Harley-Davidson bypasses penalty tax: European models come from Thailand

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Harley-Davidson bypasses penalty tax: European models come from Thailand

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Harley-Davidson bypasses penalty tax: European models come from Thailand

Harley-Davidson bypasses penalty tax
Europe models come from Thailand

Harley-Davidson plans to assemble its models for the European market almost exclusively in its plant in Rayong, Thailand, which opened in 2019, as early as 2020. This is to circumvent the penalty tax for US imports.


Michael Schumann

02/14/2020

Both Matt Levatich as president of the company and Harley CFO John Olin told US stock market analysts at the end of January, read in a transcript of the “earnings conference call” of January 28, 2020, published on the website of the US stock exchange Nasdaq.

According to Harley CFO Olin, the US manufacturer expects the announced step to save around 70 million US dollars (the equivalent of almost 65 million euros) this year alone. However, these should not come about because the final assembly of the Harleys, which are delivered as parts sets from the USA to Asia, would be so much cheaper in Thailand. Rather, Harley is concerned with circumventing the punitive tariffs of currently 25 percent on EU imports from the USA that have been due since mid-2018.

Sales still cost a fine of $ 20 million

Levatich and Olin unanimously stated that the EU had already agreed to a corresponding application by the US company not to impose any punitive tariffs on Harleys imported from Thailand. CFO Olin further stated that Harley-Davidson Expect EU punitive tariffs of $ 20 million for 2020, namely on “Sales of high-duty inventory and punitive tariffs on CVO Harleys and Trikes, which we will continue to produce in the United States”.

This suggests the reverse conclusion that apart from the tricycles and the small number of handcrafted CVO special models, all other Harleys intended for sale in the EU will come from Thailand in 2020. German and international Harley representatives did not want to deny or confirm this when asked by MOTORRAD.

Harley-Davidson sold exactly 218,273 new motorcycles worldwide last year. Of these, 125,960 Harleys were newly registered within the USA. In Europe, Harley sold 38,441 machines from January to December, a good quarter of them in Germany.

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