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Euro Gossip March 2010

Tuesday, March 9, 2010
Things are still relatively quiet this side of the Atlantic this month, although you will see from this issue of Euro Gossip that tire companies seem to be quite active, even if the bike manufacturers are not. Unfortunately despite the mainstream media making statements about economic recovery and the end of the recession having arrived, disappointing sales figures continue to dominate industry news from all countries. According to recent figures, registrations of Powered Two-Wheelers (PTW’s) plunged in the final quarter of 2008, and for 2009, a drop in the range of 25% was recorded.

Ahh  the beauty of Italian engineering.
The CEO of Ducati is campaigning to get more two-wheelers on the road.
Not surprisingly, with these headline grabbing numbers, ACEM, the European association of motorcycle manufacturers, called for a common strategy to overcome the crisis and move towards recovery at its yearly January conference in Brussels. To back up their claims to individual governments, it is pointing out that in Europe the PTW sector employs 150,000 people with a turnover of Euro 34 billion.

Gabriele Del Torchio, CEO of Ducati, has highlighted the need for supportive measures for the PTW industry, calling for swift action to ensure that the European industry is in the best position when the recovery starts. In addition, ACEM claims that the fall in demand of PTW’s is exacerbated by the import of low-cost products from Asian countries. As a result the European Commission is preparing to submit a proposal for a new technical regulation for the type-approval of PTW’s. Often imported products from emerging markets like China are causing serious concerns due to safety and environmental flaws and the fact that often these vehicles often do not meet type-approval requirements!

Austria

KTM Logo
KTM responds to statements about Bajaj increasing its stake in the Austrian company.
Austrian manufacturer KTM has hit back at stories suggesting that its Indian partner Bajaj is set to increase its share in the company from 30% to 90%. A press release from the company said it has returned to profit after a difficult year and, following on from successful restructuring measures, figures now show a clear profit of €3.6 million for the first quarter of the current financial year.

The release went onto state that while 17,056 motorcycles were sold in the first quarter of 2009/10, down 15% compared to the previous year, it felt this was better than some competitors and there is no cause for alarm. Further, that despite some need for more capital, the 'industrial leadership' of CROSS Industries and KTM Powersports AG., CROSS Industries will continue to hold more than 50% of the shares in KTM Powersports AG despite the rumors circulating.

France

French tire giant Michelin has recently released the Michelin Power Pure, which it claims is the lightest sports motorcycle tire in its category. It apparently weighs two pounds less than competing tires in the same category and is the lightest dual-compound tire ever approved for road use.

Thanks to the reduction in weight, it claims unmatched handling with greater responsiveness along with greater safety and longevity. Safety comes from the second-generation, dual-compound technology developed specifically for the ‘Power Pure’. The soft layer of rubber on the tire’s shoulders has been widened to provide excellent traction when cornering and the longevity comes from to the extra depth of its tread. Michelin state that both the front and rear tires are now available in two and four sizes respectively, so there should be one for most current sports bikes.

In Europe Peugeot (www.peugeotscooters.com) is probably best known for its cars rather than its excellent scooter range, despite having produced two wheelers for over 100 years. It has been making the former since 1858 with the distinctive Lion motif on the bonnet as well as discreetly displayed on the bikes.
Peugot LXR Scooter
Peugot is introducing its newest model, the LXR125.

Despite having survived for so long, it has now finally been changed to a simpler design, “with a more dynamic posture and bimetallic effect”. This applies to both two and four wheels and as part of the modernization process, Peugeot will now have ‘Peugeot Scooters’ as a separate entity to reflect its position in the PTW marketplace.

As well as a new motif and name they have just launched the first of their new model range, the big-wheel LXR125 as such machines are very popular in Italy, the traditional home of the scooter. Larger wheels do offer superior handling over poorly maintained surfaces and are easier to maneuver in crowded city streets, something common to all European countries. Power comes from the latest Euro-3 compliant 125cc, four-valve, liquid-cooled 4-stroke producing 12.5 hp. Its 16-inch wheels, twin rear shock absorbers, while stopping power is provided by 220mm disc brakes front and rear.

