Harley-Davidson ($HOG) to Move Some Production From U.S. Because of E.U. Tariffs

[dandelion10]

Source: https://www.nytimes.com/2018/06/25/business/harley-davidson-us-eu-tariffs.html

Last week, the European Union imposed penalties on $3.2 billion worth of American products, many of which are produced in areas that form the heart of President Trump’s political base, in response to steel and aluminum tariffs added by the White House...

Harley-Davidson said on Monday that European Union tariffs on its motorcycles had increased to 31 percent, from 6 percent. It estimated that the higher tariffs would add about $2,200 on average to every motorcycle exported from the United States to the bloc, so it said it would move the production of bikes bound for Europe outside the United States.

 

[authorrobsigmon]

@dandelion10 As if those bikes couldn’t get anymore overpriced.

 

[mustang4christ]

@authorrobsigmon

2,200 on average

Seems lows, I thought they were 25K bikes, a jump from 6 to 31% should be around 6K increase

 

[salwaite]

@mustang4christ The vast majority of their models cost well below $25k and I imagine the ones that sell in Europe aren't the huge interstate touring models. Using financial reports in 2017 the global average price per unit was $15,800. The number seems low, but not crazy low.

 

[leeabc]

@salwaite $15k for a bike ain't cheap.

 

[wina22]

@leeabc Paid $600 for my 454LTD.

 

[salwaite]

@leeabc No, but that's the average which gets pulled up by the huge souped up models. They start below $7k which is pretty cheap (you can easily pay more for a bicycle).

 

[resjudicata]

@mustang4christ Greatly oversimplifying but you have two lines - cruise or tour. Cruisers (including their "entry" sport bikes) range from 9k-17k, then anything touring is ~20k+. People associate hogs as being expensive because the tour models ARE expensive since you're getting an established brand's 2 wheeled freaking mobile home with a leather couch as a backseat. The Indian equivalents are all about the same price, some more some less but pretty similar

The price differences in bikes are really no different than the car market...Honda( or other asian brands) = cheap, "American-made" or German-engineered = expensive. All about what you like though, I've ridden and enjoyed them all

 

[summer37087]

@mustang4christ The 2.2k corresponds to a 25% increase on their entry level bike, which is also their most popular. See https://www.reuters.com/article/us-...se-prices-to-cover-tariff-costs-idUSKBN1JL185

" Harley’s entry-level bike in France currently costs 7,490 euros ($8,766)."

Not sure how the 2.2k is an average, but it may involve certain tax incentives, etc. that nullify some of the tariff?

 

[shawn158]

@authorrobsigmon In the worldnews thread people were saying that the tariffs is just an excuse for them to move production to low cost countries. They want their bikes to be cheaper because they want to target millennials more apparently.

Not sure how much truth there is in it, but I guess it makes some sense to do it now.

 

[jesusismylord77]

@shawn158

they want to target millennials more apparently

That's going to be tough if they want to sell them under the "Harley Davidson" brand.

 

[kevitho]

@authorrobsigmon That's what "made in USA" gets you

 

[resjudicata]

@authorrobsigmon Doesn't matter when you're a biker gang member.

 

[resjudicata]

@authorrobsigmon Well, moving production out of the states will likely bring the prices of bikes down once the tariffs die down.

 

[resjudicata]

@authorrobsigmon For real. I want one. But damn

 

[mike97]

@dandelion10 Who knew international trade was so complicated?

 

[walkman1943]

@mike97 Nobody knew international trade could be so complicated.

 

[resjudicata]

@walkman1943 People have said, very smart people, that NOBODY knew international trade could be so complicated.

 

[emeros]

@resjudicata Trade wars are good, and easy to win.

 

[arianwen]

@emeros As long as we hurt their economy more than we hurt our economy, then that is a win. Right?