Harley-Davidson brushes aside Trump gripes

Harley-Davidson brushes aside Trump gripes

Big-bike maker upbeat on Thai factory, sales

Harley-Davidson riders in Ubon Ratchathani. The US maker is building an assembly plant in Rayong to help meet demand in the Thai market.
Harley-Davidson riders in Ubon Ratchathani. The US maker is building an assembly plant in Rayong to help meet demand in the Thai market.

In a clear sign that iconic big-bike maker Harley-Davidson Motor Co is still optimistic about overseas operations despite objections from US President Donald Trump, the company chose Rayong for its fourth foreign assembly plant.

The others are in Adelaide, Australia; Manaus, Brazil; and Bawal, India.

In July 2017, Harley-Davidson laid the foundation stone at its new facility at Eastern Seaboard Industrial Estate in Rayong.

The facility is expected to serve mainly Southeast Asian markets.

A source who requested anonymity said the Rayong plant began operations a month ago after Harley-Davidson received a licence from the Thai Industrial Standards Institute.

The Milwaukee-based parent firm declined to provide information about investment, production capacity and employment at the new plant.

Local prices adjusted

Last week, a local unit -- Harley-Davidson Thailand -- announced new retail prices for all 2019 models, effective from October.

Country manager Thanabodee Kulthol said the new prices have been adjusted in line with the completely knocked-down (CKD) models made in Rayong.

Prices for the Sportster family start at 479,000 baht, while Softail family models start at 849,000 baht. For the 2018 model year, prices started at 631,000 baht for the Sportster family and 999,000 baht for the Softail family.

"Both variant families are being assembled at the Rayong plant, and it brings the retail prices down by 15-30% when compared with the 2018 model year, which was mainly imported from US plants," Mr Thanabodee said.

The import duty on foreign motorcycles imported into Thailand is 60%, except for Japanese imports, which enjoy a zero duty under the Japan-Thailand Economic Partnership Agreement.

Mr Thanabodee said Harley-Davidson is optimistic about Thailand's big-bike market, which has grown over the past several years.

"We are witnessing customer demand for Harley-Davidson motorcycles in Thailand with confidence in fast and steady growth of the market," he said. "We can respond to the local market now that the prices are more accessible than in the past."

US milestones locally

Harley-Davidson set up its Thailand office in May 2015 with registered capital of 196 million baht.

In early 2016, it opened Harley-Davidson University Asia-Pacific on Rama III Road. The facility, which cost 47 million baht excluding land, serves as a training centre for the company's Asia-Pacific outlets.

The 1,512-square-metre centre was awarded Board of Investment (BoI) privileges, including an eight-year corporate income tax waiver and import duty exemption for motorcycles and related parts.

The assembly plant also won BoI privileges.

Earlier, Harley-Davidson said the Rayong facility would support its long-term strategy to build the next generation of bikes for global riders.

"Harley-Davidson intends to grow our international business to 50% of annual volume by 2027," the company said.

According to the company's news release, Harley-Davidson had worldwide sales in the first half of 2018 of 129,514 motorcycles, down 5.1%.

Of the volume for the period, international business represented 41.5% or 53,715 motorcycles sold, up 0.5% from the year before.

Harley-Davidson is the fourth premium big-bike manufacturer to enter Thailand with an assembly plant, following rivals Triumph (Britain), BMW (Germany) and Ducati (Italy).

The three European makers have been upbeat on the big-bike market in Thailand for the past decade.

In addition, Japanese rivals Honda and Kawasaki run manufacturing facilities for big bikes in Bangkok and Rayong, respectively.

The Federation of Thai Industries reported that the motorcycle sector produced 91,490 big bikes (over 400cc) in the first eight months of 2018, down 11.9% from the same period last year.

Most big-bike output has been exported. The overall value of motorcycle shipments stood at 39.72 billion baht from January to August, up 10.9%.

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