STURTEVANT, Wis. - September 7, 2004 - Bombardier Recreational Products (BRP) was put in a challenging situation when the U.S. Department of Commerce (DOC) made its dumping ruling in August, said BRP executive Roch Lambert in the company's "The Real Deal" newsletter, released Friday.
Its Johnson engines 25-hp and above are manufactured by Suzuki, a Japanese engine manufacturer, and thus are subject to a preliminary 22.52 duty if imported into the U.S.
In response, the company is raising the dealer price of its 25- to 30-hp and 115- to 140-hp four-strokes, for which BRP does not offer an E-TEC engine of the same horsepower, by 5 percent. The dealer price of those Johnson four-strokes from 40- to 90-hp and 200- to 225-hp, for which it does offer an E-TEC alternative, will increase 12 percent, according to Lambert, BRP's executive vice president, Product Development, Sales, Marketing North America.
He pointed out that Japanese suppliers have the option of reducing prices in Japan, increasing prices in the U.S., absorbing the duty or a combination of the three. However, because BRP purchases the engines from Suzuki, it can't adjust pricing in Japan.
"Absorbing the entire duty is not a sound financial option, and the idea of passing a 22.52-percent price increase on to you was simply out of the question," Lambert added.
The price increases take effect immediately; however, BRP said it is price protecting firm orders provided by September 8.
The engine manufacturer said it would review the situation after the first of the year, once the DOC and the International Trade Commission issue their final decisions.