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Thread: Harley-Davidson building factory in Thailand

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    Harley-Davidson building factory in Thailand

    Harley-Davidson building factory in Thailand | Fox Business

    Although it exports completed bikes from the U.S., Harley-Davidson notes that some markets have high tariffs that put its motorcycles out of reach for most customers. Thailand has a 60% tax on imported bikes, a tax that would not apply to Harleys assembled for delivery inside the country’s borders.

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    Senior Member geir's Avatar
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    They already makes some Ducati models.
    That kind of taxation is great to attract companies to Thailand.
    A blowjob is better than no job!!

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    Triumph have also had a factory in Thailand for a number of years

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    Senior Member marc26's Avatar
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    Quote Originally Posted by geir View Post
    They already makes some Ducati models.
    That kind of taxation is great to attract companies to Thailand.
    Why would it attract companies to Thailand?
    Getting a tax break on the bikes they would sell in Thailand means very little to their bottom line

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    Senior Member MrDK's Avatar
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    Quote Originally Posted by marc26 View Post
    Why would it attract companies to Thailand?
    Getting a tax break on the bikes they would sell in Thailand means very little to their bottom line
    This can't be for real.
    Compare a high taxed product that cannot sell to the same product with little taxation that can sell.
    While the company may not realize a higher per unit earning it will stand to sell more units.
    Selling MORE generally means something to the bottom line.
    You are in the business of financial, right.

    A sister company to one I worked for had difficulty selling its products in Brazil because of exorbitant taxation.
    It opened up a plant to where it shipped products in parts and had some components molded in Brazil.
    It went from very little sales to Brazil to it becoming one of its biggest markets as its products were no longer taxed.
    In monetary terms sales went from a few hundred thousand dollars per year to tens of millions.
    Ya think that affected the bottom line.

    Why do you think a company like Mercedes Benz assembles cars in Thailand?
    They ship the vast majority from Germany or US and source insignificant components locally.
    Harley, I am sure, will do just that all the while adding lots to the bottom line.
    does not take an accountant to figure that.
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    Senior Member geir's Avatar
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    Quote Originally Posted by marc26 View Post
    Why would it attract companies to Thailand?
    Getting a tax break on the bikes they would sell in Thailand means very little to their bottom line
    MrDK pretty much answered for me. The sale of HD in thailand is very low because of the high taxes on imported stuff. A minimum 60% off the price will make HD attractive and they will sell a lot. At the same time HD get cheap labor and cheap factories. It's a win win, HD can produce cheaper bikes and Thailand get a lot of new jobs.
    It's just basic maths that anyone ever had a business would understand right away.
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    Senior Member marc26's Avatar
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    Quote Originally Posted by MrDK View Post
    This can't be for real.
    Compare a high taxed product that cannot sell to the same product with little taxation that can sell.
    While the company may not realize a higher per unit earning it will stand to sell more units.
    Selling MORE generally means something to the bottom line.
    You are in the business of financial, right.

    A sister company to one I worked for had difficulty selling its products in Brazil because of exorbitant taxation.
    It opened up a plant to where it shipped products in parts and had some components molded in Brazil.
    It went from very little sales to Brazil to it becoming one of its biggest markets as its products were no longer taxed.
    In monetary terms sales went from a few hundred thousand dollars per year to tens of millions.
    Ya think that affected the bottom line.

    Why do you think a company like Mercedes Benz assembles cars in Thailand?
    They ship the vast majority from Germany or US and source insignificant components locally.
    Harley, I am sure, will do just that all the while adding lots to the bottom line.
    does not take an accountant to figure that.
    How many Harley's do you think HD in Thailand, relatively or any company to offset much lower wages and, a lot say, better quality work in neighboring countries?

    Reducing the tax on a specialty item to be sold in a country with little appetite for it is not going to be a deciding factor vs lower wages and better work in neighboring countries.
    And I am not an accountant but the figures are clear as day that companies ARE choosing neighboring countries over Thailand.

    Obviously HD has a reason they chose Thailand but I was commenting more on Geir's comment that lowering the in-country tax on specialty items won't have that much of an attraction
    Last edited by marc26; 26th May 2017 at 18:51.

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    Senior Member marc26's Avatar
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    Quote Originally Posted by geir View Post
    MrDK pretty much answered for me. The sale of HD in thailand is very low because of the high taxes on imported stuff. A minimum 60% off the price will make HD attractive and they will sell a lot. At the same time HD get cheap labor and cheap factories. It's a win win, HD can produce cheaper bikes and Thailand get a lot of new jobs.
    It's just basic maths that anyone ever had a business would understand right away.
    And anyone who had a business would understand that labor is cheaper and some say a lot better in neighboring countries.