Sources also suggest that this year will see the e-Vivacity electric scooter appear along with the CompactWP seen at recent shows. In addition there is likely to be a three-wheel Hybrid Evolution coming from one of Peugeot’s French factories. Production of some of the smaller machines will be transferred to China to keep costs down.

Germany

Yet another new sportbike tire has appeared this time from German manufacturer Continental called the Conti Road Attack 2. It follows off from its original tires, which Continental's R&D engineers in Germany have adapted the tire tread and compounds to utilize the latest developments in tire technology. The company claims this variant achieves superior performance and greater wet weather capability compared to its predecessor. Better handling and longevity are also claimed to have been increased.

One of the reasons for overall improvements is the use of 'Black Chili Compound' containing silica and carbon black,
BMW
BMW reports a downward turn in sales for the year.
as used in the racing world. Including this means faster warm-up times to give better grip straight away, especially on wet roads. Continental will be producing the tire in six front sizes and seven for the rear and fitting approvals have already been obtained for over 250 machines from manufacturers including BMW, Honda, Kawasaki and Yamaha. 

BMW retail motorcycle sales globally fell by 14% last year with just 87,306 bikes being sold.

Italy 

Moto Morini who are in well documented financial difficulties and currently trading under Italian voluntary liquidation laws, is now only producing machines to order.
Total output last year was 1200 units, well below the 2000 needed to break even.

Inside sources at the beleaguered MV factory (www.mvauguata.it) at Varese state there are now two potential buyers for the marque that was put up for sale last year by Harley-Davidson. Strong orders and interest in the new models shown at the Milan show has strengthened interest in the historic company, but nobody is saying who the bidders are.

Meanwhile work on MV’s 800cc three-cylinder machine has been halted pending the sale. Sources claim the bike, which started out as a direct rival to the Triumph 675, is 95% ready for production and has been 100% reliable during extensive testing.

The 1090RR Brutale is the latest creation under the new MV Agusta Harley-Davidson partnership.
A change in ownership may be in the works for MV Augusta.
There might be a shortage of buyers, but there is no shortage of interest in two wheels in Italy at least! A recent Motorcycle Expo in Verona attracted 100,000 visitors over the three-day event. Over 700 brands were represented in seven halls with traders reporting good business.

Premier Italian clothing brand Dainese appears it is not immune from the current economic climate and is has seen a 25% drop in demand for its premium clothing. As a result its is moving manufacturing to Tunisia in North Africa, with 200 jobs being lost from its factory at Vicenza. However, this will remain the HQ and base for design and the manufacture of leathers for supported world class riders like Valentino Rossi.

Ducati (www.ducati.com) CEO Gabriele Del Torchio has announced that Italian tire manufacturer Pirelli will be its OE tire from now on and the two companies will work closely together on technical and manufacturing matters.

Switzerland

Polaris has just announced its has taken over Swissauto Powersports (www.swissauto.com) with whom they have had a long association - the European company helping develop some of its engines. Based in Burgdorf, Switzerland and founded in 1987, Swissauto Powersports has expertise in designing and developing high-performance and high-efficiency engines and innovative vehicles. It has been involved in MotoGP for some time and in fact its V4 2-stroke 500cc engine had 29 wins, 41 Poles and 3 World Championships during the 1990s.

Not only was the Swissauto Powersports engine good, but a new racing bike was also developed by them and competitive against the Japanese factories during the late 1990s. This bike achieved the pole position twice during its first season of racing and ranked in the top ten several times before the company pulled out to concentrate on their core business of engine development.

