Thursday, 3 August 2017

EU registrations

Moped and motorcycle registrations in the EU -3.7 % in Q2 2017

The latest data released by ACEM, the Brussels based international motorcycle industry trade association, shows combined registrations of motorcycles and mopeds declared by participating markets in the EU (all PTWs – Powered Two Wheelers) totalling 426,913 units for the second quarter of 2017, representing a decrease of -3.40 percent compared to the same quarter of the previous year.

Italy was the best performing market with 137,483 units for Q1 and Q2 combined (+5.9% compared to 2016). Registrations also went up in France (134,036 units, +4.5%). This contrasts with the situation in other large European markets such as Germany (102,929 units, -12.6%), Spain (76,558 units, -5.3%) and the UK (56,677 units, -14.1%).
In motorcycle terms, registrations of motorcycles in the EU were 327,799 for Q2 2017 (-4.67% compared to 343,840 units in Q2 2016). The Italian motorcycle market is currently the largest in Europe with 124,913 units registered for the first six months of 2017 (+6.6% compared to the same period of the previous year). Motorcycle registrations also increased in France (91,494 units, +2.6%), but decreased in Germany (88,322 units, -12.3%), Spain (67,373 vehicles, -8.1%) and the UK (53,549 units, -13.4%).
Registrations of mopeds in the EU in Q2 increased by +1.05% (99,114 units, up from 98,088 in 2016), led by strong growth in the two largest European markets for the year to date - France (42,542 units, +9%) and the Netherlands (37,032 units, +8.4%). Moped registrations declined in Germany (14,067 units, -14.8%), but remained stable in Poland (12,586 units, +0.5%) and Italy (12,570 units, -0.5%).
Total registrations of electric mopeds, motorcycles and quadricycles reached 13,089 units for the first six months of 2017, an increase of +30.5% compared to the same period in 2016 (10,576 units). A total of 10,204 electric mopeds and 1,995 electric motorcycles were registered in Europe (+78.1% and +23.5% respectively), whilst figures for electric quadricycles went down from 3,232 in Q2 2016 to 1,610 units in Q2 2017 (-50.2%).

Comment by Editor, Robin Bradley

United Colours
of Ducati?

Although the Volkswagen Audi Group (VAG – the ultimate owner of Ducati) is still refusing to confirm or deny the rumours that it is looking to exit the motorcycle business, there has been more than enough unofficial discussion, especially involving VAG Trade Union board members, and financial industry “informed sources” commenting and reporting on it for us to be able to assume that the rumours are true.
The old adage about there being no smoke without fire has never been more appropriate. Highly respectable motorcycle manufacturing executives on at least three continents have either explicitly or effectively acknowledged that there is an opportunity in play to acquire Ducati. Personally, I really don’t put much faith in economic analysts or spokespeople for equity investors, investment banks or hedge funds, but, again, enough major players in the financial industry have also been drawn into the speculation to, again, make it highly unlikely that there isn’t action here.
To be fair, the unofficial word coming out of VAG is that their definition of “the right buyer” has more to it than money alone, and that if VAG feels that they are not going to be able to pass stewardship of Ducati on to a “safe pair of hands”, then when it comes to it, they may not sell, and that they are placing a premium on a “good” decision, rather than a “quick” decision. 

‘return to Italian ownership’

