KTM/Husqvarna... now how will this play out?

[Bobby]

Interview Manfred Grunert BMW Motorrad about Husqvarna
Thursday, January 31, 2013

(web translation)
Today Nieuwsmotor.nl talked with Manfred Grunert, Head of Product Communications BMW Motorrad. "I can now announce that BMW Group indeed will sell Husqvarna Motorcycles to Pierer Industrie AG for an undisclosed sum. This is subject to approval by the competition authorities, we expect that within a month can be completed. Due of the enormous drop in the offroad market, BMW has decided to focus purely on BMW Motorrad, so onroadmodellen of over 600cc. never say never, but in the short term, BMW will therefore not return in the offroad segment.

The new owner will be responsible for the service of the sold Husqvarna's. At the moment he takes over the brand will immediately cease all involvement of BMW, which also applies to supply engines and parts for current models. All "expat" employees from Germany at BMW are still on the payroll and will therefore return to BMW. The employees of Husqvarna'll just stay in service.

We do not feel this as a loss of face but as a logical decision after the collapse of the offroad market. I know the circumstances under which other major engine manufacturers withdrew from an Italian company, but for us this is not an issue. Your remark that this is very costly for BMW I can not answer, as you know we do not talk about the sums of money. "

This is the part that concerns me,....is the Terra now a one year trick pony or going to remain? It's in demand and a great price point, but if BMW is going to supply Engines what exactly does this mean? This is particuarly important to me as HSQ wants a Terra order from me today, but nothing is going to show up for over a month or more and from what I'm seeing the future for that model could change drastically in the next month, hard to say!

 

[ray_ray]

What I am waiting for now is a press release from the new ownership group... for some idea of the direction of the brand, etc.. This deal could be structured any number of ways. I am hoping that the "cooperation" between Husky and KTM is more Husaberg focused than KTM focused. Where the cooperation likely will come is to combine R&D and certain manufacturing processes. This makes some sense I think.

You gotta remember, this guy just tossed ktm and who ever else out the door in a business manner ... He's gonna make some business remarks whether he means them or not ... Like a business apology... Its worthless ...

He appears to have the cards he wants as he can still keep working dirt bikes as he sees fit and back over at the place he just left, well, Bajaj may wanna turn the company attention somewhere other than racing and researching dirt bikes ... Husky is sort of their lifeline in a way to ktm if this plays out ... The ktm ama racers will be a key indicator on money spent on racing ...

And its usually good business to keep your enemies close and look over the counter from time to time at them ...

Be really interesting to see what Decosters trace team ends up with.

Its a key indicator to watch ...

 

[mnb]

BMW was good for Husky. Some people will never admit it, but without BMW, Husky wouldn't even be around right now. I am disappointed that they didn't see the deal through, cutting it short after only 6 years (and the first three did nothing). But they didn't seem to understand Husky. Road bikes are fine and all, but they put too much effort in that and not enough in the Husky core.

Peirer could use this acquisition to increase his controlling interest in KTM or he could have his golden parachute. That remains to be seen. It all depends on where his mindset is with the Bajaj deal. Is he ready to cut bait and bail? To admit defeat? Or will he leverage this, stay on board and fight?

 

[boisedave]

http://www.businessweek.com/news/20...na-motorbike-brand-to-focus-on-city-transport

Check this out -- some of the best info yet from what I think is a reputable source.

 

[ray_ray]

The new owner will be responsible for the service of the sold Husqvarna's. At the moment he takes over the brand will immediately cease all involvement of BMW, which also applies to supply engines and parts for current models. All "expat" employees from Germany at BMW are still on the payroll and will therefore return to BMW. The employees of Husqvarna'll just stay in service.

Power ... pure power ... The rubber is meeting the road as we speak ....

I bet those Husky guys are like : "The exit is that way" ... Let bmw purchase the one-way tickets home ...

 

[Planepower]

Thanks for a bit of clarification Grandia!

I sure hope it doesn't signal the end of the TRs, they seemed to be one up on anything else in that class. And, I hope the Nuda continues, that was to be my next street commuter after this season. Sell the 1198 once I get my trophy and pick up the Nuda. From the sound of it, any BMW influence will be scrapped.

 

[Dirtdame]

I'm hoping that the new owner will use his marketing skills (that helped make KTM such a success) with Husqvarna also. We should see better advertising, add on parts, accessories and clothing hopefully....and the kind of features that most of the model lineup has been needing for some time now. And maybe some new models, like some minis and new DI two strokes.

