HARLEY BUYS MV AGUSTA AND CAGIVA

[mr moto]

interesting times ahead , harley have just bought mv agusta and cagiva in a 70 million euro deal , due to be finalised shortly . http://www.motorcyclenews.com/MCN/News/newsresults/mcn/2008/july/7-13/jul1108-harley-davidson-buys-mv-agusta/?content-block=1

[rockinjc]

How would you like a Harley now?  

jc

[mr moto]

How would you like a Harley now?  

jc

 take the new xr1200 engined sportster and give it an italian brutale style makeover and i am sold  

[Rincewind]

I will shit bricks if they start selling Brutales at my local HD dealers.  

[cworley5150]

I will shit bricks if they start selling Brutales at my local HD dealers.  

Oh . . .  I just had . . .  a moment.  Whew, I need a smoke now.

That's interesting news.  Lots of good stuff could come from this, but I'm not holding my breath.  I mean, HD will not even sell there own Euro marketed XR1200 here and the Buells are shunned by most HD delaerships.  Will they really sell MV's at the HD dealerships?  Doubtful, but we can always hope.  

[DaleFranks]

I gotta wonder why Harley wants MV Agusta.  Unless they want that 190-HP inline four-banger for some reason, it's hard to see what they accomplish by picking up a boutique bike manufacturer that sells less than 6,000 motorcycles per year.  Harley doesn't really do sport bikes well.  They're hardly competent at pushing Harley-engined Buells.  What they'll do with MVA is a mystery.  

IT can't be the compnay itself.  MVA makes very few bikes even in Europe, so I can't imagine the MoCo has plans to import the bikes.  MVA has had financial problems, and a buttload of debt.  I don't see what makes the company itself attractive.

It's just a wierd acquisition, for the MoCo.

Harley says it's trying to expand its presence in Europe.  OK, but they've had double-digit sales growth in Europe for the last few years, so it seems to me that their presence is already expanding quite nicely.  I don't see how owning the MVA brand makes the Harley name any more noticeable in Europe than it already is.

Odd.

Anyway, it looks like they're planning on keeping Castiglioni and Tamburini involved in the design of the bikes, so hopefully the MVA product will retain its high-end quality.

Personally, I'd love to get my hands on a F-4 1+1.

[scott-sts]

Too bad.  Harley sucks.

[rockinjc]

Not a bad deal. You get two active badges for a hundred very-large and change.

jc

[Lawn Dart]

Fascinating.  Does this obsolete Buell?  

I'm not quite "feeling" this match up.  MV and Cagiva have both had problems and I really can't see what they bring to HD's core.  Unless HD needed a distribution network in Europe?  Or, perhaps it's just diversification where HD is hoping the MV sport-bike sales (cuz there's so many of them) will help smooth out the dip in cruiser sales?

HD's got a reason for this...I just don't quite get what the reason is.

[atypical1]

HD's got a reason for this...I just don't quite get what the reason is.

Both brands appeal to high income (I know, I know stereotypes suck) owners. Buell doesn't as much which means it doesn't attract the folks with a lot of disposable income. Think of MV as another luxury good instead of a mode of transportation and it begins to make a lot of sense. This allows HD to capture more of the high end market share. Pretty good move on their part and it was the right brand to purchase.

james

[kansaskat]

The MV F4 1000 has now been officially been removed from my wish list.

[atypical1]

The MV F4 1000 has now been officially been removed from my wish list.

Isn't that kinda throwing out the baby with the bath water?

Would you really have bought one anyway?

james

[kansaskat]

If I had the money I sure as hell would have!!!!! I actually got to ride on one in KCMO last summer. It was owned by a rider from our group who let me and another guy take it 'around the block' since he knew how much we liked them. It was nice...sounded sweet and would have been a blast on the track.

[Lawn Dart]

Both brands appeal to high income (I know, I know stereotypes suck) owners. Buell doesn't as much which means it doesn't attract the folks with a lot of disposable income. Think of MV as another luxury good instead of a mode of transportation and it begins to make a lot of sense. This allows HD to capture more of the high end market share. Pretty good move on their part and it was the right brand to purchase.

james

There's more to this than just the stereotypical buyer.  HD could have gone after Guzzi - which in a lot of ways makes more sense.  Both are air-cooled idio-syncratic twins with one being just a tad more sporting than the next.  I can't see any HD owner doing some "J4 Bashing" to a Guzzi-phile.  

No, I think HD bought them for a different reason.  Maybe HD wanted the technology or the tooling?  Maybe it's case where HD thinks that MV & Cagiva are truly world class bikes simply needing a better marketing department?  

