When iconic American brand Harley-Davidson announced that it is moving much of its production overseas, there was much made about the recent tariffs being the primary driver of the decision. After all, if the bikes are more expensive because consumers in foreign markets must pay more due to tariffs it surely makes sense to move production closer to where those consumers are. Indeed that is true. But it also just makes plain good sense to make stuff near the folks you want to sell to. This is why there are so many manufacturers that do just that, from Airbus and Mercedes in the U.S. to Apple in Asia, it's just good business.
And so Harley, a brand that has struggled to gain traction among the under-50 crowd here in the U.S., has instead sought growth overseas in Europe and more recently Asia. Moving production makes sense despite the comparatively higher taxes in most of those overseas markets, and so the recently-added tariffs make it a no-brainer from a financial perspective. But what does this do to a brand that is positioned as an American icon, representing the freedom of the open road and all that? This will be a tricky road indeed for marketers to navigate.
It is interesting that Harley decided to make it political, resulting in a signature "Trumpian" tweet, when the whole thing is really just nothing more than a business decision. But the question remains, "How can you be American when you are not made in America?" Brand equity is difficult to build and Harley-Davidson has built quite a bit of it. So why dilute the equity by moving abroad? Well, that's where the growth is, some marketers would say. What a quandary this is for marketers at Harley. Abandoning its home turf might not be the greatest move for an already struggling brand. It surely worked for David Hasselhoff but it might not work so well for Harley. Perhaps it would be better to leverage the prestige image it has built over many decades, stay in the U.S., and raise prices to compensate for the tariffs rather than try to sell an "American" brand from Croatia or Thailand. Or maybe the brand can be re-positioned somewhat and shed some of its "American" persona. This will be interesting to watch.
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