The recent stand-off between US President Donald Trump and legendary American cruiser manufacturer Harley Davidson has brought out a slew of options that might be possible in the near future. One among them is Harley setting up a full-fledged manufacturing facility in India. So, here is the key takeaway from the Trump-Harley row.
During the start of this year, Harley Davidson announced that it might shift most of its production processes outside the United States – especially to Europe – where it has witnessed considerable sales hike. While the American President didn’t welcome this move, the issue died down subsequently.
But when Trump recently announced a new policy wherein the import duty on aluminium and steel products from the European Union has been increased, the Europeans, too, increased the duties on all American products including Harley Davidson motorcycles imported into their countries. This gravely affected all home-grown manufacturers.
This move made sure Harley was firm in its stand of moving out of USA. But, in a recent interview to Fox News, Trump made some open statements against the brand. He said, “I have a feeling that maybe Harley, I think they’re going to take a big hit. I just think it’s a great American product. Our people have more pride than they used to have. I really believe that Harley’s going to take a hit – the people that are buying Harley-Davidson, they don’t want it built in another country.”
Referring to India’s high import duty policies, he accused the American motorcycle maker of using tariffs as an excuse to produce more bikes overseas. “I think I taught them more about tariffs than I could ever learn. I was saying, let me ask you a question. How much do you pay in India? One hundred per cent. Oh, really? Do you do much business? No. Why? Because the tariff’s too high,” he said.
In February, Trump had said the Indian government’s decision to reduce the tariff on Harley-Davidson motorbikes from 75 per cent to 50 per cent was not enough and asked that it should be reciprocal, as the US imposes zero tax on the import of motorcycles. “I’m the one telling them. I said, that’s a shame. I got them to reduce the tariffs in India, because I used that as an example. All of the sudden, Harley leaves. Everyone else is coming in,” he added.
While these things may sound irrelevant for the Indian motorcycle enthusiasts, there is more to it than meets the eye. It’s inevitable to say that in the middle weight segment between 500 and 800 cc, Harley sells more motorcycles than Royal Enfield. The Street 750 consistently sells over 1,000 units while the Continental GT 535 from Royal Enfield is soon going to be discontinued due to lack of buyers.
Even after Trump’s warning, Harley is firm in its move. It also recently said shifting targeted production from the US to international facilities could take at least nine to 18 months to be fully completed. While it will concentrate more on Europe, an Indian expansion might definitively be in the pipeline. At a time when Suzuki and Kawasaki are enjoying the fruits of assembling their Hayabusas and ZX10Rs here in India, a Harley fully made in India will further turn the tide towards the premium cruiser segment of the country.