All good points. When I get into dream mode, I often wonder what would have happened if Swede Husky and not KTM had welcomed John Penton and his ideas with open arms.
The only real advantage I see is in ten years KTM will still sell say a 100,000 bikes instead of 50-60,000 as Husqvarna sales were steadily increasing. Not sure who said it, but the kill a cub idea just keeps popping up in my mind. Yes the new bike or should I say KTM/Berg does look good. Will it catch on? If it has the same flywheel porting, wheelbase, rake and trail as a KTM, really what was the point...........................
I'm with ya Fletch, I'll admit my growing cynicism, plus I'm bored with the "new, unique & exclusive" design crap. IMO just preparing everyone for the soon to be announced mind-blowing MSRP!!!
How is relabeling KTMs going to significantly grow market share for KTM? Good question ... No resident expert here or business person, but I see what you are asking and have no real answer other than name recognition and 3rd world bike sales ... Maybe markete saturation? Why are we sitting on this web site? Only because it is labeled Husqvarna for me. I'll just add to your question... SP owns what really? Just the Husqvarna brand name and bunch of spare parts for previous models? His bikes will be build by ktm, in ktm factories, by ktm people? This means the new bike has to be a ktm. How is the money gonna flow between his company and the ktm group? Its starting to sound like a pretty cozy deal just a little foggy still .. -- One thing is for sure ... The Huskies that have been beating ktms in races in the past do not exist anymore... Any Husky wins are now ktm wins under the cover ... -- One more note about people not seeing these bikes as ktm clones ... many many people do not follow bikes as much as most of you guys here do ... We just don't care or have the time ... I never look at any bikes but Huskies and have no clue what a ktm looks like up close and in detail ... I just don't care what they look like...until it is forced upon me now.
All making good sense and the kill a cub theory still comes to mind. Although KTM of course had lots more sales then Husqvarna I can imagine they had Husqvarna test bikes (just like Polaris will have a Yamaha ETC...) and seeing growing sales and I guess they would be to arrogant to realize Husqvarna had a better product, why not buy them. How strange how arch rivals can be united. They do look nice however no matter what color you make it. It is what it is..............................
In my experience the PDS can work well when set up but has a narrower 'zone' - a buddy of mine who's a fast A rider and pretty particular has tried nearly everything - a Ohlins rear shock set up by a guy who really knows them was the answer. From everything I've heard the Husaberg and the KTM are quite similar when it comes to parts but have very different characteristics when it comes to riding. As different as a 10 Husky 300 and a 10 kTM 300 - no - but I could mod either one to my tastes. My 'beater' is an old 03 YZ250 and I love it. No matter what I do it will never 'feel' like my Husky. I'm about the same speed on both bikes (most riders ride about the same speed no matter what they're riding) = and I have a ton of fun on the YZ - but the Husky still has a special 'feel' - like it was made for me. I guess that feeling will be missed in the 'new' Huskies. As far as KTM making money with Husky when no one else could - the name has value and if you combine Husky and Husaberg sales that makes about 20k 'dirt' bikes. In India KTM will sell 100K and Husky will sell a ton also - and make money.
If you already have a solid business... and you put the competition out of business... you don't need to double sales... just enough sales to increase market share and to pay for the seperate brand's advertising and promotion and product development. If KTM sells 50-60k units now... and making KTMuskies makes that number 75-85k units... win win. I make products for other companies at lower income just to keep my factory moving... pay the electricity... suppliers happy... employees busy. These are private labels. Many true manufacturers do this. Lots of brands out there... few true makers. Additionally, we bought two competitors just to take their marketshare. One I dumped the brand... they other made sense to keep. I make money no matter which brand you buy. Even if the new brand is only 20% of my retail business. Even my sales forces are in competition so both businesses thrive.
