Curious about when Harley Davidson decided to make the leap overseas? The timing of this strategic move might surprise you.
The reasons behind their decision shed light on the complexities of global trade dynamics and corporate strategy.
Stay tuned to uncover the pivotal moment that led to Harley Davidson expanding its production beyond U.S. borders, and the implications it had on the iconic brand's legacy and market presence.
Key Takeaways
- Harley-Davidson initiated overseas production transition in response to EU tariffs on U.S.-made motorcycles.
- Transition anticipated to last 9 to 18 months utilizing existing plants in India, Brazil, and Thailand.
- The move aimed to prevent higher prices for European customers by absorbing additional costs.
- The decision was made public in June 2018, signifying a strategic shift to sustain competitiveness in the European market.
Harley-Davidson's Overseas Production Beginnings
Harley-Davidson's shift towards overseas production began as a strategic response to the imposition of EU tariffs on motorcycles made in the U.S.
In an effort to navigate the challenges posed by these tariffs, Harley-Davidson decided to move the production of motorcycles intended for the European market to its international facilities.
This production shift, estimated to span between nine to 18 months, signifies a significant strategic move for the company.
With existing assembly plants in countries like India, Brazil, and Thailand, Harley-Davidson is well-positioned to execute this transition effectively.
Factors Influencing Harley-Davidson's Decision
The pivotal factor that drove Harley-Davidson's decision to shift production overseas was the substantial increase in EU tariffs on motorcycles exported from the U.S. This decision was influenced by the need to offset the incremental cost per average motorcycle exported to the EU, which was estimated to be around $2,200. Shifting production to international facilities was deemed necessary to avoid passing on the increased costs to customers in Europe. Additionally, the move to shift production overseas was a strategic response to the escalating trade tensions and retaliatory tariffs imposed by the EU. By making this decision, Harley-Davidson aimed to navigate the complexities of international trade regulations while maintaining competitiveness in the global market.
- EU Tariffs Increase: Ranging from 6% to 31%, the rise in tariffs significantly impacted Harley-Davidson's export costs.
- Incremental Cost Concerns: The estimated $2,200 increase per motorcycle prompted the need for a production shift.
- Customer Price Considerations: Shifting production aimed to prevent higher prices for European customers.
- Global Trade Dynamics: The decision was influenced by escalating trade tensions and retaliatory tariffs.
- Strategic Response: Moving production overseas was a strategic maneuver to address EU tariff challenges effectively.
Timeline of Harley-Davidson's Overseas Move
Amidst the escalating trade tensions and increased EU tariffs, the timeline for Harley-Davidson's shift of production overseas began with the announcement in June 2018. The decision to move production abroad was driven by the need to respond to the tariffs imposed by the European Union on U.S.-made motorcycles. The production shift to international facilities is projected to span between nine to 18 months for completion. While specific U.S. factories affected by the move were not disclosed by Harley-Davidson, the company has traditionally manufactured motorcycles domestically in the U.S. However, in recent years, Harley-Davidson has been gradually expanding its production to international plants located in countries such as India, Brazil, and Thailand.
| Timeline Events | Description | Date |
|---|---|---|
| Announcement of production shift | Harley-Davidson reveals plans to shift production for the European market overseas | June 2018 |
| Response to EU tariffs | Decision to move production abroad in reaction to increased EU tariffs on U.S.-made motorcycles | June 2018 |
| Estimated duration for the shift | Projected timeline for completing the production shift to international facilities | 9-18 months |
Stay tuned for more insights into Harley-Davidson's overseas move in the upcoming sections.
Impact of Harley-Davidson's Shift
With plans underway to shift production overseas, Harley-Davidson faces a significant impact due to increased EU tariffs on its motorcycles for the European market. The company's decision to move production abroad is driven by the necessity to navigate the challenging trade landscapes and maintain competitiveness while ensuring sustainability.
The impact of the 31% tariffs is substantial, with an estimated yearly cost of around $100 million, translating to an additional $2,200 per motorcycle. This shift signifies a strategic move to mitigate the effects of the tariffs and adapt to the evolving market conditions.
- EU Tariffs: Increased tariffs are a primary driver for Harley-Davidson's decision.
- Cost Implications: The tariffs are expected to add $2,200 to the cost of each motorcycle.
- Competitiveness: Shifting production overseas is crucial to stay competitive in the European market.
- Sustainability: This move is deemed necessary for the long-term sustainability of the company.
- Adapting to Change: It underscores the importance of adapting to changing trade landscapes for business success.
Reaction to Harley-Davidson's Global Strategy
In response to Harley-Davidson's decision to shift production overseas due to increased EU tariffs, industry analysts are closely monitoring the reactions from stakeholders. The global strategy employed by Harley-Davidson to maintain competitiveness in the European market has sparked mixed reactions. While some stakeholders acknowledge the necessity of the overseas move to absorb the impact of the additional costs imposed by the EU tariffs, others express concerns about the long-term implications on the brand's identity and American manufacturing roots.
Harley-Davidson's decision to shift production for the European market reflects a strategic approach to navigate the challenges posed by the tariff increases. By absorbing an estimated $90 to $100 million in annual impact, the company aims to mitigate the financial burden caused by the EU tariffs. Despite the short-term adjustments, the move underscores the company's commitment to sustaining its presence in the European market and fostering competitiveness amidst evolving trade dynamics.
As industry analysts continue to evaluate the implications of this global strategy, the reactions from stakeholders will play a crucial role in shaping the narrative surrounding Harley-Davidson's overseas production shift.
Conclusion
In conclusion, Harley-Davidson's decision to move overseas was driven by the need to offset increased tariffs from the European Union.
While some may argue that this move impacts American jobs, the company had to prioritize its European market presence to remain competitive.
By shifting production internationally, Harley-Davidson can continue to serve its customers in Europe without facing significant cost burdens.
This strategic move ensures the company's long-term success in a changing global market.
