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Harley is winning in Europe - without a trade war
[BERLIN] Willi Breuckmann could have gone for the BMW motorcycle—it was a comfortable and affordable machine. And it made sense for him to stick with a ride made in his own country, Germany.
Instead, he chose a Harley-Davidson. The Road King.
"It comes down to a feeling," what the Germans call "ein Gefühl," said Breuckmann, a 54-year-old web developer who lives in Dortmund, in the nation's northwest.
The Road King is a big bike, starting around 24,000 euros (S$38,368), long and low with the iconic V-Twin engine and dual exhausts growling the sound that made Harley famous. It's a smooth ride for long trips and perfect for autobahn cruising. Over the years, Breuckmann added custom paint and a backseat for his wife.
"The BMW is also very comfortable," he said. "But it was a dream of mine to get a Harley."
While US President Donald Trump rails at Europeans for restricting trade and a reluctance to buy Detroit's automobiles, the Milwaukee-based manufacturer of iconic motorcycles proves every day that consumers across the Atlantic are willing to buy American. One of Harley's biggest German dealers says it sells 500 bikes a year. The company almost doubled its market share in Germany in the past decade, to 6.4 per cent in 2017 from 3.3 per cent in 2006, by attracting customers like Breuckmann in Europe's biggest economy who crave the open-road American lifestyle from atop a powerful machine.
American car companies haven't been as lucky. With less than 1 per cent market share each, high-performance American brands like Cadillac and Chrysler haven't been able to chip away at the dominance of BMW or Mercedes.
With sales in the US falling, the European market has become so important to Harley that the company is willing to invoke Trump's wrath, announcing a few months ago it would shift manufacturing abroad to skirt retaliatory tariffs enacted in the president's trade war over steel and aluminum shipments. The European Union is imposing a 25 per cent tariff on U.S. motorcycle imports in response to Trump.
Harley's success in Europe is evidence that American companies can compete and even flourish there, without a trade war—if the products are good enough. The company built a strong network of dealerships and made some adjustments to the products to suit European tastes: slimmer bikes, special customization options and even wifi on board.
Harley's approach—catering to local tastes with a distinctly American product—couldn't be more different than Cadillac and Chrysler, which haven't developed cars with Europeans in mind, said Felix Khunert, an auto analyst with PwC in Germany. Europeans prefer high performance that German engineering is famous for, he said. Plus, Germans still largely use diesel—less expensive than the gasoline—and the American-made cars generally lack diesel engines. General Motors went so far as to sell its European operations last year, while Ford has struggled to grow there, and Chrysler has exploited Italian partner Fiat in its effort to penetrate the market.
Cadillac's 12 dealerships in Germany have been doing better lately: They sold 510 cars in 2017, up from 330 in 2016. This year, they're on pace to match last year's numbers. And the company might be able to bypass the question of diesel entirely. GM will introduce at least 20 all-electric vehicles, many of them Cadillacs, by 2023, said Rene Kreis, spokesman for Cadillac Europe.
Rather than blame the carmakers for their European woes, the president has said European trade policy is why American cars can't compete.
Europeans were introduced to Harley-Davidsons right after World War II. American soldiers rode around West Germany on big bikes with 45-cubic-inch engines (about half the size of today's models), said Christian Arnezeder, the managing director for Harley-Davidson in central Europe. Those US Army motorcycles were being repurposed for civil use, models called WLA and WLC — C for Canadian.
A generation later, in 1976, the company invoked the legacy of US troops and opened Harley-Davidson Germany.
The bikes then were "rough rides," said Georg Kierdorf, the owner of one of Germany's largest dealerships, in Cologne. That's code for unreliable, the product of what for many is the low point of Harley history under the ownership of conglomerate AMF Inc., better known for bowling balls than motorcycles.
Harley in Europe has replicated the owner-community model that makes its brand so strong at home. Dealerships provide easy access for services, plenty of publicity, and a place to hang out and host rallies. A dealership in Potsdam held an event this past spring featuring American tunes, hamburgers and hot dogs.
New bike owners get a free, one-year membership to the Harley Owners Group, the official company-sponsored club. More than 95,000 people attended this year's 115th Harley-Davidson anniversary meetup in Prague.
"It's a European community," said Wolle Rider, president of the H-DC German Harley Riders, an independent club. "We're all friends."
Thorsten Knorr, president of the Harley Club Deutschland, recently set off on his Street Glide—a stripped-down version of the original Harley, all black and silver—on a 15-day, 4,500-mile journey through Scandinavia. He and five friends rode as far as North Cape in Norway, the northernmost point in Europe, and cruised through the Arctic Circle.
The weather was good—except for three days of rain in Sweden. Some nights they stayed at Harley-Davidson clubs. And when one of the Harleys needed a wheel repair, they found a local dealership.
"People buy into a dream," said Knorr, 38. "They buy into a philosophy of life of freedom, of non-conformism and of owning something special."