on their bikes sold in Europe would raise, in average, around 2200 US dollars, and that could be potentially catastrophic in terms of sales.