This goes beyond demographics.  HD needed something.  They don't need brand recognition, and they don't need market share (55%!) in the US.  So it could be this is being driven entirely by the demands of the Euro market.  Owning a Euro brand in Europe may relax import restrictions on HD's because they aren't a company in the EU?  Maybe HD needs a better handle on Euro-4 emissions?

Maybe they want MV because they want to give themselves a sportier, edgier image?  

Again, I'm not sure.  But this goes beyond just wanting more Market Share.  HD's trying to secure their future somehow.  They NEED something.  The question is, what?  

[ww73]

This is pure speculation on my part.  Why did HD buy MV?

We have been complaining about the lack of of "true" american made sport bikes, and thus have been spending all our money on japanese or european hardware.  Yes, we have Buell, Fischer, and Motoczysz, but none are serious threats to the Japanese manufacturers.

If HD completes the deal, then technically we have an american made sport bike, and a very good one at that.  Now, the price of the F4 is out of reach for most consumers, but what if they started to produce a 600cc or 800cc model?  Maybe priced around the same as a Japanese liter bike?  Would you buy it?

Couple this w/ the changes in AMA/DMG, we might start to see a true "American" presence in racing, given HD's resources.  It would be nice to see 4 factory MVs racing next year, no?

If these things are true, then that'd be pretty cool actually.

[Lawn Dart]

If HD completes the deal, then technically we have an american made sport bike, and a very good one at that.  

No.  What we have is a Euro made bike OWNED by an American company.  Big difference.  Noone's going to call an MV an American bike...

But I do like your thinking!

[atypical1]

Don't think of the working class guy you see riding from bar to bar. Think of the rich guy who owns a fully loaded Electra Glide, a Ducati 1098, and a huge RV. That is the one buyer they are looking to secure.

It also gives them a huge European presence with Cagiva and their "learner bikes". Perhaps it gives them more of that market and perhaps they expand the Cagiva line and include it in the US (maybe using a non-HD dealer network). Let's not forget that HD is trying hard to make a European presence with the introduction of the Euro only XR bike.

Buying Guzzi makes no sense to them because the brand is not exclusive enough. They might be trying to bring in a younger buyer into the fold but MV ain't the brand to do it (bikes too expensive). It also does not give them the market penetration that the would want.

It has nothing to do with technology. They have that in spades and if they want more they would just pay for it. This is diversification. I also would not be surprised if they played a "back seat" role in all of this. I don't see them putting MVs in HD dealers here in the US or in Europe.

james

[Rincewind]

No.  What we have is a Euro made bike OWNED by an American company.  Big difference.  Noone's going to call an MV an American bike...

Yeah that would be like saying Ducati's were American back a few years ago when they were owned by a Texas Investment company.  Or, it's like saying that Benelli's are now Chinese bikes, because they are being financially backed by a Chinese scooter company.  

From the article linked in GD, it sounds like Harley is doing this mostly for greater access into the European market.  I sort of doubt this will have much of any ramification on the home-front, unfortunately.

[atadaskew]

From the article linked in GD, it sounds like Harley is doing this mostly for greater access into the European market.

Ding! Ding! Ding!
Harley will now have 500 more outlets to sell their bikes.  While the market has slowed down in the US, it is expanding in Europe and given the strength of the Euro against the $$ this is a great move.  Harleys will be much more affordable to Europeans and the bonus is that Harley has also saved MV from going under.
If this isn't a win win situation to the motorcycling world, I do not know what is.

[Bjorn Toulouse]

I'm surprised that Comic HD hasn't come aboard to give us the "real" lowdown.


Rex

[Lon]

The important question to think about when buying any of Harley-Davidson's brands (including MV / Cagiva)...

Do you have metric or English-standard tools?  Choose wisely, because you will need them.




Ooooooooooooo.

100% Just kidding.  Ride on

[UFO]

If HD completes the deal, then technically we have an american made sport bike

  How did you reach that conclusion?

[miles]

Here's what somebody better versed in history had to say:

Harley Davidson is buying the exact same factory they sold to Cagiva in 1978, and rebuying it from the same guy they sold it to 30 years ago!....   Cagiva/MV and its Schiranna, Italy factory = Aermacchi HD from 1970-78.  Same property, same factory.   Harley started collaborating with Aermacchi in 1960, then bought them outright in 1970.   In '78 Cagiva bought Aermacchi and renamed it....    They built another plant across the lake, bigger and newer, in the 90s, and it went to BMW last year, as part of the "Husqvarana" deal, which was actually the purchase of that plant and the rights to the Husqvarna name and product line that Cagiva had acquired in the 80s.   Ten-fifteen years ago they assembled Ducatis there too, before selling Ducati in the 90s (shhhh...   don't tell, 916s and Monsters weren't all assembled in Bologna).