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    Senior Member geir's Avatar
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    Maybe because Thailand have a good reputation when it comes to motor industry....Most of the original Japanese cars and motorbikes are made in Thailand.

    And it's not a small market for HD's in Thailand. Look at the bike weeks around the country. Look at all the big bikes you meet when doing road trips. I'm not sure if HD is still mainly made in the US, but it's a big corporation and they know what they are doing.
    Look at all the Ducati's on the roads here now compare to a few years back. Bikes priced 3-500k is bikes the middle class can buy.
    Producing the bikes in Thailand makes them as good as tax free on the Thai market.
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    Senior Member MrDK's Avatar
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    Quote Originally Posted by marc26 View Post
    And anyone who had a business would understand that labor is cheaper and some say a lot better in neighboring countries.
    I am sure the poor folks in Milwaukee are incapable of doing market research and should be advised to call some guy in Vancouver to guide them.
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    Quote Originally Posted by MrDK View Post
    I am sure the poor folks in Milwaukee are incapable of doing market research and should be advised to call some guy in Vancouver to guide them.
    As I said already, by why bother acknowledging that, that HD obviously has their reasons for this move.

    I just don't agree that business that I believe are niche in Thailand (let's follow sales of HD in Thailand going forward) are going to choose a tax break in country vs cheaper and better manufacturing elsewhere.
    Thailand, as Geir pointed out, has experience in automotive manufacturing, so that could be it.

    But as I pointed out, the #'s are clear as day that companies are choosing their neighbors over them, you care to refute that?

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    Senior Member MrDK's Avatar
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    There are a lot of western people in Thailand and a fair few wealthy Thais.
    Aside from Singapore I would guess that Thailand would have the highest percentage of wealthy people in SEA.
    With that in mind a product assembled or manufactured in Thailand would fall under the ASEAN trade agreement so other SE Asian countries would not unduly tax it.
    Include ASEAN Plus Three (APT) and it can reach markets like China, Japan and South Korea with limited taxation.
    The Milwaukee folks probably do not know that, so it should be a positive surprise.
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    Senior Member geir's Avatar
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    Quote Originally Posted by marc26 View Post
    As I said already, by why bother acknowledging that, that HD obviously has their reasons for this move.

    I just don't agree that business that I believe are niche in Thailand (let's follow sales of HD in Thailand going forward) are going to choose a tax break in country vs cheaper and better manufacturing elsewhere.
    Thailand, as Geir pointed out, has experience in automotive manufacturing, so that could be it.

    But as I pointed out, the #'s are clear as day that companies are choosing their neighbors over them, you care to refute that?
    Some businesses are moving out, but still most of the "Japanese" cars are made hare. Ducati opened here I think 2-3 years ago, Triumph as well. So even with high minimum salaries I think it's a good place to open a factory. And obviously they have the knowledge. Actually a lot of parts to the new BMWs and Benz is made here. The 5 series to BMW is put together in Thailand and is way cheaper here than it was 10-ish years ago. (not sure if they still do, but they did a few years back)
    A blowjob is better than no job!!

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    Harley Davidson's are also built in India... Export will be the main thrust I should imagine. This is not being done to create a cheaper product in Thailand because of tax cuts. Though that will be an obvious benefit.

    Union leaders condemn Harley-Davidson?s Plan to Manufacture Motorcycles in Thailand | WPMT FOX43

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    Harley-Davidson plans Thailand factory to serve Southeast Asian market

    Motorcycle maker Harley-Davidson Inc. said on Thursday it will build a plant in Thailand, a major Asian automotive hub, to serve the growing Southeast Asian market, a move criticized by a U.S. labor union.
    The company did not give a figure for the planned investment in Thailand's Rayong province, southeast of Bangkok.
    Katie Whitmore, Harley-Davidson public relations manager, said the company had its best results in Asia-Pacific in 2016, though she gave no numbers.

