HD and MV

Of course the biggest news in the motorcycle industry is the purchase of MV Agusta and Cagiva by Harley Davidson. There had been a lot of speculation for the past weeks and it finally happed late last week. The move comes as a bit of a shock (to me anyway). Yes Harley has been looking for growth in other world markets, and yes there have been word that MV was up for sale (rumor was Volkswagen was at one time interested). But the two brands seem to have little in common. Harley as the maker of "old school" classic American iron, and MV/Cagiva makers of flashy sexy Italian machinery. On the other hand each have some common traits; they both make high dollar "passionate" motorcycles. Both have loads of brand equity and loyal customers. The biggest question is how the two (or three or four if you count all the brands) fit together.

It seems like the obvious reason Harley wanted MV/Cagiva is for a foothold in Europe where the Italian company has most of its dealerships. Another likely reason for the buy could be Cagiva's smaller less expensive models. Hopefully MV will benefit from Harley's deep pockets, although if Buell is any sign, growth will be slow. I'd like to see a return to Harley's Aermarcchi days. In the 1970's Harley had a line up of Italian singles as entry level bikes. Bringing in MV/Cagiva could help complete the Harley's model line up.

I think it would be far more interesting if Harley had gone after a different company. ATK for example. ATK is a US based off road motorcycle maker. The company uses innovative designs and Rotax engines. It seems to me this brand would have been a perfect fit with Harley's cruiser line-up and Buell's sports bikes. Another company that would make a good fit is Arctic Cat. Arctic Cat makes Snowmobiles and ATV's and is also based in the US. Either of these companies would add a lot of volume to Harley's operations and build their dealer network. But it should be interesting where this new US-Italian company is headed.

Battle for Europe: BMW vs KTM

There seems to be a growing power struggle raging between BMW and KTM. In recent years BMW Motorrad has had its eyes set on growth. The Bavarian company has expanded their model line up significantly. In the past BMW had a multiple variations of their parallel twin and flat four models along with the Rotax single G series. Lately we've seen the new line of singles based on the 650 single and a purpose built 450cc enduro. There's the special line of HP bikes built off the 1200 motor. And last but not least the introduction of the highly anticipated S1000RR super bike. In addition to this there's rumor of a 675cc triple (ala Triumph 675). It would seem BMW wants to be more of a full line motorcycle company rather than a touring/adventure niche brand.

And right across the border in Austria KTM has been flourishing. The off road company has become Europe's second larges bike maker (behind BMW). Like BMW, KTM has been growing. Recently (in the US) KTM has moved outside their off road market and moved into the street bike game. First there was the supermotos, then the Super Duke, and now the RC8. KTM has proven they can build a fine street bike as their new models have been praised by critics.

With both of these companies striving for market share there's bound to be some comparisons. It seems that BMW is filling segments where KTM has strengths. The BMW GS has the KTM Adventure. BMW is pushing their enduro program to attract potential KTM buyer. Even the sports bikes are likely to face each other head to head in super bike races both in Europe and America. In addition to this BMW acquired Husqvarna motorcycles (KTM's closest competitor) and KTM has been working on a partnership with US power sports company Polaris. It looks as though both companies are no longer satisfied with being small time niche players.