Meantime though, the “not invented here” principle that is often such a barrier to valuable corporate memory and consistency, to say nothing of the need to fund emissions scandal fines, point to a new management at VAG (headed up by Matthias Mueller) that regards the acquisition of Ducati in the first place as having been a vanity project. One taken by a now discredited Chairman who was left with no option than to withdraw from the field of battle when it became apparent just how much reputational as well as financial damage the emissions scandal was going to inflict.
Volkswagen and the other businesses in its group had previously been a business that was regarded blue chip and a robust pillar of German business probity, and German business culture prizes that reputation almost above all else, so it would not be a surprise if the present management were in the market to put as much distance between them and the prior management and its decisions as possible.
Of all the channels of speculation that have been actively reporting the progress of the sale, one of the generally most reputable has been the Reuters news agency. Back in June they reported that VAG had appointed Evercore, a New York based “investment boutique” to circulate a sale prospectus and gather in bids by an unspecified date in July.
The latest reports from Reuters suggest that bids have been received (though interestingly not from Harley-Davidson, who had been reported to have appointed Goldman Sachs to act for them in the matter) and that once the more rational candidate bids had been short-listed, the sale would move on to a second stage from which a preferred buyer would be chosen.
The two front runners at this still early stage are reported to be the Italian Benetton family and KTM partner Bajaj Auto of India.
The Benetton family’s investment vehicle Edizione Holding is reported to have tabled an opening bid that values Ducati at around 1 billion euro – which is way below the 1.5 billion euro region that VAG were hoping to realise; that is ambitious though as it would represent a multiplier of more than 10 times the estimated 100 million euro that Ducati is reported to have made for VAG last year, and double the 731 million euro revenue that Ducati reported last year.
While there may be some sentiment to see Ducati return to Italian ownership, probably not enough sentiment to bridge that gap without a substantially improved offer; but first bids are just that, a marker, a statement of interest, and the real horse-trading starts now.
Reuters says its sources are also reporting that other bids have been received, and among them name-check Bajaj Auto, Eicher Motors (owner of Royal Enfield and a utility vehicle joint venture partner with Polaris), Polaris Industries itself, former Formula One owner CVC Capital Partners, Advent, PAI, Investindustrial (former Ducati owner, who sold Ducati to VAG for 860 million euro in 2012) and several others, including Boston, Massachusetts based Bian Capital, owner of a stake in BRP of Ski-Doo and Austrian Rotax engines fame, and the one-time workplace of former U.S. Presidential candidate Mitt Romney.
Of those bids, it is the Indian Bajaj Auto conglomerate’s interest that appears to be creating the most excitement. Rajiv Bajaj is reportedly quoted as saying he is “confident” about his prospects for winning what would be quite a prize for him in the fiercely competitive battle between the Indian transport industry giants.
Indian newspaper reports quote him as saying “we are very close to finalising a very promising alliance… it’s not certain that it will happen, but if it does, it will open up enormous possibilities for the company. That is why we keep our money (cash on books) with us, so, once in a while, when an opportunity comes along, we are ready.” Bajaj is reported to have about $13 billion in free cash stashed away on its books.
BMW, Honda, Suzuki, China’s Loncin and Hero and TVR of India (as well as Harley-Davidson it would appear) are believed to be among those who had expressed initial interest of some kind or another, but who ultimately declined to pursue it on the grounds that the price VAG is seeking is just too high to represent a viable investment at this time.

Spanish motorcycle registrations

Spain – motorcycle registrations -7.83 percent in Spain YTD

According to the latest data available from ANESDOR, the motorcycle industry trade association in Spain, new motorcycle registrations were down by -4.41 percent in June (16,732 units) and are -7.83 percent for the first six months of 2017 (67,349 units YTD).

Overall, total PTW registrations in June were -1.97 percent at 18,791 units (+3.76 percent in May). For the first six months of 2017 the market is -5.18 percent (76,547 units).
In moped terms June was +23.66 percent at 2,059 units; for the year-to-date moped sales in Spain are +20.06 percent (9,198 units).
General Secretary of ANESDOR Jose Maria Riano says that “after a very positive 2016, the start of 2017 has been marked by the effects of the new European emission regulations (Euro 4), which has led to a steep decline in the sales of motorcycles as prices have increased.”
Riano has again pointed to the age of the motorcycle fleet (“park”) in Spain (at an average of 14.7 years old), saying “the administration must embrace measures to encourage the acquisition of new vehicles.” He again calls on the government to start incentivising replacement of older machines with new models through fiscal reform initiatives.

Norton Motorcycle

Norton Motorcycle in ‘Design & Licence’ agreement with Zongshen

Norton Motorcycle and Chinese manufacturer Zongshen have entered into a 20 year Design and Licence agreement over an all new 650cc twin engine. 

Jointly engineered and developed by Norton and Ricardo, the Euro 4 compliant engine has been specifically designed to the requirements of Zongshen, enabling the Chongqing, south-central China based manufacturer to meet current and future emissions regulations.
This is clearly an important deal for both businesses. For Zongshen it will enable them to fast track through an expensive and time-consuming development phase and allow them to continue their phenomenal growth. 

Although the value of the deal is to remain private, the initial consideration paid to Norton is described as being in the “millions of dollars” with an ongoing royalty on each engine produced. The agreement is for a 20-year term - last year Zongshen produced around 4 million engines.
The engine and its’ IP, developed by Norton, is specific and exclusive to Zongshen, and it is expected the engine will be produced under the ‘Zongshen’ or ‘Cyclone’ brands.
Norton CEO, Stuart Garner, commented: “It’s a great endorsement of our new 650cc engine platform and shows the high level of engineering expertise we have here at Norton. Working with Zongshen going forwards will enable them to deliver high quality, low emission engines compliant to current global standards.
“The commercialisation of our IP is a key area for Norton and we will be investing the substantial revenue received back into our skills, training and engineering capability, thus ensuring long-term sustainability to our British made Norton motorcycles.”
Norton will continue to hand make all its own Norton engines in the UK at its Donington Hall factory.

