Ducati will have to support the salary of the ninth-highest paid athlete in the world, but merchandising and new sponsors may give the company a profit from the deal.
August is the month when Italy shuts down and everybody goes on holiday, so it’s ironic that two of the country’s biggest motorcycle stories happened then. One, the official announcement of Valentino Rossi’s switch to Ducati (the world’s worst kept secret), on a day when the Italian press were not allowed to report it!
The other big news, of course, was MV Agusta going back to its former owners Claudio and Giovanni Castiglioni for the princely sum of one euro. Let’s hope that this time they can hang onto it and make it profitable so they can keep producing drop-dead gorgeous sportbikes.
Both of the above items are at opposite ends of the scale given the sale price for a whole historic company, albeit with debts, and an individual who is ranked the 9th-highest paid athlete in the world. Estimates put his yearly gross at £22 million GBP, which is expected to rise to £30 million next year due to the tie up with Ducati.
While this column is not about the sport side of motorcycling, it is about the business side of things and this is big business more than anything else, even the sporting accolades of world championships. Plenty of people are saying it is a big gamble for Rossi and an even bigger one for Ducati, given the financial costs to a company that was financially struggling under Castiglioni’s control in the late ‘90’s.
However, when you look at the money that Ducati is likely to make in merchandising, the sponsors Rossi will bring with him and so on, Ducati is likely to easily get their financial investment back before you even look at bike sales. And you can certainly bet any new models will have advertising suggesting the maestro has had a hand in the bikes development, worth a few thousand extra of anyone’s money!
So really neither side can lose. Well, it is still about winning races for both sides and if they don’t I’ll bet money nobody will blame Valentino, who might just see four wheels as an option in two years. In the meantime the race budget might just swallow up all the new profits – the WSB team has already been axed. Interesting times in the current market by anybody’s standards!
Good news! KTM Power Sports AG has finally reported healthy financial figures for the third quarter of operating results 2009/10. This is a complete turnaround considering things were looking very bad just over a year ago when it posted figures for its worst ever operating year of 2008-2009. As
KTM has finally started reporting strong financial results for 2009/10 and is filling large pre-orders for the new entry-level 125cc street bike.
a result, there were production line closures and staff lay-offs and that led to Bajaj Auto Ltd of India – one of the world’s biggest motorcycle producers – buying 30% of KTM’s shareholding.
The company states that the new encouraging figures are a clear sign that its restructuring and a “focus on core business and efficient cost management” is paying off. Large pre-orders for their new off-road range and interest in the new entry-level 125cc street bike mean that recent financial worries could soon be history.
BMW Motorrad has announced two special edition motorcycles as part of its new 2011 range: the F800ST Touring and K1300R Dynamic. The new editions will join the range of motorcycles that provide buyers with a range of factory-fit options and accessories at a significant savings against being purchased separately. They have also announced new audio options for the R1200RT and new color schemes for various models.
As we now know, shortly after I penned the last column on possible purchasers of MV Agusta, Harley-Davidson, Inc. concluded the sale of its subsidiary to Claudio Castiglioni and his wholly owned holding company, MV Agusta Motor Holding, S.r.l. The sale came just 10 months after Harley-Davidson announced its intention to sell MV Agusta as “part of a new corporate strategy to focus resources on the Harley-Davidson brand” last October.
Despite interest from three Italian investment banks and former Ducati CEO Frederico Minoli, who was responsible for turning them into a profitable company when they too were failing, it was ironically the former owners Claudio and Giovanni Castiglioni that came out on top.
Claudio and Giovanni Castiglioni paid just one euro through their family holding company for 100% of the shares of MV Agusta Motor.
Paying just one euro through their family holding company, they re-purchased 100% of the shares of MV Agusta Motor SpA from Harley-Davidson. The sale also means they get the Cagiva brand as well as MV, one which they brought to the fore originally.
The new MV Company will be headed by Giovanni and famous engineer Massimo Bordi, who helped Ducati to success during the years when this too was owned by the Castiglionis.
Bordi said, “MV Agusta has the capacity to once again become a major player in luxury superbikes and is one of the most recognized brands worldwide. The current range and new models under development have innovative features and unique designs and I have no doubts about their future success.”
Claudio Castiglioni will continue as Chairman and will concentrate on the development of new products. He said upon signing, “MV Agusta is the crown jewel of Italian motorcycles and I am thrilled to have completed this acquisition.” He went on to confirm a 675cc three-cylinder sportbike and Brutale (previously mentioned here) will be amongst the first new models to come out of the new firm.
Following on from the spy shots of Ducati’s new muscle bike comes news that it has already been given an official name. Previously in leaks it has been referred to as ‘Vyper’, ‘Mega Monster’ and ‘Project 0803’. However, official sources state it will be called ‘Diavel’ which means ‘devil’ in the Bolognese dialect. Ducati is of course based in Bologna and have used this version instead of the more commonly used words for devil like ‘Diavolo’ or ‘Diablo’ as a tribute to its local area where a lot of the testing is done. It would appear that this bike is very important in its marketing strategy as Ducati has also registered the name for use on a full range of accessories and memorabilia already, as well as using it on the bike itself.
