Overview of Harley-Davidson's Production Changes
In 2018, renowned motorcycle manufacturer Harley-Davidson made a significant announcement regarding the future of its production. The decision stemmed from the increasing trade tensions between the United States and the European Union, which resulted in EU tariffs on American-made products, particularly motorcycles. As a response to these retaliatory tariffs, Harley-Davidson revealed plans to move some of its production overseas.
Impact of EU Tariffs on Harley-Davidson
The European Union implemented a series of tariffs on U.S. exports in retaliation for duties imposed by the Trump administration on steel and aluminum imports. This affected many industries, but the iconic Harley-Davidson, which exports a substantial number of motorcycles to Europe, felt the impact directly. The tariffs increased the cost of their bikes by approximately $2,200 for EU customers, leading to a potential decline in sales.
Production Relocation Details
To mitigate the financial burden imposed by these tariffs, Harley-Davidson announced that it would shift some of its production to international facilities. By establishing operations in places like Thailand, the company aimed to avoid tariffs, ensure price competitiveness, and maintain its market presence in Europe and beyond. This was a pivotal moment for the brand, highlighting the direct consequences of international trade policies on American manufacturers.
Reactions to the Announcement
The announcement received mixed reactions from various stakeholders, including customers, employees, and lawmakers. Many loyal customers expressed discontent, feeling that the move betrayed the company’s American roots. On the other hand, shareholders viewed this strategic shift as a necessary step to preserve profits amidst challenging economic conditions.
Customer Backlash and Loyalty
Harley-Davidson has long been associated with American craftsmanship and heritage. A number of enthusiasts took to social media to express their disappointment, leading to calls for a boycott of the brand. This exhibited the potential risk of losing a loyal customer base, as riders and collectors often valued supporting local manufacturing.
Market Strategy Alterations
In light of the tariffs, Harley-Davidson’s decision to expand production abroad also represented a shift in market strategy. The company decided it needed to adapt to the global landscape, considering factors like fluctuating trade regulations, labor costs, and maintaining a competitive edge in international markets.
Fun Fact
Harley-Davidson’s Global Presence
Did you know that Harley-Davidson has operated international manufacturing facilities for several years? Their Thai factory, which started operating in 2018, is part of their strategy to reach a broader market while keeping production costs manageable.
Additional Resources
Learn More About Harley-Davidson's History
To deepen your understanding of Harley-Davidson’s rich legacy, explore these books: Harley-Davidson: The Legend and the Lore and Harley-Davidson: An Illustrated History. Each provides insight into the company’s journey and the challenges it faces.
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