I answered this question on the Dirt Bike World forums in Australia at the beginning of the year when this deal was first announced. They won't "undercut their own market" - give them some credit. So I am a bit rusty as it's been a while since I did Economics, but I believe this is a classic Market Segmentation ploy to gain extra revenue. The basic theory is that a product (in this case - motorcycles) will sell a set quantity at a set price. As the price rises, less people will be willing/able to buy the product (e.g. Husaberg's), and conversely the lower the price the more more of the product will be sold (hypothetically, Husqvarna). (Plotting the quantity sold against the price the products are sold at will form what is called a "Demand Curve".) So, at a set price, the company will sell a set quantity of the products - now price x quantity = revenue. Let's just talk revenue for the moment, as profit is a lot more complicated. So in the graph below, KTM earn revenue represented by the orange box. Now, the easiest way to increase their revenue is to have another product at a higher price point - and at that higher price point they are going to sell less of them. Lets call the higher priced product "Husaberg". At a certain price point, people will switch from the higher priced good (Husaberg) to the cheaper one (KTM) - this is where people are getting hung up on product "cannibalism" or "undercutting their own market". But the thing is, KTM don't care if you switch from the higher priced product (Husaberg) to the lower priced product (KTM) because they sell both. They make extra revenue by selling a much lower quantity of the higher priced product - as represented by the blue box in the graph below. So their total revenue is the orange box plus the blue box So KTM want to grow their revenue even more now, and they will logically do this by selling a product at a lower price and sell a lot more of them (lets call the cheaper product Husqvarna). At a certain price point the consumer would rather buy a KTM, but the consumer is going to go for the cheaper brand product below that price point, but KTM will sell a lot more of that cheaper product than they would their standard product. So the extra goods they sell at the lower price point is... ADDITIONAL REVENUE, represented by the red box in the graph below. So now their total revenue is the orange box plus the blue box plus the red box. So I think KTM buying Husky as a form of market segmentation in order to grow their revenues is a SMART move. Yes, there will be a level of product "cannibalization" but KTM doesn't really care if you buy a KTM, a Husaberg, or a Husqvarna at a set price point because they get revenue whichever way you cut it. The trick is that they figure out a way of controlling the cost of selling those products so that the revenue growth is turned into profit growth too. With Husaberg they have done this buy putting KTM engines into the Husaberg bikes - it's been a little bit more than just changing the graphics as the 'Bergs have the 4CS forks etc. The rest of the Husaberg product might be different to the KTM product, but the large cost of the engine (it's R&D, production, spares supply, etc) is shared between the two products so a larger proportion of the extra revenue earned from that product will be profit than if the product had its own engine supply costs. And I think that's where the big question mark is with this merger/takeover is. It'll be interesting to see how this one pans out. Here ends todays micro-economics lesson - sorry if I bored you, but if you read it and understood it then maybe you understand the move by KTM a little more (from an Economists perspective anyway). Basically Pierre/KTM are trying to do in the motorcycle world what VW/Audi/Skoda/SEAT have done in the automobile world. A vast majority of the VW Golf, VW Jetta, Audi A3, and the Skoda Octavia are the same, but you would NEVER say they are all "the same car" because there are differences in the physical appearance, internal quality of finish, extra technology included in the base models, etc to differentiate the products. Personally I hope the Huskies don't lose their advantages over KTM's (like linkage rear suspension for one - controversial opinion, I know), but I think the Husky brand can benefit a lot from KTM technology too.
But they had all this opportunity without having the husky name. Thats the confusing part to me. What do they gain with the name? 100 years of history must be the appeal to the brand as thats all that is left is the branding, the bikes as we knew it are gone. That worked for Cagiva but that makes sense as husky had the name and was like buying the nike swoosh at the time for cagiva. I really know little about this just talking out loud. btw i had a 03 yz250 I really liked as well but as you said did not excite like husky does. for me its the way huskys turn and react to input.
I think its more than what we think. I think Husky is an out for him. KTM will be all Indian owned and Husky will be his baby, or atleast the shareholder arrangement will change quite a bit. Husaberg was like when us normal people go to walmart and spend an extra $50 on stuff we think we need. It seems there is a clear cut path for Husky and to really make it it's own major brand. Of course I'm just guessing based on what I've read but hell it feels better thinking positive lol
The KTM's and Bergs are two different bikes, even the transmission ratios. We know, I tried to match up the xc-w's with the Fe's and I couldn't. We have both KTM and Husaberg race bikes and though they look very similar on the outside, they do not ride the same. I was actually shocked, even coming from a KTM background, the new Husaberg just rode better, faster and much more stable than it's KTM counter parts. I had to keep looking down at the center column to see if there was a steering stabilizer mounted (there was no stabilizer, it was just rock solid). Husabergs are popular in Europe, but not so much in North America. This is the main reason for adding the Husqvarna name to Husaberg motorcycles. The second reason is that it gave a perfect reason to build something 'different' and add the MX variety to the once enduro only line.
They also had Husky taking 20k bikes that they now get. The opportunity was there to compete. Now the opportunity is THEIRS because they bought it. They absorbed 20K bikes in that market by writing one check. Before they had to fight for that opportunity one bike at a tme. Adding 20k units sold to their currently profitable business is gravy. And the new sales aren't shared with India.
I don't believe BMW hit 11,000 in sales with Husky. I think Husky was about 14,000 with MV/Cagiva and it dropped every year with BMW. Of course the World economy, took a dive in this period. KTM had it's worst sales year in ages in 2008, just as BMW was trying to get rolling wit Husky. KTM sales rebounded, Husky didn't and BMW bailed. SP said he hoped to take Husky to 20,000 in sales in the future. Combined Husky and Husaberg sales are about 17,000 (Husky 11,000/Husaberg 6000). It's believed that BMW actually paid SP to take Husky and that is how SP could afford to shut it down and move it to Austria.
So it sounds like we will get the specs and photos we crave on the line up starting this weekend maybe ?
