---

Harley-Davidson to Establish Assembly Operation in Brazil

8 July 1998

Harley-Davidson to Establish Assembly Operation in Brazil

    MILWAUKEE, JULY 7 -- Harley-Davidson announced
today that it has received approval from Brazil to establish an assembly
operation in that country that will import U.S.-made components and
sub-assemblies for final assembly in Brazil.  Assembling imported U.S.-made
components will increase the availability of Harley-Davidson motorcycles in
Brazil, and reduce the duties and taxes on Harley-Davidson motorcycles, making
them more affordable to a larger group of Brazilian consumers.
    Harley-Davidson expects to begin assembling selected models of its
motorcycles in Brazil in 1999.  The Harley-Davidson assembly operation will be
located in the Brazilian city of Manaus, an economic free-trade zone for
motorcycle manufacturing and other industries.
    "The desire for Harley-Davidson motorcycles in Brazil and other South
American countries has never been greater, but trade restraints limit their
availability and steep import tariffs inflate the prices of our motorcycles so
that often only the very affluent enthusiast can afford one," said Jeff
Bleustein, President and CEO of Harley-Davidson.  "Those restraints and
tariffs are lessened by shipping American-made components and sub-assemblies
to Brazil for final assembly, allowing us to meet the needs of more
enthusiasts."
    The final assembly operation will be a joint venture that strengthens an
existing relationship between Harley-Davidson Motor Company and Paulo Izzo,
Harley-Davidson's representative in Brazil.  Harley-Davidson will maintain a
majority interest in the assembly operation, and will determine initial
production levels after further assessment of capabilities and current
marketplace demand.
    In 1997, Harley-Davidson produced 132,285 motorcycles, of which
approximately 600 were exported to Brazil.  The heavyweight (800cc+)
motorcycle market in Brazil currently represents about 7,000 new motorcycles
per year.  Harley-Davidson believes the market will grow substantially over
the next several years.
    Harley-Davidson Motor Company, the only major U.S.-based motorcycle
manufacturer, produces heavyweight motorcycles and a complete line of
motorcycle parts, accessories, and general merchandise.  Buell Motorcycle
Company produces sport and sport-touring motorcycles.  Eaglemark Financial
Services, Inc. provides wholesale and retail financing, insurance and credit
card programs to Harley-Davidson dealers and customers and similar programs
for other leisure products manufacturers.