Lawmaker, Milwaukee-area residents have mixed reactions to Harley-Davidson decision to some motorcycle production overseas in response to tariffs. (June 26)
In Europe, the Harley-Davidson brand is probably as familiar as Levi jeans or an Apple iPhone, at least in pop culture.
Sure, there are more German, Italian, British and Japanese motorcycles in the European Union, but the Harley brand is associated with America and the freedom of the open road.
Harley-Davidson is the world’s largest manufacturer of heavyweight motorcycles, and it’s been selling bikes overseas for about 100 years, practically since the company was founded in a shed in Milwaukee in 1903.
About 16 percent of all new Harleys are sold in Europe, the company’s second-strongest market behind the U.S. Harley-Davidson has viewed the European Union as a growth opportunity, going wheel-to-wheel with Euro competitors Ducati, Triumph and BMW, whose bikes are especially popular.
That’s why Harley-Davidson said Monday it plans to move production of motorcycles destined for the European Union to its international factories, in Thailand, Brazil and India, in response to 31 percent tariffs the EU has imposed on bikes made in the U.S. It simply has to be competitive, not just well-known.
In 2013, Pope Francis blessed thousands of Harley-Davidsons and their riders as the American motorcycle manufacturer celebrated its 110th anniversary with a loud parade and plenty of leather in Vatican City.
An unnamed European buyer paid 241,500 euros ($327,000) for a bike that Willie G. Davidson, a retired Harley designer and grandson of the company’s co-founder, donated to Pope Francis.
A Harley-Davidson leather jacket signed by Pope Francis sold for 57,000 euros.
The company will flex its European muscles again in a 115th anniversary celebration July 5-8 in Prague, the capital of the Czech Republic.
The biker rally is expected to attract 100,000 people from about 70 countries, many of them riding through the city’s narrow cobblestone streets against a backdrop of medieval architecture and 600-year-old castles.
Harley doesn’t sell a lot of bikes in the Czech Republic, but most of the rally-goers will be from other countries anyway, so the company ought to reach its audience.
But aside from the big events, where many people come for the music and partying, how popular are Harley’s big cruisers and touring bikes in Europe?
The Milwaukee-based company blames retaliatory European tariffs in for moving some of their production overseas.
It depends upon whom you ask, of course, but Mark Hinchliffe, editor of Motor Bike Writer magazine, doesn’t put much stock in the brand and the made-in-the-USA label.
“I think the way that Europeans look at Harley-Davidson is it’s more of a fashion statement than something that’s high-tech and really useful,” said Hinchliffe, who is based in Australia but has decades of riding experience in Europe.
“Germans, Brits and Italians think of themselves as great engineers and technical innovators. They view American-made as big, ugly, old-fashioned and technically inferior,” Hinchliffe said.
“If Harley could get bikes made cheaper in India and send them to Europe, I don’t think that would be a big problem. There’s been no resistance at all to Harleys made in India,” Hinchliffe said.
The company has significant opportunities in Europe, but it’s up against Japanese motorcycle makers that aren’t subject to a 31 percent tariff on bikes coming from Asia.
“Harley’s market share is much lower in Europe, at about 10 percent versus 50 percent in the U.S., so there is more room to grow. But there is also more entrenched competition,” said industry analyst Sharon Zackfia with William Blair Co.
“Like any global business, the uncertainty (of tariffs) is a problem for Harley-Davidson. It is hard to run a business when the rules keep changing,” said analyst Craig Kennison with Milwaukee-based Robert W. Baird & Co.
“We think the Harley-Davidson brand resonates in Europe, but riders have different needs. In key Asian markets, riders also aspire to own a Harley-Davidson — but affordability is an issue,” Kennison said.
Even before the tariffs, imposed on select American products in response to President Donald Trump subjecting foreign steel and aluminum to steep import duties, Harleys were more expensive abroad.
In some Asian countries, the combination of tariffs and other fees could double the price of something like a $25,000 Electra Glide Ultra Classic.
“In addition to tariffs and other fees, Indonesia tacks on a 125 percent luxury tax,” Harley spokesman Michael Pflughoeft said in an email to the Journal Sentinel.
The company’s entry-level motorcycle in France costs 7,490 euros ($8,766), according to the news agency Reuters. A deluxe touring model could cost four times that much.
“You have to be fairly well off to afford one,” said Ian Malone, editor of Biker and Bike magazine in the United Kingdom.
“Harley riders are a different breed here,” Malone said, adding that often they’re “slightly older guys” who returned to riding after raising a family and spending years out of the saddle.
In Europe, you’re either “into Harleys or you’re not,” according to Malone.
“I think Harley-Davidson has a real issue with the tariffs because their bikes were never cheap to buy, and they certainly were never cheap to accessorize,” he said.
He said the Harleys that he sees on the highway are well-equipped with touring luggage, and they’re dripping with chrome from top to bottom.
“These guys get every damn accessory that Harley-Davidson sells, and they cover their bikes with them,” Malone said.
Graham Field, a motorcycle journalist from Bulgaria, has an older Harley that he’s assembled from the parts of several bikes. He also has a garage filled with other bikes that are not Harley-Davidsons.
“I don’t think Europeans in general are so loyal to any one brand. Just the fact that you ride makes you a fellow motorcyclist, and no one’s going to judge you for the make of bike that you have,” Field said.
“The fact that you’ve got two wheels is enough.”
Harley’s next opportunity in Europe could come from its electric motorcycle, expected to be launched in 2019.
Thousands of motorcyclists from around the world have taken test rides on the electric bike that’s been on tour as Harley has gathered consumer feedback.
In 2014 Harley-Davidson had a select group of riders test ride their handmade non-production electric motorcycle named Live Wire at Harley-Davidson Museum bike night. Brenda Kuhl of Beaver Dam shared her opinion.
“I think it will do fantastic in Europe, depending on the price and the competition,” said Robert Pandya, a motorcycle industry veteran who has worked for Polaris Industries, the maker of Indian motorcycles.
“I suspect an electric bike will be adopted faster in Europe,” he said.
Pandya, from Texas, has an electric motorcycle, made by California-based Zero Motorcycles.
“It’s not the bike I put the most miles on, but it’s the one I get on and ride the most when I’m home,” he said.
One thing for sure: Harley’s electric bike won’t have the syncopated “potato, potato, potato” rumble that resonates from the company’s V-Twin engines, a sound the company once tried to trademark.
That might not go over well with some motorcyclists, even in Europe where there’s a lot of pressure to use electric vehicles to reduce carbon emissions and combat global warming.
“For me, the Harley thing has always been about the way they feel and sound. The vibration, good or bad, gives the bike a soul. And the sound is just a wonderful heartbeat,” Field said.
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