MV Agusta

MV Agusta Holding completes recapitalisation deal with ComSar Invest

It has been a long time coming, but Varese, Italy based MV Agusta says it has now finalised its latest attempt to achieve financial stability and managed to buy back the 25 percent stake it sold to Mercedes AMG (part of the Daimler Group) in late 2014.

This latest news is confirmation of a plan first announced late last year. The deal sees ComSar Invest, an investment fund that is part of Black Ocean Group, owned by Timur Sardarov, a “Russian dynasty key player in the production of oil and gas in Eastern Europe”.
The financial details of the deal have not been disclosed, but sees MV Agusta Holding increasing the capital invested in MV Agusta Motor S.p.A., and with a quorum of creditors agreeing to the deal, it is expected that the restructuring plan will now get final approval from the Italian courts.

“MV buys back Mercedes stake”

MV Agusta Holding will control 100% of MV Agusta Motor S.p.A., with ComSar Invest as a “strong minority shareholder in the Holding company alongside a controlling stake owned by GC Holding, the investment vehicle of President Giovanni Castiglioni.
The turnaround plan started in 2016 and has been based on the repositioning of the MV Agusta brand as a “prime producer of super premium motorcycles” in lower quantities than had been the ambition previously. That plan has brought the company back to profitability.

Giovanni Castiglioni, President - "This transaction with ComSar Invest through a capital increase and the acquisition of the shares previously held by Mercedes represents an important milestone for our plan

Castiglioni commented: “The transaction with ComSar Invest in our holding company through a capital increase and the acquisition of the shares previously held by Mercedes AMG in MV Agusta Motor S.p.A. represents an important milestone for our plan. The main objective is the reinforcement of MV Agusta’s core business - the production of high-performance, high-end motorcycles.
“In the last 12 months the implemented measures have brought MV Agusta back in positive cash flow generation, allowing it to complete the restructuring plan and to consistently support product development and consolidation of our key markets.”
Timur Sardarov, controlling shareholder of ComSar Invest, is quoted as saying: “MV Agusta is for us the most iconic brand in the industry, a company that in the last five years has invested heavily in new product development, creating an extensive, enviable range of motorcycles, which results today in a unique asset and a foundation for a successful future.

 “Positive cash-flow generation”

“We will focus our funding to reinforce the MV Agusta sales network and service and our knowledge in the technology fields, web and marketing to reach and enhance new markets, strengthen our digital and social presence, and enlarging MV Agusta’s consumer base.”
New York City based asset manager Black Ocean Group is, in turn, part of the Ocean Group, an investment vehicle founded by entrepreneurs Oliver Ripley and Timur Sardarov in 2005. Ocean has interests in a diverse range of sectors including private aviation, agriculture, real estate, corporate finance, banking, services, technology, media and internet, with offices in New York, London, Geneva and Moscow.

KTM and Bajaj

KTM and Bajaj to take Husqvarna global

It is 10 years since KTM and Bajaj Auto of India started their strategic partnership, and the two have now announced a collaboration to take Husqvarna Motorcycles worldwide, with a global roll-out in 2018.

The collaboration will also see KTM and Husqvarna branded motorcycles produced in India increased from the expected 100,000 units in 2017 to over 200,000 units in the next years. The Duke 125, 390 and RC 125 – 390 are produced in Bajaj´s production facility in Chakan/India and distributed by the two partners globally.
Husqvarna sold over 30,000 units in 2016 – a record for the brand – and Stefan Pierer, CEO of KTM AG, and Rajiv Bajaj, Managing Director of Bajaj Auto Ltd., have decided to build on the success achieved so far, and, in the long run, no doubt exploit the opportunities presented by the new fuel injected 2-stroke engines.
The first models, Vitpilen 401, Svartpilen 401 and Vitpilen 701 will be produced in Mattighofen, Austria, and launched in early 2018. Later in 2018, the Vitpilen 401 and Svartpilen 401 production for the global markets will be transferred to Bajaj’s Chakan factory. Bajaj aims to sell Husqvarna Motorcycles at a similar level as KTM products in India and Indonesia.
In November 2007, Bajaj Auto first acquired a 14.5% stake in KTM Power Sports AG (holding company of KTM Sportmotorcycles AG), and increased its stake to 47.96 percent in 2013.