United Kingdom

Triumph (www.triumph.co.uk) continues to introduce some limited editions to tempt customers who want something a little different. First up for the ‘limited run’ treatment is the 1600cc Parallel Twin Thunderbird cruiser in factory-fitted ‘soft
Triumph 675 SE
Triumph introduces its limited production 2010 Daytona 675SE.
bagger’ trim. Finished in Carnival Red, the ABS-equipped Thunderbird SE comes factory-fitted with over £2,000 of genuine Triumph accessories. These include a detachable roadster screen with lower air deflectors, leather panniers, detachable sissy bar and rack, rider and passenger footboards and a long haul touring seat

Next up is the Daytona 675, which has already come into the specials class before last year and now it comes with an even higher specification. The 2010 Daytona 675SE comes loaded with over £500 worth of accessories in addition to yet another special Pearl White paint job on a blue frame. New graphics, white striped wheels, race-inspired brake and clutch levers and a host of carbon fiber parts from Triumph’s accessories catalogue complete the make-over.

Items here include Triumph’s new adjustable, machined alloy levers, similar to those found on the company’s world Supersport racers, while the carbon fiber heat shield, exhaust cap, cockpit infill’s and rear hugger complete the factory racer look. Mechanically, there are no changes although customers can pick items from the official catalogue if they want even more performance to go with the looks!

Following on from our lead story about European sales, with January's extreme weather and the generally acknowledged poor retail start to the New Year, registration figures for all classes of Powered Two Wheelers (PTW’s) in the UK for the month showed a 42% drop compared to a year ago.

This continues a general downward trend in sales and the Motor Cycle Industry Association has now asked the UK Government for support for the industry and some parity with the car sector.

According to the 2010 Industrial Assessment the UK motorcycle industry plays a significant part in the UK economy. Despite PTW’s making up just 1% of UK road traffic, the industry still directly employs 62,000 people in over 5,700 companies, without counting those who get contract work from them.
Motorcycle Industry Association
The Motor Cycle Industry Association has requested assistance for motorcycle manufacturers from the UK Government.

Despite many of the products sold coming directly from overseas sources, the UK motorcycle industry itself still generates £2.75billion per annum thanks to sales of over £5billion and contributes just under £1billion in taxes to the government.

Part of the MCIA pitch was to seek commitment and support for the motorcycle industry as an integral part of the automotive sector. The MCIA feels the motorcycle industry was overlooked for various business support programs, including the car scrappage scheme when the government stepped in to help the car sector. (Sales of PTW’s in Italy have increased as result of similar scheme for PTW’s instigated by the Italian government)

The delegation pointed out that PTW use has many characteristics that are important for improving the overall transport structure in the UK and PTW use will help the Government to meet its own targets.

This is particularly true when talking about congestion and pollution and overall PTW’s can help to cut business costs. In addition machines can help provide cost effective transport for those in rural areas as well as providing effective transport for shift workers in the private and public sector.

There is some good news though after large research firm Mintel predicted that sales of new motorcycles and scooters will rise strongly over the next five years. According to them, the UK new motorcycle market is forecast to grow by 60% in the next five years alone. Following the 21% collapse in new bike sales in 2009, sales of new machines are predicted to reach a breath-taking £895 million by 2014. Meanwhile, volume sales will increase by an impressive 41% with bike units set to rise to 157,300 in 2014 - up from 111,500 in 2009.

These figures show that while there are only 1.16 million motorcycles and scooters in use compared with 30.3 million cars, the popularity of motorcycles and scooters is underlined by the fact that the number of motorcycles in use has grown at a faster rate than the number of cars. Between 1998 and 2008, the number of cars in use increased by 24%, meanwhile, the number of motorcycles and scooters in use increased by a staggering 71%.

The 15-stong team at Martin Conquest design and build high-performance motorcycles for those with disabilities from the waist down. Manufactured in Hyde, Cheshire in the north of England, the wheelchair carrying motorcycle is soon to be launched in the USA. Martin Conquest has now signed a deal with American adapted vehicle specialists Mobility Works to manufacture and distribute its new 1200cc, BMW-powered “Conquest” motorcycle through its 55-dealer network.
Bajaj logo
Indian manufacturer Bajaj is shifting focus to street bikes instead of scooters.

