Last Friday, Harley Davidson announced their acquisition of the Italian motorcycle manufacturer, MV Agusta, and many have weighed in on the pros and cons of the move, some think it’s a good idea, others aren’t so sure. If you haven’t made up your mind, consider what else is going on in the U.S. business environment and then look at Harley’s move again.
Over the weekend, Anheuser-Busch was taken over by Belgium-based InBev. That’s right, the American King of Beers will now be owned by a European firm. GM, Ford and Chrysler are bleeding dollars. Many U.S. companies are slipping under water or being purchased, and yet, Harley Davidson, though not unscathed by any means, is actually expanding around the world.
Harley Davidson is celebrating 105 years in business, think of all of the firms that have come and gone during those years, and while U.S. automakers are selling off brands and letting others die, while custom motorcycle manufacturers are falling left and right, while companies like BMW are encountering a slowdown, Harley Davidson buys MV Agusta and expands in Europe. Yes, scooter sales seem to be up as a less intimidating option for drivers looking to save on gas but heavyweight motorcycles aren’t flying out of showrooms. Harley Davidson is nevertheless, opening dealerships in China and Taiwan, they’ve introduced their new XR1200 in Europe, they’re doing OK, and now they are making their line broader with MV Agusta. The engineering influence in both directions could have an interesting effect and the marketing efforts of The Motor Company could help MV Agusta in Europe and the U.S..
There’s no guarantee this will all be positive, the move may stumble for reasons unforeseen, but Harley deserves praise for making a move that could give the brand a larger presence world wide and more stability as the brands support one another. Criticize the move if you want, my bet is on Harley.
Mr. Tanshanomi says
This is a purchase that should have never happened, only because MV Agusta (then Aermacchi) should have never been sold back in the ’70s.
When AMF divested themselves of Aermacchi’s motorcycle operations (among a zillion other things they did to wreck the brand), the Castiglioni brothers bought the Aermacchi works and changed the name to Cagiva. Now, they’re selling what is basically that same company (now called MV Agusta) back to HD.
This is not foreign territory for Harley (sorry for the pun). Cagiva/MV Agusta should have remained a Harley brand all along. They’re just (finally) undoing the last remaining scar of AMF’s incompetence.
HotRodTroy says
I wonder if they are going to go after the Hyosung branded motorcycles also. I have noticed a few H-D dealerships selling the two brands (MV and Hyosung)side by side. Just something to ponder. Maybe they have noticed some of our comments.
chris says
it’s a sad day for america…selling our top brand of beer…I’m scared of what the future holds for all of us if we can’t even keep our beer in our own country.
Skadamo says
I think thisis a sign that American companies can choose to get with the times or get sucked up by companies that already did. I am proud of Harley for being proactive. I will praise them if they suceed.
So how is Harley owning MV better than 2 companies standing alone? Must be an economies of scale thing? Is Harleys management more business savey?
I assume Harley will apply thier marketing and merchandising techniques to MV and build MV revenue. Also leverage dealer and supply chains. Also R&D.
Go Harley! Hope they pull it off.
todd says
That’s a little off.
MV Agusta was never Cagiva. MV (Counts Vincenzo and Domenico Augusta) started making motorcycles in 1945. MV was sold to Cagiva in 1991. Cagiva was founded in 1950 by Giovani Castiglioni in 1950 and started motorcycle production in 1978 (mainly the purchase of Aermacchi). Aermacchi was founded in 1913 and began producing motorcycles in the late ’40s.
Don’t discredit the value of the AMF purchase. There would be no Harley Davidson (or bowling lanes) if it wasn’t for AMF. That means no Buell either, no V-Rohr. The Discovery channel would have to come up with some other niche to exploit like speed quilting.
There is some sort of tie with Cagiva and Hyosung. There have been plans to use the Hyosung engines in Cagiva product. Beyond that, I don’t know.
-todd
todd says
Back to the topic;
It takes a bold company to invest during down times. In fact, despite how difficult it is to step out when most companies are tucking in the hems, it is the best time to invest. Just like it’s a great time to buy a house now that the market is down, a great time to buy stock when stocks are down, a great time to buy an SUV… no, wait, strike that last one.
I don’t care much for Harley’s product or image but as a smart (and lucky) company they do make very good decisions.
-todd
Walt says
As the Easy Rider generation approaches retirement (I’m one of them), so does Harley’s core customer base. Eventually they’ll be too frail to handle anything heavier or more powerful than a walker. Harley’s got to do something to appeal to a younger or different demographic.
With MV they get an upscale boutique sportbike brand with historic racing cred, a foothold in Europe (again) and perhaps more youth appeal. Buell builds a credible American sportbike. Maybe one or both will help head off a demographic wipeout for the Motor Company. Led Zeppelin (and sportier products) helped Cadillac steer away from a similar fate as the old guy’s ride.
As to Budweiser, I wouldn’t drink it for free. We have dozens of micro brews here in the Northwest that pack more taste and character in a bottle than you’ll find in a case of Bud, the Wonder Bread of beers.
Dave says
No doubt HD is an awesome marketing company. Starting from a small garage they have grown into a multi-national conglomerate with a strong foundation. I would even go as far to say they could stop building bikes for a couple of years and still make a profit on clothing and accessories 🙂
Not being a fan of the bad ass biker image, this acquisition may open up a whole new market for them.
This is unfortunately the dark side of corporations, the need to continually acquire, the juggernaut cycle of maximum investment returns and using profits to purchase weaker entities to offset tax burdens.
“Harley deserves praise for making a move that could give the brand a larger presence world wide”. I’d be hesistant to find anyone in the world who rides motorcycles and maybe even scooters who doesn’t know of the HD name.
