Harley-Davidson plans to set up a new factory in Thailand to avoid the country’s 60 percent tariff on imported motorcycles.
The move comes after the American manufacturer felt the effects of international trade, which set up steep trade barriers and the absence of the Trans-Pacific Partnership, a 12-nation trade deal that would have slashed the tariffs that the Harley-Davidson faced in Vietnam and Malaysia to zero. The Thailand plant is to be opened in late 2018 as a completely-knocked down (CKD) facility where it will assemble bikes using components shipped from the US. The Thai plant will be its second one in South East Asia after India, which it set up in 2011 to get around the 100 per cent tariff set on imported motorcycles in the country.
Harley-Davidson will be at an advantage with its made-in-Thailand motorcycles. They can now avail a huge break on tariffs when exported to Thailand’s neighbors, thanks to a trade deal among the 10 members of the Association of Southeast Asian Nations (ASEAN). It also intends to lower the transport and shipping time to China.
Harley-Davidson sales in the United States fell by 3.9 per cent as compared to its international sales which grew by 2.3 per cent last year and the company hopes to improve its sales overseas even more, thanks to plants like the ones in India and Thailand.