President Trump’s trade war is about to see another player in the motorcycle industry jump ship from American soil, and this time it is heavyweight Polaris Industries.
According to a report by the Minneapolis/St. Paul Business Journal, Polaris is considering moving some of its production capacity to Europe, eyeing a production facility in Poland that would build units for the European market.
The move is a direct response to the retaliatory tariffs imposed by the European Union on motorcycle imports, which itself was a response to the Trump Administration’s taxing of steel and aluminum imports.
“The recent EU retaliatory tariffs have required us to expend time, energy and resources to evaluate mitigation plans, including the possibility of moving production of Indian Motorcycles destined for Europe from Iowa to our facility in Poland,” said company spokeswoman Jess Rogers, in an email to the Business Journal.
This news is of course similar to what we have seen already from Harley-Davidson, as the iconic American brand is set to move to Thailand the 40,000 motorcycles per year it makes in the United States for the European market.
Indian makes far fewer motorcycles for Europe in its various facilities in the USA, but the brand is under tremendous growth, with the European Union a happy hunting ground for the American-styled cruisers.
According to Indian, the tariffs imposed by the European Union will cost Polaris $15 million in 2018, which doesn’t include the added expense from the increased cost of steel and aluminum.
The amount pales in comparison to what the tariff will cost Harley-Davidson – our math indicates that the tariff will mean $200 million in added cost – but it is still a sizable sum for the fledgling Indian Motorcycle brand.
Already facing pricing difficulties in Europe because of the exchange rate on the euro against the dollar, the 25% tariff increase on large-displacement motorcycles (which now totals 31% in added tax) is a tough obstacle for brands to overcome across the pond.
The writing is on the wall for American manufacturing, the day will come when production of American motorcycles for foreign markets will occur outside of the United States.
But what about the day when these iconic American brands are merely “assembled” or worse “designed” in America only?