Public filings made on June 25, 2018 by Harley-Davidson Inc. have confirmed that in response to recently implemented tariffs the company will be shifting production of motorcycles destined for the European Union to facilities located outside of the United States.
Citing that tariffs, imposed by the European Union effective June 22, 2018, will increase the cost of affected motorcycles by approximately $2,200, the company will undertake this realingment of their production volumes to avoid having to increase retail or wholesale pricing of Harley-Davidson motorcycles in Europe. In the near term, until such time as the alternate production facilities can be prepared for the additional volume, the company will absorb the incremental costs associated with the tariffs, currently estimated to be as much as $100 million annually. The filing indicates that upgrades to these failities will require capital investment and take between 9 and 12 months to complete.
According to Harley-Davidson Inc.’s annual report for the year ended December 31, 2017, the European Union represents the company’s second largest market, with 39,773 units sold in fiscal 2017.
Harley-Davidson Inc.’s June 25, 2018 filing can be viewed by clicking here.
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