BMW +9.5 percent for first six months of 2017

BMW Motorrad have sold more motorcycles and maxi scooters in the first six months of 2017 than in any previous first half year - deliveries increased by +9.5%. as of June 2017, for a total of 88,389 vehicles (80,754 units in the same period of 2016).

Stephan Schaller, General Director of BMW Motorrad, said: “For all of us at BMW Motorrad it is a great pleasure and a confirmation of all our efforts that our customers continue to show us that we are on the right track with our model initiative.”
The strongest growth was recorded in Europe, with France (9,447 units, up from 7,790), Italy (9,099 units, up from 7,912), Spain (5,573 units, up from 5,133) and UK/IE (5,410 units, up from 4,746) all up for BMW again. Overall around +12.9% more vehicles were delivered in Europe compared to the first half of 2016, including in Germany.
BMW say that the South American market in particular is showing considerable growth potential for them with a “dynamic” increase in sales – up by +16.3% to 8,306 units; sales in China were also significantly higher than in the previous year (2,836 units/+18.8%).
The German motorcycle market remains their single largest, where it is market leader with 14,461 units sold so far in 2017 (+4.9 percent); in the U.S. BMW Motorrad is +3.8% (7,157 units) in a difficult market that is seeing most manufacturers losing sales.
The water-cooled R 1200 GS and GS Adventure (17,159 units sold, +17.3 percent) continue to be BMW’s flagship models, with the ‘Boxer’ engined R series selling 49,240 units in the first half of 2017 in total.
Overall, 12,763 S models were delivered worldwide, with the S 1000 RR , S 1000 R and S 1000 XR Adventure bike doing well.


Keep cool, keep dry!

Hevik’s new ‘Helios’ summer glove is said to provide the “perfect balance between ventilation and protection, combining safety, an attractive design and maximum comfort.”

Developed for both urban and touring use, the Italian gloves are touchscreen-friendly and feature Spandex, leather and mesh, resulting in a unique fit that makes its rigid knuckle protection imperceptible and protects the hands in all areas of possible impact. Inside they feature a polyester mesh lining and are adjusted by means of hook and loop fastening.

Also seen here, Hevik’s ‘Rainstop’ waterproof suit is a “top-of-the-range” seam-sealed two-piece rain wear solution that is said to be able to withstand a pressure equal to an 8000mm column of water. It has high breathability thanks to the use of reinforced nylon (PVC-free ripstop), an air vent on the rear further improving breathability, and front closure with double fastening, reflective inserts, an internal pocket and a concealed hood that folds into the collar.

HEVIK S.r.l.


Hyperpro BMW ESA shocks upgrade promotion

Dutch suspension specialist Hyperpro is offering a special promotion on BMW ESA shocks this summer – shocks sold between July 4th and September 15th will qualify for a first service free of charge.

Sales & Marketing Director Jan Belder told IDN: “With this campaign we are emphasizing three things - the need for good suspension, the need to service suspension after two years or 20,000km in order to keep quality components operating at optimum performance, and the reliability, durability and quality of our products.
“We stand behind our designs and quality 100 percent – so much so that we can offer a free first service, because we know our suspensions are good for many tens of thousands of miles.”

The company says that the only condition for the promotion is that the free first service is valid for the first user, showing the original invoice (a copy is fine) with a purchase date between 01-07-17 and 15-09-17. The offer excludes the cost of mounting and dismantling of the shocks and shipping and is valid for two years after purchase date. The service includes inspection of the shocks and replacement of oil and necessary seals.
Belder explained that because the BMW R1200GS/A is one of the best selling bikes of recent years, with 2008-2013 models still very much in use, as these motorcycles are getting older, the OEM shock absorbers will show some issues, with replacement required.
“Issues like non-functioning ESA adjustment as a result of a damaged adjustment motor, too soft springs, lack of damping - these and other needs of the rider can be solved by installing Hyperpro products.
“We offer serviceable front and/or rear shocks using our proven 460 emulsion dampers as a basis for a top quality, cost-effective upgrade. The shocks are equipped with a stronger ESA stepper motor, waterproof connectors, an improved damping setting and a progressive black or purple spring. The shocks are ‘plug and play’, ready to connect to the BMW ESA system and make use of the original preload adjustment.
“This solution delivers a better balanced bike, which is more stable and comfortable to ride, both as a solo rider or as two-up rider, with or without luggage.”