W
ow! And double
wow. I was just
beginning to
write this editorial
when a news item
flashed up on my screen. An
item that was run by Reuters,
CNN and TR News.
Let me quote some of it.
“Harley-Davidson strikes deal
to build smaller bike in China.
Harley-Davidson Inc will
partner with China’s Qianjiang
Motorcycle Co to build a new
smaller motorcycle than its
trademark “big hogs”, making
good on promises to move
more production outside the
United States that have angered
President Donald Trump. The
partnership Harley outlined is
aimed both at taking a bigger
chunk of China’s huge bike
and moped market, while also
fitting in with a plan to cut
costs and source half of all sales
outside the United States by
2027.”
Half of all sales outside the
US? “The new bike would have
an engine displacement of
338 cubic centimetres one of
the smallest in the company’s
116-year old history, and would
be sold in China from the end
of 2020. Harley’s existing range
of motorcycles are generally far
larger and come with high price
tags and large engine capacities.
That has made the company
merely a niche seller in Asia’s
big markets, where lightweight
bikes and scooters dominate,
and has left it struggling to
win over consumers globally
to replace a traditional US
customer base, which is aging.
Harley declined to reveal a
price range for the new bike,
but Qianjiang said it would be‘affordable’ and Harley said it
would be introduced elsewhere
in Asia after the initial launch
in China”. A US brokerage
specialist was quoted as saying,
“The international motorcycle
market is huge, but Harley-
Davidson has not been able to
penetrate it with their large/
expensive bikes.”
But the other big news in the
region is the Harley-Davidson
factory in Thailand. “Harley-
Davidson said that it plans
to move manufacturing of
its China-bound motorcycles
out of the US to Thailand this
year to escape Chinese tariffs
levied on American vehicle
imports. They may also shift
some manufacturing to Europe
after similar tariffs levied by
the European Union on US
motorcycles hit the company
hard. Harley-Davidson said
higher tariffs increased costs
by about $21 million for the
January-March quarter, and
may push them up $100 million
to $120 million for the full year.
The EU imposed an additional
25 per cent in import duties
on US motorcycles in June
2018 and China followed suit
in August. The maker’s moves
indicate how companies are
dealing with the ongoing trade
battle. “We plan to supply China
from Thailand by the end of the
year,” CEO Matt Levatich said
this week.
The company does not
disclose its sales for China,
but sold 6074 vehicles across
the Asia-Pacific region, China
included, during the first
quarter, amounting to 12 per
cent of global sales. Previously,
almost all Harley-Davidson
exports to the region camefrom the US with the exception
of India, where the company
has a factory. But a new facility
was set up in Thailand last
year to produce vehicles for
other countries in the region,
including Australia. So what
does this all mean to you and
me? Well, probably not much
at all. If you make a checklist
of all the parts on your “Made
in ‘Merica” Harley-Davidson
it will be a short one. Consider
that the brakes and clutch are
imported from Italy, the pistons
are made in Austria, the bike
suspension comes from Japan,
the cast wheels from Oz and
various electronic components
originate in Mexico and
China. As long as the quality
is maintained it’s a no brainer
really. Oh, and for you Indian
aficionados, Polaris recently said
it was considering moving some
production to Poland. Polaris.
Poland. Sounds kinda logical.
Interesting times indeed.- Doc
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NEWS & EVENTS
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