    The Thailand facility "will allow us to be more responsive and competitive in the Asean region and China," Harley-Davidson public relations manager Katie Whitmore said.
    "Increased access and affordability for our customers in the region is key to growth for the company in total," she said. "There is no intent to reduce H-D U.S. manufacturing due to this expansion."
    The plant would let Milwaukee-based Harley-Davidson avoid Thailand's up to 60 percent tariff on imported motorcycles and help it get tax breaks when exporting to Thailand's neighbors, thanks to a trade arrangement among members of the Association of Southeast Asian Nation (ASEAN).
    Harley opened a plant in India in 2011. It also assembles motorcycles at a plant in Brazil.
    After the New York Times reported on Harley's planned Thai investment, United Steelworkers (USW) International President Leo W. Gerard on Tuesday said the decision was "a slap in the face to the American worker and to hundreds of thousands of Harley riders across the country."
    USW represents members at Harley plants in two U.S. states and 850,000 workers in North America.
    Gerard also said that production outside the U.S. "puts in jeopardy the success that has propelled Harley over the years."
    Whitmore said motorcycles assembled in Thailand would have the same "authentic look, sound and feel" as those manufactured in the U.S.
    Demand for Harley motorcycles in the U.S., the company's biggest market, continues to be slow as its loyal baby boomer demographic changes ages.


    Poor union workers!!!
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    Senior Member marc26's Avatar
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    Quote Originally Posted by MrDK View Post
    There are a lot of western people in Thailand and a fair few wealthy Thais.
    Aside from Singapore I would guess that Thailand would have the highest percentage of wealthy people in SEA.
    With that in mind a product assembled or manufactured in Thailand would fall under the ASEAN trade agreement so other SE Asian countries would not unduly tax it.
    Include ASEAN Plus Three (APT) and it can reach markets like China, Japan and South Korea with limited taxation.
    The Milwaukee folks probably do not know that, so it should be a positive surprise.
    Honestly auto manufacturing is not one of my many talents 555
    I am not knocking the move, as we both said obviously HD knows more than I do

    I just don't think it brings in that much more companies

    And I honestly don't think sales of HD would be nothing more than niche
    You mentioned Mercedes, but there would be multiple more Mercedes sold than HAD
    Even beyond personal sales, places like 5 star hotels and limo services need to buy them

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    Senior Member MrDK's Avatar
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    Quote Originally Posted by marc26 View Post
    And I honestly don't think sales of HD would be nothing more than niche
    At 250,000 premium priced motorcycles per year (peaked at 350,000) and a revenue well over a billion that may be niche market.
    Not to mention that HD consistently ranks in the top 100 (often top 10) valuable/respected/powerful corporate brands in the world.
    Yep, probably a little niche player.

    Rankings where listed, Year, Position,
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2016, 11
    Best Global Brands, By Interbrand, 2016, 80
    The Authentic 100 Index, By Cohn & Wolf, 2016, 30
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2016, 17
    US RepTrak 100, By Reputation Institute, 2016, 91
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2015, 10
    Best Global Brands, By Interbrand, 2015, 79
    US RepTrak 100, By Reputation Institute, 2015, 27
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2014, 5
    Best Global Brands, By Interbrand, 2014, 87
    Green Rankings US (100), By Newsweek, 2014, 12
    Top 10 Most Respected Corporate Brands, By CoreBrand, 2014, 6
    Top 50 Most Familiar Brands, By CoreBrand, 2014, 22
    Best Global Brands, By Interbrand, 2013, 96
    The 100 Most Loved Companies, By APCO Worldwide, 2013, 29
    Top 10 Most Respected Corporate Brands, By CoreBrand, 2013, 4
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2012, 3
    Best Global Brands, By Interbrand, 2012, 96
    US Brand Top 100 Brands of United States, By MPP Consulting, 2012, 44
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2011, 3
    Best Global Brands, By Interbrand, 2011, 100,
    The NetProspex Social 50, By NetProspex, 2011, 80
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2011, 3
    Top 50 Brands in Social Media (SMR), By Yomego, 2011, 30
    US Brand Top 100 Brands of United States, By MPP Consulting, 2011, 52
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2010, 5
    Best Global Brands, By Interbrand, 2010, 98
    The Vitrue 100 - Top Social Brands, By Vitrue, 2010, 71
    Top 150 Global Licensors (50), By License! Global, 2010, 42
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2010, 6
    Top Social Network Stars, By Famecount, 2010, 73
    US Brand Top 100 Brands of United States, By MPP Consulting, 2010, 56
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2009, 6
    Best Global Brands, By Interbrand, 2009, 73
    Engagement Scores for the World's Top 100 Brands, By Wetpaint and Altimeter, 2009, 41
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2008, 3
    Best Global Brands, By Interbrand, 2008, 50
    BrandZ Top 100 Most Valuable Global Brands, By Millward Brown, 2008, 72
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2007, 4
    Best Global Brands, By Interbrand, 2007, 45
    BrandZ Top 100 Most Valuable Global Brands, By Millward Brown, 2007, 64

