This week, Harley-Davidson announced a sizable 27 percent decline in earnings for the first quarter, the umpteenth quarter of slumping sales for the Milwaukee motorcycle maker. Harley CEO Matt Levatich pointed a hard finger at European taxes that have been slapped on his company, believing them to be a retaliatory result of President Donald Trump’s battle with the European Union over tariffs on EU goods coming into the U.S.
Levatich cited “unfortunate” larger levied tariffs on both imported raw materials and on sales of Harleys within Europe, which is a sizable market for the American brand. The taxes for the motorcycles leapt from 6 percent to 31 percent and is scheduled to hike up to 56 percent again in June of 2021, according Forbes.
“We’re pursuing our strategy to get to the European marketplace through our international manufacturing footprint,” Levatich reportedly said. “Clearly this is an imperative for us as a business and we’ll continue to execute that strategy unless or until circumstances change.”
While Levatich was careful not to mention Trump’s name in connection with the tariff war, the president has directly delved into Harley-Davidson’s business in the past. After pointing to Harley Davidson as a company that stood with him, Trump reversed his stance and told consumers to boycott the motorcycle company this past August after it moved some U.S. production to Thailand, claiming Trump’s tariffs had forced that unwelcome decision.
While the U.S. heavyweight motorcycle industry is in an overall slump, Harley-Davidson still enjoys just over 50 percent of the marketshare. The company has been gaining a little of the market in Europe over the past six months, and represents about 10 percent of the European market.
Still, Harley’s problems are numerous, and sales have been declining steadily for several years as the brand struggles to find traction. An aging consumer base and the company’s inability to tap into new, younger buyers have left the company pursuing all avenues of possible growth, including electric motorcycles. Harley announced the first of five electric models, called LiveWire, but a high retail price of $30,000 will likely curb appeal and sales to the audience Harley desperately seeks.