Anyhow, in today's deal Harley gets the old Cagiva/Aermacchi factory on the lake where MVs are now made, and where very fast Macchi racing seaplanes were once made during the Mussolini era.   Harley also gets the rights to the MV Agusta name, for motorcycles, and the MV Agusta product that Cagiva (meaning Claudio Castiglioni) recreated in the 90s...  "real" MVs were made long ago, just down the road in the town of Gallarate, where they still make Agusta helicopters.  Harley also gets Cagiva Research Center (CRC), which is Massimo Tamburini's studio near Rimini, where Cagiva built it to convince Tamburini to join Cagiva in the mid-80s.   Tamburini, fo those who don't know, is the TA in Bimota, the designer of the Ducati 916 and MV Agusta superbikes.  A notable fellow.

No doubt Castiglioni and Tamburini are staying on with Cagiva now because H-D has agreed to provide funding to develop some exciting new bikes that H-D sees as complementary to the existing Buells...   Overall, there is a real synergy between the two companies.   H-D has a very real understanding of what makes buyers of historic marques love their motorcycles, and I'm sure discussions leading to the purchase agreement have shown that H-D and the Cagiva/MV guys are on the same page in this respect.  These aren't scooter guys, these are long term motorcycle industry people on both sides of the deal, representing the most prestigious marques in their repsective segments.  Its just that H-D is much stronger on the business side, and Cagiva/MV much stronger on the engine design and Italian style sides.

H-D borrowing in Euro for the purchase indicates that they believe the dollar will climb in value during the period of the loan.   They are betting on the future strength of  the dollar.  That's interesting given that H-D does not go to H&R Block for their financial advice.   Buell and Harley are both enjoying expanding sales volume in Europe right now, and doing so with retail prices set much higher than in the US market. Combined with the currency situation, that means they are making a lot of dollars in the European market.   If the US dollar regains strength as H-D is betting it will by borrowing for the purchase in Euro, American manufacurers will have a problem maintaining the European business they're building now.   H-D's investment in Cagiva/MV will at that point allow them to supply the market with European built bikes.  Meanwhile they can own the most prestigious manufacturer of sport bikes in the world, and very possibly watch the "mortgage" for their re-purchase of Cagiva go away in dollar terms as time goes on.

Ducati had the same advantage in the US market when the Italian currency was undervalued, and it was a huge contributor to the dramatic rise of Ducati sales in the US through the 90s, and the renaissance of the Italian motorcycle industry in that period.   The European manufacturers subsequently lost much of their US-market profit potential with the adoption and rise of the Euro.  Now they are being squeezed hard by the US market in order to hang on to their market share.  Ducati is struggling financially, pricing 1/3 of their production cheap for the US market, with parts prices set insanely high to try and make up the loss (eg $2300 US for a plastic 1098 gas tank).   H-Ds strategy with Cagiva/MV can help prevent that happening to H-D in the future.  Smart, it seems to me.

Another interesting idea is that Harley may well use this as an avenue to compete in Superbike or Moto GP racing, as Aermacchi/Cagiva did in GP racing in the 60s-90s, with Harley support and branding during the 70s.   Its been 15 years since Koscinski and Lawson were riding Cagivas in 500 GP, and success with a Harley-backed MV would have a *huge* effect of Harley's image in Europe.  They haven't had the money for a serious run at it since the 90s.

[Bodhi]

My guess is they will continue to be Italian-designed and built bikes imported and sold and serviced by the HD network (probably a positive thing not to have to ride (or trailer) your bike a hundred and fifty miles for service). HD is most likely not going to try to dictate the designs. I really truly believe they know better. I could be wrong. It's most likely this will just mean a capital infusion and joint marketing and distribution agreement. IMHO it will be a positive thing for MV and Cagiva. Especially if they were starving for cash.

[chornbe]

As mentioned in another thread, this will be a gateway to merchandising products, and blending brand recognition in Europe. I don't think there will be any impact at all in the US.

$.02

[jackinthebox4]

Doesn't Arlen Ness have an interest in Ducati?
And wasn't Harley pursuing Ducati?

I wonder if there is some economic advantage to be a company which is domestic to the EU.
it's too much for any tax benefit. unless they're looking for a company with Net operating losses to shelter income generated in EU countries.

