Yahoo Finance 
Harley-Davidson warns European tariffs will cause a 'tremendous cost increase' (HOG)
Scott Olson/Getty Images)
Harley-Davidson said Monday that new European taxes on imported motorcycles will have a "significant impact" on its business, increasing the cost of motorcycles by $2,200 on average.
Harley-Davidson also plans to shift building of EU-bound motorcycles outside of the US.
Shares of the company fell more than 6% following the regulatory filing.
European tariffs imposed as retaliation for President Donald Trump’s taxes on imported steel and aluminum will add about $2,200 on average to the cost of every Harley-Davidson motorcycle exported to the continent, the company said Monday.
"Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers’ businesses." the company said in a regulatory filing.
"Therefore, Harley-Davidson will not raise its manufacturer’s suggested retail prices or wholesale prices to its dealers to cover the costs of the retaliatory tariffs. In the near-term, the company will bear the significant impact resulting from these tariffs.
Harley-Davidson sold 39,773 motorcycles in Europe in 2017, it said in its annual report. By comparison, it sold 161,658 motorcycles in the US during the same period.
The company expects the tariffs to have an impact of approximately $30 million to $45 million in 2018, and rising to $90 to $100 million on a full-year basis going forward because of the tariffs. To help mitigate some of the costs, the company also said it "will be implementing a plan to shift production of motorcycles for EU destinations from the US to international facilities." However, that could take up to 18 months to complete.
Shares of the company fell more than 6% following the filing.
Monday's news comes roughly a year into Harley-Davidson's "The Journey" program. Launched in 2017, the 10-year strategy is designed to return Harley-Davidson to is former glory by converting more riders, launching new motorcycles, and consolidating some of its manufacturing locations.
Shares of Harley-Davidson are down more than 20% from their January highs as global fears of an all-out trade war and their resulting impact on commodity prices for raw metals weigh on the stock's price.
Markets Insider
NOW WATCH: Why Apple is having so many problems right now
See Also:
