'Made in America' is not a priority for Harley-Davidson riders in Europe, says custom motorcycle builder

Key Points
  • President Donald Trump continues to taunt Harley-Davidson via social media, saying the reason the company is losing sales is because it has manufacturing plants in other countries.
  • But Harley riders overseas care more about the price tag than where the bike is manufactured, says custom motorcycle builder Alan Stulberg.
  • Ken Schmidt, former communications director at Harley-Davidson, says, "Harley is being chastised for doing something that any company in its position would do."
President Trump targets Harley-Davidson

Harley-Davidson riders in Europe don't care whether the iconic American motorcycles are made in the United States, custom motorcycle builder Alan Stulberg told CNBC.

"They’re concerned more about the pricing of the model as it compares to other options available in Europe," said Stulberg, co-founder of Revival Cycles, a motorcycle shop based in Austin, Texas, that restores vintage bikes and sells custom-built bikes starting at around $115,000.

"What [Harley-Davidson riders] are buying is the heritage of America-built," Stulberg said Thursday on "Squawk Alley." "But it being made in America isn’t really a priority."

Just two days earlier, President Donald Trump taunted Harley-Davidson on Twitter, saying, “Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S. Harley customers are not happy with their move - sales are down 7% in 2017. The U.S. is where the Action is!"

Full-year sales of Harley-Davidson motorcycles declined 7.2 percent in 2017, compared with the previous year. The iconic American motorcycle company's U.S. retail motorcycle unit shipments also dropped 10.5 percent in the same time period. Meanwhile, sales of less expensive Japanese motorcycles, such as Honda, Kawasaki, Suzuki and Yamaha, as well as stylish Swedish bikes, increased.

But a combination of aging Harley riders and changing consumer preferences appears to be responsible for Harley-Davidson's sales decline in recent years — not the consumers' desire to buy made in America.

Kelly Yun of Minneapolis said it was her "love of riding" that motivated her to buy her Harley.

"I was in Ecuador and saw Harleys," she told CNBC. "I thought, that's great. It's kind of like a German car in the United States. I wouldn't care where it was made."

Stulberg pointed out that Harley-Davidson has been building motorcycles outside of the U.S. for some time, with manufacturing plants in Brazil, India, Australia and Thailand.

"This isn't a new thing for them," he said.

Harley-Davidson motorcycles are offered for sale at a Harley-Davidson dealership.
Getty Images

On June 25, the company said it was moving some of its production overseas to avoid EU tariffs. Harley-Davidson said the tariffs would increase the average cost per motorcycle sold in Europe by about $2,200.

Trump quickly showed his disapproval through a series of tweets.

Ken Schmidt, former director of communications at Harley-Davidson, said the company is "being chastised for doing something that any company in its position would do."

"[Harley-Davidson] is just working to protect the franchise," Schmidt said Thursday on "Squawk Alley." "[It's] working to keep the flow of product moving into, in this case, the European Union, its second-largest market, and to sustain its business. Any company would make those decisions. So, to be singled out as having done something wrong or something that is anti-American ... it just smells bad."

Harley-Davidson would not comment on Trump's tweets or its declining sales. But Michael Pflughoeft, communications director for the company, confirmed that all motorcycles made overseas are sold overseas. The company is shutting down a Kansas City, Missouri, factory and transferring those operations to York, Pennsylvania.

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More US companies will move production overseas like Harley Davidson, says expert