[Bodhi]

Doesn't Arlen Ness have an interest in Ducati?
And wasn't Harley pursuing Ducati?

I wonder if there is some economic advantage to be a company which is domestic to the EU.
it's too much for any tax benefit. unless they're looking for a company with Net operating losses to shelter income generated in EU countries.

Maybe it has something to do with the exchange rate. They build their bikes over there using Euros and sell them here for Dollars. The prices of imports just keep going up making them less affordable. Maybe they will build a factory here. More likely, HD sales have stagnated and they'll use excess manufacturing capacity to build the "Italian" bikes here. I dunno - I should have stayed awake during Econ 101. It's a tossup whether or not they'll ruin the bikes. I would venture a guess that HD is not so stupid as to impose their idea of what makes a good bike on Agusta and Cagiva. If they have factory-trained technicians and stow parts at every HD dealership, it can only be a good thing for pasta-burner enthusiasts.

[TorqueLover]

Too bad.  Harley sucks.

+ 1,000,000,000

[st ryder]

Maybe it has something to do with the exchange rate. They build their bikes over there using Euros and sell them here for Dollars. The prices of imports just keep going up making them less affordable. Maybe they will build a factory here. More likely, HD sales have stagnated and they'll use excess manufacturing capacity to build the "Italian" bikes here. I dunno - I should have stayed awake during Econ 101. It's a tossup whether or not they'll ruin the bikes. I would venture a guess that HD is not so stupid as to impose their idea of what makes a good bike on Agusta and Cagiva. If they have factory-trained technicians and stow parts at every HD dealership, it can only be a good thing for pasta-burner enthusiasts.

Or maybe they want to race a "Harely" badged superbike in AMA and supplement their domestic cruiser sales with sport bike sales of Harley badged 'Gustas. If the price was right, who amongst us wouldn't want to take a look? I've always said HD should have kept developing and sold the VR1000 in its show rooms. I loved the look of that bike. HD badged 'Gustas would look freaking cool in the HD VR racing livery, and there'd be no smack spoken about their power/handling abilities, cause we'd all know we were buying a "licensed" MV Agusta for an American mass produced price.  

[rockinjc]

Harley badged 'Gustas. + If the price was right, who amongst us wouldn't want to take a look?

Ha Ha "Harley badged" and "If the price was right" in the the same paragraph! That's a good one!  

jc

[st ryder]

Ha Ha "Harley badged" and "If the price was right" in the the same paragraph! That's a good one!  

jc

HDs have dropped in price *considerably* here in the Great White North, maybe by as much as 7k on some models, from what they were seling for 5 years ago. Sooo, the *price is right* for HD here in Canada for the time being.  

[Geoff]

All over the web people are speculating about how the MV Agusta acquisition will play out. I hope Harley is hands off, with the exception of servicing MV Agusta's debt and funding product development.

[bomber]

THis can be great for MV and Cagiva -- clearly, both can use a sugardaddy with deep pockets --

It'll be a death rattle for both if HDI doesn't allow them to stay separate from the  Marketing, Distribution and Service channel aspects -- Buell's successes have come almost in spite of HDI's marketing and distribution involvement -- if you'veever had the "joy" of bringing a Buell into most HD/Buell dealers, imagining the same experience with a Brutale will have you quesy PDQ.

HDI has done very well in their niche market -- a large niche, for certain, but a niche nonetheless -- they've proven themselves to be one-trick ponies, though, IMO, as evidenced by their lack of ability to "get" the fact that not everyone aspires to own a Road King someday . . . .

all that said, I certainly wish everyone involved the best of luck -- it'll be an interesting soap opera to watch

[YamadogR1]

As the owner of an MV I think that this will work out fine for both companies. Harley will have access to MV's dealer network in Europe and MV will have the capital to build its new 675 triple which is ready for production and the new F4 which they have designed. Mr Tamburini and the engineers will be left alone and Harley will provide funding, marketing and distribution expertise.  Hopefully at some point in the future MV will return to racing. I doubt that MVs will be sold in Harley dealerships as it is a completely different group of people who go the Harley store. Our local dealer has done quite well with MV since becoming a dealer in March 2007. They have sold over a dozen MVs  which is not easy. They are not really overpriced when you start looking at what it would take to buy a Japanese bike and buy the components to upgrade it to MV standards.

[mr moto]

The deal is done .....http://www.motorcyclenews.com/MCN/News/newsresults/mcn/2008/august/4-10/aug0808-harley-davidson-mv-agusta-deal-finalised/