WRXr says
Buying Cagiva/MV gives HD two things::
1. A Super Premium sport bike maker
2. A premium Small displacement Bike/Scooter maker. This n my mind is by far the more important, as small displacement bikes will become more and more important in the next years…as if they weren’t already/
Both brands are premium, which is important for H-D’s portfolio, but neither will dilute H-D’s image. Great acquisition on paper.
…now they just have to make it work.
B*A*M*F says
WRXr has it right. Motorcycling is, in many ways, back where it was in the 1960s. Back before you met the nicest people on bikes from the other side of the world. I see wannabe stunters pulling wheelies in traffic on the highways. Weekend warriors on domestic and domestic looking bikes generally want to present a tough guy/badass image.
Motorcycle culture has become pretty fragmented and splintered into subcultures. I have a hard time finding anything fun about picking a subculture label and slapping it on myself. I could just as easily enjoy riding a Harley as I could a Japanese liter bike. Probably as much as I’d enjoy going home with either the blonde or brunette at the bar on any given weekend. In an ideal world, you’d be able to have both. For most, that’s not a reality. Nor is the one you take home briefly always the want you would want to live with on an extended basis.
What I, and most other people are looking for in a bike is fun. I want something that I can hop on and enjoy riding. I want something that’s just as fun taking to the grocery store as it is on a ride on my favorite back road. I don’t see a lot of new bikes out there that are good at offering both experiences.
That type of bike is going to be where the market will grow the most. It will be the bike that will get people who have not ridden before.
I would be shocked if the Motor Company doesn’t have a crack team of people who already know that and are working on a product to offer. Getting MV and Caviga might just get them there a bit sooner.
Jeff says
Better HD buying MV than the other way around .
therock says
BAMF, I like your post. You are spot on with all the subcultures.
Harley and MV already have something in common. They are both the weekend warrior ride of choice. Makes perfect sense to merge.
Personally I belong to the “I ride every day and commute, rain hail or shine” subculture and both Harley and MV are not attractive to me as a work horse. However both are not really in that space anyway. I think Harley knows this and know their strengths.
What is interesting to me is what’s going to happen to Buell.
I admire them greatly and love their little streetfighters.
As a customer, I would never buy a Harley or an MV Augusta. I’m glad that they exist as both are quite exciting to have around.
But really I’m only interested in the Buell bikes.
Congratulations Harley on acquiring a company that makes unbelievable machines, but whatever you do, please let Buell run wild since they have the most exciting ideas in the business IMHO.
Jim says
Whether from a product and sales perspective this is a good idea is something we’ll have to see. But I wonder about the financial realities of this deal. The dollar is woefully depressed relative to the Euro, making this deal more expensive for HD than it would have been say 3 years ago. By contrast Inbev’s purchase of AB is subsidized by the currency exchange rates.
Eventually the value of the dollar will rise, making it even more difficult for HD to get a return on this investment.
PUSkunk says
Interesting, the only reason Harley is still in existence is the over-700cc tariff from the 80’s. Harley didn’t make it 105 years through the quality of its’ products, it did it through absurd brand loyalty and government intervention.
Mr. Tanshanomi says
MV Agusta was never Cagiva? Say what?
Cagiva purchased the MV Agusta name in 1991. At the time, MV Agusta was an empty corporate shell that had not built a motorcycle since 1980.
Even though Cagiva has used the more historically prestigious MV Agusta as their corporate name since 1999, what HD bought is clearly the Castiglioni Brothers’ company — not the Agusta Brothers’.
Bazuzeus says
Hé monsieur, au moins on va vous apprendre àfaire de la vraie bière une fois voir, hein dis fieu (non peut-être ?)
I’m still not sure I’m happy MV is now owned by HD
kneeslider says
PUSkunk said: “the only reason Harley is still in existence is the over-700cc tariff from the 80’s.”
Can you name one motorcycle company, from any country outside of the U.S., that has never been protected by a restrictive import tariff or regulation?
todd says
I would guess BMW and Triumph among other european makes. Maybe we need a Restrictive Import Tariff history lesson if not.
-todd
Dr. Gellar says
I agree with WRXr and B*A*M*F, regarding fun, small displacement bikes and the significance of the Cagiva brand in HD’s purchase of MV Agusta. This may be a little off-topic, but has anyone seen Malaguti’s MR250 prototype? It’s a beautiful scrambler/roadster-style bike powered by a 250cc 2-stroke engine. This is one of the kinds of bike I can see Cagiva making in the near-future. If not with a 2-stroke engine, then a good 450cc liquid-cooled single or even a similar sized twin like Aprilia’s RXV/SXV engine. I myself would like to see something like this in the near future.
B*A*M*F says
A friend of mine has a Malaguti scooter, and it’s good looking, but not compared to that MR250 concept. That’s definitely the kind of bike I want. Simple, fun, light, and not a chore to ride. Though I’ve ridden (and enjoyed) big cruisers and Gixxers and such, my primary objection to them is that they are a lot of work to ride compared to your average old-timey standard bike.
With the cruisers it’s the weight, with the sport bikes it’s the high revving engines. As awesome as they are, it’s nice to have torque at a reasonable RPM level. I think there will be demand for those types of bikes, particularly for the foreseeable future. However, I think there will be a lot more growth in sectors we don’t see right now.
Ted says
My view right now is that Harley are confused. I placed enquiries with three different dealerships in order to buy a Rocker C and have yet to receive a response. If that is how things begin, I’ll stick with BMW and be quite content. As for expansion, if you are neglecting income from existing customers while messing with exotic brands, look for a hard fall, and soon. Oh, and spend some money on new stylists. V-Rod technology should be matched with corresponding style and it’d sell like hotcakes. As I said, the company is confused…