Harley Davidson’s new Thailand plant comes at the right moment

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Harley Davidson, the US motorcycle maker which will open a new plant in Thailand later this year, retrospectively has made the right decision at the right time.

The plant, which was initially designed to supply the Southeast Asian market to avoid high import tariffs of foreign-made motorcycles in the Association of Southeast Asian Nations (ASEAN), will now add capacity to circumvent new tariffs on US-made goods that the European Union (EU) imposed after US President Donald Trump started to do the same with EU exports to the US.

When the plan to set up a manufacturing facility in Thailand was first announced last year, Harley Davidson’s management said that the expansion into Thailand was a “business necessity” in accordance with the formula “move the business where the customers are.”  It, however, also had to do with Thailand imposing 60 per cent tariffs on motorcycle imports. By assembling its bikes in Thailand, Harley Davidson is also able  to ship more bikes to other regional markets without facing similar tariffs because of trade agreements between the ASEAN member countries.

Harley Davidson is in fact a good example the inconsistency of Donald Trump’s policies: While the company benefits from Trump’s new corporate tax plan, it still has to outsource work to foreign countries because of the EU retaliation on import taxes, caused by Trump.

The US labour union has been particularly critical about the move to Thailand, while Harley Davidson at the same time closed its factory in Kansas City.

Executives of Harley Davidson defended the move to step up production in Thailand once the factory is running, saying they had no choice after the EU hit US motorcycles with duties of 31 per cent, up from six per cent, boosting the cost for a Harley bike for EU consumers by about $2,200 each.

The Thailand plant will assemble bikes from components produced at the company’s US facilities, according to Harley. Imported components are not taxed to the same degree like complete motorcycles in Thailand. The factory will is currently being constructed in Rayong province, southeast of Bangkok.

Harley opened a plant in India in 2011. It also assembles motorcycles at a plant in Brazil and produces bikes in a plant in Adelaide, Australia, but this site will be closed next year as demand in Down Under has been falling in recent years.

 

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Reading Time: 2 minutes

Harley Davidson, the US motorcycle maker which will open a new plant in Thailand later this year, retrospectively has made the right decision at the right time.

Reading Time: 2 minutes

Harley Davidson, the US motorcycle maker which will open a new plant in Thailand later this year, retrospectively has made the right decision at the right time.

The plant, which was initially designed to supply the Southeast Asian market to avoid high import tariffs of foreign-made motorcycles in the Association of Southeast Asian Nations (ASEAN), will now add capacity to circumvent new tariffs on US-made goods that the European Union (EU) imposed after US President Donald Trump started to do the same with EU exports to the US.

When the plan to set up a manufacturing facility in Thailand was first announced last year, Harley Davidson’s management said that the expansion into Thailand was a “business necessity” in accordance with the formula “move the business where the customers are.”  It, however, also had to do with Thailand imposing 60 per cent tariffs on motorcycle imports. By assembling its bikes in Thailand, Harley Davidson is also able  to ship more bikes to other regional markets without facing similar tariffs because of trade agreements between the ASEAN member countries.

Harley Davidson is in fact a good example the inconsistency of Donald Trump’s policies: While the company benefits from Trump’s new corporate tax plan, it still has to outsource work to foreign countries because of the EU retaliation on import taxes, caused by Trump.

The US labour union has been particularly critical about the move to Thailand, while Harley Davidson at the same time closed its factory in Kansas City.

Executives of Harley Davidson defended the move to step up production in Thailand once the factory is running, saying they had no choice after the EU hit US motorcycles with duties of 31 per cent, up from six per cent, boosting the cost for a Harley bike for EU consumers by about $2,200 each.

The Thailand plant will assemble bikes from components produced at the company’s US facilities, according to Harley. Imported components are not taxed to the same degree like complete motorcycles in Thailand. The factory will is currently being constructed in Rayong province, southeast of Bangkok.

Harley opened a plant in India in 2011. It also assembles motorcycles at a plant in Brazil and produces bikes in a plant in Adelaide, Australia, but this site will be closed next year as demand in Down Under has been falling in recent years.

 

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