 

[Motosportz]

I don't think there will be any KTM involvement. As I understand it he is selling his control and interest in KTM / to Bajaj India and going all in with husky. If this is true i think we are in fro great things.

 

[mnb]

I'm sure existing parts and deals for their mfg for current bikes are part of the deal. That's a no brainer. Besides, with the exception of the Nuda, BMW doesn't sell bikes based on anything Husky has.

I expect all the BMW based bikes to be EOL'd. There were rumors of a 450 based X-Lite. That may see the light of day with the death of the 449. It all depends on what Peirer wants to do with the brand.

 

[Motosportz]

Thanks for a bit of clarification Grandia!

I sure hope it doesn't signal the end of the TRs, they seemed to be one up on anything else in that class. And, I hope the Nuda continues, that was to be my next street commuter after this season. Sell the 1198 once I get my trophy and pick up the Nuda. From the sound of it, any BMW influence will be scrapped.

I think your right, all that might be going away. On the other hand he might be able to continue that sourcing engines from BMW / Kymco. If so we might even see fantastic Dakar type 650 bikes etc.

 

[mnb]

I don't think there will be any KTM involvement. As I understand it he is selling his control and interest in KTM / to Bajaj India and going all in with husky. If this is true i think we are in fro great things.

Or he could leverage buying Husky into more controlling interest at KTM... It's too early to call. Like, you, I prefer that he would focus on Husky. Besides, it makes for a way better movie.

 

[Phil Lamb]

The following is my assessment, based solely upon some net snooping.
Bajaj has been steadily increasing its % of Cross Industries, currently about 47% owned by Bajaj, 51% by a Stefan Pierer controlled corp. Cross is the majority owner of KTM. Pierer originally brought in Bajaj for development capital. Bajaj may have a right to buy more of KTM, or Pierer may have a right to sell more to Bajaj. At these percentages, Bajaj is essentially in control. SP may just sell his KTM stake and roll it into Husqvarna.
KTM is coming off a strong year. Its stock, listed on the Vienna exchange, traded all fall around 44 euros, now it is about 50. Pierer may have a buy sell agreement and a performance bonus as CEO based upon stock value. Might be a good time to sell.
BMW paid about 93 million euros for Husky. If they are willing to take a loss (which would be a minor issue given their finances), even more incentive for SP. He will not want to burn bridges with Bajaj until everything is finalized. In the long run, Bajaj is more interested in economical rather than high end cycles (apparently the 3rd largest motorcycle manufacturer in the world). And all of this is premised upon the lack of a noncompete which would otherwise bind SP.

 

[Motosportz]

SP may just sell his KTM stake and roll it into Husqvarna.

thats my hope.

 

[glangston]

thats my hope.

Only thing that makes sense.

 

[Motosportz]

http://www.businessweek.com/news/20...na-motorbike-brand-to-focus-on-city-transport

Check this out -- some of the best info yet from what I think is a reputable source.

Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury vehicles, agreed to sell its struggling Husqvarna off-road motorcycle unit to focus its two- wheeler efforts on its namesake brand.

Pierer Industrie AG, the holding company of Austrian investor Stefan Pierer, which also owns a 51 percent stake of motorcycle maker KTM AG, signed an agreement to buy the brand for an undisclosed sum, the Munich-based manufacturer said today in a statement.

“Husqvarna didn’t fit to BMW’s long-term strategy,” Pierer said today in a telephone interview. He aims to end losses at the brand, which will remain independent, by 2014.

BMW, seeking to defend its lead in luxury-car sales from Volkswagen AG (VOW)’s Audi and Daimler AG’s Mercedes-Benz, is parting ways with Husqvarna after buying the brand in 2007 to appeal to younger riders. The manufacturer plans to scale back ambitions in the off-road motorcycle segment with the sale.

“In the context of changing motorcycle markets, demographic trends and increasing environmental demands, BMW Motorrad will expand its product offering to exploit future growth potential,” the company said in the statement. “The focus of the realignment will be on urban mobility and e- mobility.”

Pierer plans to retain Husqvarna’s focus on off-road bikes and will use KTM’s international marketing experience to facilitate expansion, he said.

Limited Synergies
KTM, originally an off-road brand, has successfully expanded its model lineup to street bikes over the past decade. The Mattighofen, Austria-based company’s motorbike sales rose 32 percent to 107,142 vehicles last year with strong growth in India, the home country of KTM’s partner Bajaj, which holds 47 percent of the manufacturer.