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    Senior Member marc26's Avatar
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    Quote Originally Posted by MrDK View Post
    At 250,000 premium priced motorcycles per year (peaked at 350,000) and a revenue well over a billion that may be niche market.
    Not to mention that HD consistently ranks in the top 100 (often top 10) valuable/respected/powerful corporate brands in the world.
    Yep, probably a little niche player.

    Rankings where listed, Year, Position,
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2016, 11
    Best Global Brands, By Interbrand, 2016, 80
    The Authentic 100 Index, By Cohn & Wolf, 2016, 30
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2016, 17
    US RepTrak 100, By Reputation Institute, 2016, 91
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2015, 10
    Best Global Brands, By Interbrand, 2015, 79
    US RepTrak 100, By Reputation Institute, 2015, 27
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2014, 5
    Best Global Brands, By Interbrand, 2014, 87
    Green Rankings US (100), By Newsweek, 2014, 12
    Top 10 Most Respected Corporate Brands, By CoreBrand, 2014, 6
    Top 50 Most Familiar Brands, By CoreBrand, 2014, 22
    Best Global Brands, By Interbrand, 2013, 96
    The 100 Most Loved Companies, By APCO Worldwide, 2013, 29
    Top 10 Most Respected Corporate Brands, By CoreBrand, 2013, 4
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2012, 3
    Best Global Brands, By Interbrand, 2012, 96
    US Brand Top 100 Brands of United States, By MPP Consulting, 2012, 44
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2011, 3
    Best Global Brands, By Interbrand, 2011, 100,
    The NetProspex Social 50, By NetProspex, 2011, 80
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2011, 3
    Top 50 Brands in Social Media (SMR), By Yomego, 2011, 30
    US Brand Top 100 Brands of United States, By MPP Consulting, 2011, 52
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2010, 5
    Best Global Brands, By Interbrand, 2010, 98
    The Vitrue 100 - Top Social Brands, By Vitrue, 2010, 71
    Top 150 Global Licensors (50), By License! Global, 2010, 42
    Top 20 CoolBrands , By The Centre For Brand Analysis, 2010, 6
    Top Social Network Stars, By Famecount, 2010, 73
    US Brand Top 100 Brands of United States, By MPP Consulting, 2010, 56
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2009, 6
    Best Global Brands, By Interbrand, 2009, 73
    Engagement Scores for the World's Top 100 Brands, By Wetpaint and Altimeter, 2009, 41
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2008, 3
    Best Global Brands, By Interbrand, 2008, 50
    BrandZ Top 100 Most Valuable Global Brands, By Millward Brown, 2008, 72
    100-top Most Powerful Brands, By Tenet Partners, CoreBrand, 2007, 4
    Best Global Brands, By Interbrand, 2007, 45
    BrandZ Top 100 Most Valuable Global Brands, By Millward Brown, 2007, 64
    I'm talking about being niche in Thailand, I just don't see many people driving them.
    But as you pointed out, the fact that tax break is for all ASEAN definitely is a plus

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    Senior Member MrDK's Avatar
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    Quote Originally Posted by marc26 View Post
    I'm talking about being niche in Thailand, I just don't see many people driving them.
    Stating the obvious "I just don't see many people driving them"
    Taxes prevents it.

    Remind me of a scenario the was presented when I attended a small little slack pretend business school called "The Wharton School"
    A shoe company sent a sales guy to some place in Africa to sell shoes.
    After a month he sold nothing claiming that Nobody wore shoes and was fired.
    The company decided to give it another try and sent another sales guy.
    I took just a couple of days before that sales guy call home office urgent them so send more shoes because no one wore them.
    I know this does not exactly compare with HD, except just most drive bikes and most cannot afford HD BECAUSE of taxes.
    Remove the taxes and a new market will open.


    Quote Originally Posted by marc26 View Post
    I'm talking about being niche in Thailand, I just don't see many people driving them.
    But as you pointed out, the fact that tax break is for all ASEAN definitely is a plus
    No Kaka!

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    Senior Member geir's Avatar
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    Yeah, 60% off will for sure attract buyers. The number of BMW's now are huge compare to a few years back.
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