Manufacturers report better than expected financial results as market waits to see if motorcycle demand sustains
As the motorcycle market in Europe continues to worry about how new motorcycle and aftermarket parts and accessory sales activity performs in the coming winter season - especially as a second wave of coronavirus infections starts to build throughout Europe - the financial news from the majority of the leading motorcycle manufacturers so far is encouraging.
Some two weeks after the last edition of International Dealer News went to press (August/September), a number of motorcycle manufacturers reported their first and second quarter results (the three months to June 20), and there has been a tsunami of OEM news since as the market embraces a new, virtual 'No Show' new model launch culture.
While describing the results posted so far as "good" would be a stretch (everyone has been down one way or another), they were "less bad" than might have been expected during the March and April "days of darkness".
The KTM MotoGP team at Brno - this is only KTM's 4th season in the premier class.
We reported on KTM's rapid recovery in the last edition - its numbers were still substantially 'off', but its direction of travel was better - and the latest news from Austria is of an upward revision to the Group's 2020 forecasts and a series of initiatives and track successes that is seeing it push on for real growth in the coming years.
CFMOTO increases KTM stake
Parent company PIERER Mobility AG has increased its forecast for the 2nd half of 2020 "due to the sustained high demand for KTM, Husqvarna and the now 100% owned GasGas brand of motorcycles (especially in Europe, North America and Australia) as well as Husqvarna and R Raymon e-bikes and bicycles". The Management Board increased the sales forecast published at the end of August 2020 for the second half of 2020 to over € 850m (previously it was less than € 800m). This means that sales for the second half of the year will be more than 10% higher than the € 765.3m in the same period in 2019.
Annual Group sales of more than 1,450m are therefore expected for the financial year 2020, with the e-bikes and bicycles division making a sales contribution of more than € 110m; expected EBIT margin and the positive free cashflow outlook remain unchanged.
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| South African rookie Brad Binder scored KTM its first ever MotoGP premier class win at Brno in August on the RC16. |
PIERER Mobility (PMAG) also announced that it had used its own shares to take a 35% stake in the German arm of Los Angeles headquartered digital platform DealerCenter Digital GmbH.
Stefan Pierer appears to have taken the stake in 2018 through Pierer Industrie AG - PIAG, his investment vehicle - in a total amount of € 1,358,750 (plus a € 150,000 loan), and to have now converted that into a PIERER Mobility stake in return for 30,703 PMAG shares.
Among the online services operated by DealerCenter, it's BikeCenter is described as a new "secret weapon" for dealers and as "the only open advice and sales tool for bicycle retailers with over 70 brands and more than 500 dealers".
In additional PMAG news that broke just as this edition of IDN was going to press, the company also announced that it was to "intensify the joint venture with CFMOTO in China" - strengthening its presence in China and "expanding its market shares".
In a statement PMAG stated that "the joint venture with CFMOTO is being further strengthened in order to be able to serve the increasing market demand, primarily in China and globally. The new middle class series (750 cc) will be produced in the newly built factory of the Chinese joint venture in Hangzhou".
Production is slated to start at the beginning of 2021 and will be supplemented in the future by further models from the 890 cc series and selected off-road models.
"As a sign of the deepening of the cooperation, CFMOTO has acquired around another one percent of the listed PMAG stock, so now holds around 2.05% in the company. These shares acquired by CFMOTO come from Pierer Konzerngesellschaft mbH and directors of the Pierer Group". The transaction is expected to close in December 2020.
