Harley says EU duties could prompt price hikes

[June 23, 2018]   FRANKFURT (Reuters) - Harley-Davidson Inc could be forced to raise prices in Europe due to EU tariffs on U.S. goods, hitting buyers of new motorcycle models when they are shipped to dealers later in the year, the head of its central European business said.

Earlier this week, the European Commission said it would start charging import duties of 25 percent on a range of U.S. products from Friday after Washington imposed tariffs on EU steel and aluminum at the start of June.

"Of course this will have an impact on the price. We will try and make it as painless as possible but no company can foot this alone," Christian Arnezeder told Reuters TV in an interview.

A spokeswoman for the company said the group was still evaluating the potential impacts of EU duties, and that no decisions on pricing had been made.

Harley says it is getting hit by tariffs twice: Once by the EU import duty and once by a rise in raw material prices resulting from U.S. steel tariffs.

For the moment, though, Harley does not need to raise prices as it used the roughly three months since Europe first threatened to impose duties on its motorcycles to prepare.

Harley Davidson motorcycles are displayed for sale at a showroom in London, Britain, June 22 2018. REUTERS/Henry Nicholls

"We tried to get the current model to Europe as quickly as possible, as far as production allowed for it," Arnezeder said.

He also said that the anticipation of tariffs boosted demand as customers sought to snap up motorcycles before prices rise.

"You could tell on the market, in talking to dealers, that some customers said, I want to fulfill my dream before any tariffs come into effect," he said.

Struggling to overcome a slump in U.S. demand, Harley has been aiming to boost sales of its motorcycles overseas to 50 percent of total annual volume from about 43 percent currently. Europe, the Middle East and Africa accounted for little over 21 percent of its global retail sales in the last quarter.

(Reporting by Reuters TV and Sabine Wollrab; Writing by Maria Sheahan; Editing by Louise Heavens and Mark Potter)

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