Rest of the World
India

Bajaj, (www.bajajauto.com) KTM’s partner has announced that it is to give up the manufacture of scooters and concentrate on motorcycles. Managing Director Rajiv Bajaj has stated his intention to become the largest producer of motorcycles in the world.

Meanwhile the managing Director of Hero Honda, (www.herohonda.com) Pawan Munjal, who actually is the world’s largest, has stated it’s on target to beat last year’s figures by a staggering four million units. The company only produced its first motorcycle in 1985 and by 1994 has seen its millionth bike roll off the production line This figure topped 25 million in 2008 and in 2009 the company launched six new models.

Japan
Latest figures from Japan do not make happy reading in anybody’s books. Yamaha (www.yamaha.com) has just posted a 216.2 billion yen loss for the year ending December 2009, which is nearly 30 billion more than its previous forecast of a 182 billion Yen loss. Actual sales were up by 53.6 billion yen on the previous forecast for the period, but still some 28% down from the previous year.
2010 Yamaha YZF-R1
Yamaha has posted a large loss for 2009, with hopes that growth in the Asian market will revive its fortunes. Selling a couple thousand MotoGP-liveried R1's wouldn't hurt either.

In real terms this means is that actual motorcycle production fell to 160,000 units in 2009, about half of the 2008 figure. Yamaha actually forecast last summer that 2010 production would rise to 240,000 units. It has now revised that forecast to 190,000 units. Yamaha, like others, are pinning its hopes on expanding markets in the Far East for low cost models and cutting costs by sourcing more parts in China and India. To go with this Yamaha has also 'restructured' production at a number of plants in Japan and North America and suspended production at a plant in Italy. Other measures include 'voluntary' early retirement for around 800 workers.

Suzuki's (www.suzuki.com) motorcycle operations also saw an operating loss of about 8.6 billion yen in the October-December quarter following on from the previous quarter's 2.6 billion yen loss!

On more positive front Japanese tire manufacturer Bridgestone is set to launch a brand new bike tire, the Battlax BT-023 designed for the replacement market and itself replacing the BT-021 tire. Bridgestone claim the new tire is a great crossover model for riders who enjoy both touring and sport riding. It significantly upgrades the performance of its predecessor by offering improved mileage and better performance in the wet, as well giving improved grip and steering control.
Recent Euro Gossip Columns
Euro Gossip: October 2010
Mandatory motorcycle inspections in Europe anger riders while motorcycle companies around the globe prepare to release some of their closely kept secrets in the upcoming bike shows.
Euro Gossip: September 2010
What does the Ducati-Valentino Rossi marriage mean for the Italian marque's bottom line? All this and more in the September issue of Euro Gossip.
Euro Gossip: August 2010
In an effort to cut costs the new coalition Government in the UK has decided to turn off speed cameras. Find out more details on this and other news in our latest edition of Euro Gossip.
Euro Gossip July 2010
A new Ducati custom that makes the Desmosedici seem cheap! All this and more of the latest motorcycle news from across the pond in our latest edition of Euro Gossip.
Euro Gossip June 2010
BMW denies a 600cc Supersport and swallows a massive recall, while Donington Park may be back on the future SBK and MotoGP schedules. All this and more in the latest missive of motorcycle industry news from Europe.
Euro Gossip: May 2010
Read about British politicians calling motorcycles widow and orphan makers, a possible water-cooled Boxer from BMW and more tasty motorcycle rumors from across the pond.
Euro Gossip April 2010
Europe limiting motorcycles to 100 horsepower, a new Triumph tourer and three months in the slammer for a wheelie? Read more in our latest Euro Gossip installment.
Euro Gossip February 2010
Some interesting news from across the pond this month includes Triumph’s sales triumphs and an intriguing four-wheeled motorcycle – the 4MC.

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