Husqvarna sold 10,751 motorcycles last year, an increase of 16 percent. Deliveries of BMW-brand motorbikes increased 2 percent in 2012 to 106,358 vehicles globally, marking a record for the 90-year-old marque.

“The synergies between BMW and Husqvarna motorcycles were probably limited,” said Frank Biller, an analyst with LBBW in Stuttgart. “The brands address two very distinct customer groups and completely different motorcycle segments.”

Husqvarna, which started making motorbikes in Sweden 110 years ago, was previously owned by Italy’s Cagiva MV Agusta group. The vehicles are now developed and produced in Cassinetta di Biandronno, Italy.

BMW started rolling out two scooter models in July to attract urban commuters. The company plans to introduce an electric scooter next year.

 

[ScottyR]

I get the feeling that the EU would not allow KTM to purchase Husqvarna and that is why Pierer bought it personally. This way they get around the anti-trust legislations in Europe. It hasnt been confirmed by anyone that he is selling his shares in KTM. I think this deal will be similar to the relationships that a lot of auto makers have. Up until last year, Ford owned 40% of Mazda for example.

 

[Planepower]

Dammit! I'm hooked onto this thread now! Lol
I'm really beginning to believe that Husqvarna will be promoted heavily.

 

[Motosportz]

Tons of info rolling out today onthis announcment.

CycleNews...

As has been rumored for the past few weeks, BMW has agreed to sell the Husqvarna brand. But the sale isn't to KTM as originally believed, but instead to Pierer Industrie AG of Austria - the company owned by Stephan Pierer, the CEO of KTM.

BMW says the sale of Husky is part of the realignment of its BMW Motorrad business.

"In the context of changing motorcycle markets, demographic trends and increasing environmental demands, BMW Motorrad will expand its product offering to exploit future growth potential," a release from BMW issued this morning states. "The focus of the realignment will be on urban mobility and e-mobility. By restructuring the segment, the BMW Group will concentrate on expanding and utilizing the resources of the BMW Motorrad brand. Therefore the BMW Group signed a purchase agreement with Pierer Industrie AG (Austria) for the acquisition of Husqvarna Motorcycles. The acquisition will proceed subject to approval by anti-trust authorities. Both companies have agreed not to disclose the purchase price."

BMW purchased Husqvarna from the Castiglioni family (the owners of MV Agusta) in 2008 and have been active in expanding the line-up - both with new off-road models and streetbikes like the Nuda 900.

Although it sounds like BMW will focus its efforts on the "urban mobility" sector, it closed its press release with... "core segments from the 650 single-cylinder entry-level bike to the six-cylinder luxury tourer will also be selectively expanded."

BMW Motorrad achieved new sales records in 2012, according to BMW.

"With the realignment of its motorcycle business, BMW Motorrad aims to maintain profitable and sustainable growth over the coming years," the release states. "Its current core business consists exclusively of premium vehicles in the categories "Tourer", "Enduro", "Sport", "Roadster" and "Maxi-Scooter" from 650 to 1600cc. BMW Motorrad entered the urban mobility segment for the first time in 2012 with the C 650 GT and C 600 Sport maxi-scooters. The next step in the expansion of the product line-up in this segment will be the series launch of the "C evolution" electric scooter in 2014. Further innovative vehicle concepts are also under consideration. Drive trains will include both environmentally friendly combustion engines and pure electric drives. This move by BMW Motorrad reflects the BMW Group's overall focus on early identification of trends, such as megacities and traffic density, as well as environmental issues. Corresponding products and services are already available for the automobile segment."

 

[boisedave]

Very interesting -- I am hooked on this topic. Waiting for some info from the new owner. That would be great!

 

[MikeB]

From what I can gather then: Cross Industries is purchasing Husky ... and currently owns controlling interest in KTM, Pankl, and WP (and a couple of others). The BIG question is whether or not Cross is seliing its interest in KTM ?? In any case it would appear that Huskies will probably be suspended with WP in the future; that the Cross company that was developing DI for 2 strokes will get back to work; that Husky WILL surely get some new 250 and 300 2 strokes whether they be KTM based or not; that there's a good chance Husky will become one of the big players in all forms of off-road competition (and I hope Jenna keeps her job - she's been great to deal with regarding Husky contingency money).
IF Cross is bailing on KTM that would be very bad news for the orange crowd ... I too wonder if DeCoster would retire or move over to make Husky MX competitive.