Italian legendary tuning house NCR has just produced the lightest Hypermotard in the world called the Leggera 1200 Special. It is based on the 1100 Ducati Hypermotard but with a massive 125 pounds being shaved from the already minimal weight. New parts are in titanium and the bodywork is now carbon-fiber.
Aprilia’s new 1200cc Dorsoduro owner’s manual has revealed the bike is powered by a liquid-cooled 1197cc V-Twin.
In addition to the weight loss, the bike gains 20 hp (110.2 hp) thanks to work on the engine, which includes bigger-bore cylinders with titanium valves in the head and NCR cams. Engine covers are now magnesium as part of the overall diet. While it has shed weight it has gained pounds in another area, and now costs £87,800!
Aprilia have been publically embarrassed thanks to the 183-page owner’s manual for the new 1200cc Dorsoduro having appeared on the internet, confirming the rumors we have been giving space to for some time. The Supermoto-style bike’s manual was posted online on an Aprilia owner’s forum and shows the bike will be powered by a liquid-cooled 1197cc V-Twin as we have suggested it would be last month.
Following on from last month’s news about Piaggio in India it has announced the launch of the Vespa LX125 into the Indian market in 2012. Sources suggest that a target 150,000 units a year is what will roll off the production line in the proposed new factory. (India sold 8.4 million PTW’s in 2009 and is the world’s second largest two –wheeled market)
A brand new 530cc single-cylinder, light-weight dirt tracker has been launched called the Zaeta 530. It has been created by Italian engineer Paolo Chiaia in conjunction with wacky former Italian racer Graziano Rossi, father of legend Valentino. The rugged-looking bike weighs in wet at 253 pounds and can be built to the customer’s own specification. It will cost €13,500 and will be distributed in Italy by Bologna-based firm Royal McQueen.
It seems we got it a little wrong last month when we suggested that the new Triumph trail bikes would be using the existing 675cc engine from the speed Triple. It now seems that Triumph is happy to admit that the motor will be an all new 800cc unit designed to give more low-down grunt for off-road use. This would fit with recent spy shots that show a serious off-road bike with crash bars, sump guard, hand guards and whole host of other essentials for the serious adventure biker!
The MCIA who govern the UK motorcycle industry are once again citing another recent survey which points to just how important motorcycling is to the UK economy. This latest one has revealed that the sport and leisure sector has a total turnover of almost £500 million. The GVA is estimated to be approximately 50% of turnover at £238 million, while the sector also provides tax contributions of almost £100 million, proving a valuable asset to UK PLC.
In a recent change to the existing set-up Husqvarna motorcycles are now to be distributed in the UK direct to dealers from September 1st. The bikes will be sold via a new sales and marketing company, HVUK Limited. Bikes and spare parts will be shipped direct to dealers from the factory in Italy to reduce lead times. A dedicated team of professionals will ensure sales, via in-house marketing and PR, and there will be a dedicated technical support line.
Norton Motorcycles has been in talks with Dorna about open slots in MotoGP during the 2012 season – the year in which MotoGP returns to 1000cc.
Norton boss Stuart Garner has confirmed he has been in talks with Dorna boss Carmelo Ezpeleta with a view to possibly having two grid slots for them in MotoGP for 2012. The revelation came after rumors started circulating in Europe. MotoGP returns to 1000cc in 2012, hence the interest. Garner has stated unless he can get a proper team together to do the job properly he will wait until he can, which could be some years down the line.
Anybody expecting Norton to resurrect the all-conquering Rotaries will be disappointed though; the plan is for a new four-stroke four-cylinder machine, although no further details are known as of yet about the engine.
Things are looking good for the annual UK show as 30 manufacturers have now booked exhibition space at the renamed Carole Nash Motorcycle Live to be held in the center of the UK at Birmingham late November. All four Japanese manufacturers have now confirmed along with the major U.S. and European marques, and there is now a dedicated website for all the up to date information on the show.
Historic race circuit Donington Park is back in one piece after the new owners patched up the track and re-opened it for business. However, it is still a long way off being re-used for world championship races.
Rest of the World
Dafra Motos are now building the BMW G650GS on a production line similar to the BMW plant in Berlin where all the staff were trained. BMW signed a deal with Dafra in 2009 to produce 1,000 machines a year, which have now risen to 5,000 given the success of the operation. It is expected this number will double by next year. (Brazil produces over a million bikes each year!)
Yamaha reported a growth in their yearly profit, saying that emerging markets are mainly responsible for the increase.
Jinan Qingqi, who are a venture partner with French company Peugeot Scooters, have announced that they are to open 145 sales outlets, plus nine flagship stores across China. Initially it will only be Chinese product that is sold, but this will change to French-made scooters joining the line-up in the near future.
The Japanese press has recently reported that Yamaha appears to have logged a group operating profit of roughly 30 billion yen, against a 33.8 billion yen loss a year earlier. It cites sales in emerging markets as a major contributor to the recovery, with sales in Japan, North America and Europe still down.
Believe it or not Vietnam is now the fourth-largest motorcycle market, following China, India and Indonesia, and sold 2.26 million units in 2009 – a 20% gain on the previous year. No wonder then that Honda is set to increase its bike production there by half a million, bringing its total to over 2 million bikes leaving the local Honda factory!