According to Bloomberg Businessweek, Harley-Davidson has been struggling to establish any presence in the Chinese market for two wheel vehicles due to regulations on motorcycles. These regulations include the banning of motorcycles from elevated highways and major roads to help limit the amount of external noise and drive-by thefts in major cities, such as Shanghai and Beijing. Even though Harley-Davidson has attempted to ease these laws by lobbying the Chinese government, all of Harley's attempts have come up empty handed. Harley-Davidson projects that if the Chinese government will allow motorcycles into certain areas, sales could jump by as much as 40% annually despite the fact that Harley motorcycles are subject to import taxes that can add up to 30% percent to the sticker price of the motorcycle. The 30% increase in price does not even figure in China's consumption and value-added taxes either. Should Harley-Davidson look at there investment into the Chinese government as sunk cost if they are not able to get legislation passed in their favor? Or is the chance at such a high profit margin increase truly worth the risk? Something interesting to keep in mind is that Honda sold 1.29 million scooters in China last year compared to only 268 Harley-Davidson's that were sold in China last year. If Harley could switch some of those 1.29 million buyers to motorcycles, will profits rise or will the amount spent on lobbying the government play into their profit equation as well?