Indian government is also planning to do this similar thing as we can expect a 50 percent additional import tax on CBU models above 800 cc from America
Politics plays an important part in growth of automotive industry and manufacturers. For American brands, things are not looking good right now as Trump government trade war against countries is seriously affecting growth. Recently, US government decided to impose tax on aluminium and steel which is not good for Europe and Asian countries.
Inorderd to fight back against US government action, European Union announced a 25 percent hike in import tax for all 500 cc motorcycles imported from American. This decision will impact sales of Harley Davidson and Indian Motorcycles. Indian government is also planning to do this similar thing as we can expect a 50 percent additional import tax on CBU models above 800 cc from America.
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If Trump government won’t change their attitude then things will go from bad to worst for American manufacturer. Even though America is still the biggest market for Harley Davidson, sales are not looking great for them. In recent years, Harley Davidson is constantly reporting negative growth in US market.
In 2017, the company has sold 1,47,972 units from previous year’s 1,68,240 which is a drop of 12 percent. The American manufacturer was expecting other markets to tally the loose of home market share. In Europe, sales are increasing by each year and the company recorded 8.3 percent growth in 2017 and sold 39,773 units.
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For Indian Motorcycles, it is much better as they are registering good growth in home market and European market is not providing much sales for the company. This new import duty structure could reduce the growth in Europe for Harley Davidson. But in India, it is the other way around as most of the Harley Davidson models are manufactured in India and this rule won’t affect them much but Indian Motorcycles imports its entire portfolio.
The recent import cut helped all premium motorcycles brands in India and sales are improving every month but the new rule could be big hurdle for Indian Motorcycles. European Union also included other items like denim jeans, peanut butter, US cigarettes and more in the increased import duty. We can expect Trump government to improve relationship between countries to help home manufacturers.