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Edited Date/Time
7/23/2025 5:22am
So news of a new trade agreement that encourages Japanese companys to manufacture is the US. I think the US is the largest buyer of offroad motorcycles, do you think it would benefit both manufacture and consumer if they were able to move offroad production to the US? Or is there too much outsourcing that would negate any cost savings. I know some manufactures already produced some products here, but with so many US based teams etc...would it makes sense to bring dirtbike production to the US?
A non political question, just a business baesed discussion please.
Japan has agreed to invest $550bn (£407bn) in the US while its goods sold to America would be taxed at 15% when they reach the country - below the 25% tariff Trump had threatened
No.
When President Reagan was in office, he imposed tariffs on Japanese motorcycles over a certain displacement. Honda and Kawasaki and probably others brought manufacturing into the US which was a big gain for the American workforce. You'll probably see that again.
The struggle for the off-road product OEM's will be in the supply chain beneath them. DID, Showa, KYB, Yoshimura, Nissin, and what I assume would be a plethora of other small manufactures would still be shipping only now trans-Pacific to the USA. This means it likely could not just be an assembly plant in the USA for the off-road products. The OEM's and their partners would all have to manufacture as much of the product as possible in the USA. That kind of move would be quite an investment. The return is likely not worth the capital charge vs the capital charge of tariff. The far more likely outcome is that bike prices will increase by 15%.
The majority of the $550bn invested will surely be for automotive. If it were me, I would use funds to expand lines to existing factories where infrastructure is already established. Just expanding one line would cause several vendor manufacturers to expand. Companies like Honda would be investing in that side of it as well. I am sure they own or are part owner of many of their suppliers. I live in a Hyundai manufacturing area and almost all the suppliers are Korean owned. Seats, trims, dashboards, door panels, electrical harnesses, and engines are all made locally. They have set up where very little product comes from overseas. I would be willing to bet a Hyundai Santa Cruz has more American manufactured parts in it than a Ford F-150.
Edit: According to Google, F-150 are 32% made from parts manufactured in USA and Canada. Hyundai Santa Cruz is 100% made from parts manufactured and assembled in the USA.
There was talk with Kawasaki's powersports restructure in 2021 that there would be potentially new plants built both in the US and Mexico down the road. With the political landscape currently in the US, I'm not sure if Mexico would be a go.
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So parts go up 15% too ? When does this happen ?
Showa has a suspension facility in Ohio already for auto suspension for US made vehicles and yes they do own a majority of their suppliers. Their side by sides and ATV's are built in the Carolinas using mostly US sourced parts so It should not be incredibly difficult to expand that. Can't speak for other OEM's
No, they won't bring manufacturing to US.
All the American manufacturers are going to be paying 50% more for their steel, 50% more for their copper, 25% more for their Canadian production, 25% more for their Mexican production, and 55% on their Chinese production. Yamaha, Honda, Kawasaki and Suzuki only has to pay 15% more and they're done with all the shenanigans.
Art of the deal
Right, that's only half the story though, Reagan ended it 4 years later at the request of Harley Davidson.
BTW do you have any evidence it got them to build factories? For sure Honda had been manufacturing motorcycles in the US since 1979, 4 years before the tariffs. Kawasaki had begun manufacturing vehicles (though not motorcycles) in the US even earlier, in 1974.
Right now Yamaha and Kawasaki apply a US-only tariff surcharge of about $600 for dirt bikes. Since under this deal, Japan tariff is set to increase from current 10% to 15% (all up from its normal rate of 2.5%), the special surcharge you pay will likely go up.
All the new automotive industry projects in Mexico are paused. theres even factories from big manufacturers closing down.
Aug 1, in 2 weeks or whenever he needs to move the stock market needle. Just keep in mind it may be reversed the next day…so take your pick
Honda opened it's first vehicle plant in Marysville Ohio in a direct response to Reagan's tariffs. They had begun producing motorcycles there in 1979 and began Auto production in 1982 due to tariff restrictions. Toyota began producing some parts to vehicles such as truck beds in the US as vehicles that were not "complete" received a lower tariff. The beds were installed at the the port before delivery to the dealership. Single cab truck came without tailgates and extra cab had the entire bed installed at port.
Just added the years in your opening sentence.
Honda opened it's first vehicle plant in Marysville Ohio in 1979 in a direct response to Reagan's tariffs from 1983.
Great Scott!
The plant in 1979 was for motorcycles
Soichiro Honda was a true visionary. So much so that he could see the future.
A majority of Kawasaki's four wheel product is assembled in Lincoln, NE. PWC and Original Style Mule vehicles are mexico. Bikes overseas
No point in assembling bikes here when the parts are mostly Japanese or Chinese so would face 15% and higher tariffs.
Sort of, but not quite that simple. Mostly they started producing 700s instead of 750s because the tariffs meant to give Harley a break were on bikes over 700cc.
I think that the big increases in assembly that Honda moved to America was Gold Wings and large displacement bikes, but it could have been a wider range over time.
Parts are made in china. 100% higher
Pit Row
No they wont bring manufacturing to the US, they have no interest in selling dirt bikes for $25K piece, they'll absorb some of the 15% and pass on the rest to the consumer, still cheaper than building manufacturing plants in the US and paying the cost of producing in the US.
Indeed, I know a few people who have toured through the Lincoln facility who said it was impressive.
I should have been more descriptive with my original post stating that there were talks of additional manufacturing both in the US and Mexico.
Aftermarket brands like Tusk, will be most affected by the higher Chinese tariff.
Up or down votes don't change that bikes will be more expensive one way or the other.
The most recent statistics I've seen are that 500K new motorcycle units are sold in the US each year vs 13+ million new cars. It seems more likely the cost will be passed through and they will accept any hit on sales volume, especially dirt bikes, rather than invest serious money in new stateside manufacturing plants that would satisfy customs country of origin designations on components to avoid tariffs. But the future will tell.
Helmets will get a lot more expensive starting 8-1 unless Trump flip flops (like usual). Supposed to be a 32% tariff going into effect for Taiwan. The vast majority of motocross helmets sold by the major gear brands are made by Topkey, a Taiwanese company.
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