Benelli to Go Under?

While Ducati is recording all-time high sales figures, times are significantly tighter at Benelli, that other Italian motorcycle manufacturer. With many of its workers on part-time status (and with the Government paying part of their paycheck), production at the Benelli factory has been scaled back to around 1,000 motorcycles for 2009, down from the 20,000 the company had anticipated to make when it set it goals back in 2007.

This year, Chinese owner, Qiang Jiang, is taking a closer look at the Italian acquistion, with the possibility of folding the company not ruled out. This just a few months after Qiang Jiang pumped $26 million into the Italian brand.

In 2005 Qiang Jiang bought Benelli, which was struggling to stay afloat with its one bike pony show. The Chinese company paid off the debts of Benelli, restarted production, and introduced new streetfighter TnT models into the company product line.

At that point in time, Benelli was only making a limited number of motorcycles, but by 2007, Benelli was on its way to making several thousand motorcycles per year. Not content with that, Benelli stated it’s new goal to increase figures considerably. Benelli announced that they would aim for 10,000 bikes for 2008, and 20,000 in 2009. For those doing that math, that’s almost a 50% year-over-year growth level, virtually unheard of in any business, let alone one as entrenched as Benelli.

Benelli bet these sales figures on the fact that they would be increasing their product line, adding a new parallel and single twin bikes into the mix. The first of these bikes, the Due, is essentially the same Benelli triple, with one cylinder taken away, thus the bike would have 756cc displacement. Styling is an evolution on the TnT streetfigher appearance, and generally pleasing.

Last year, a prototype Due was unveiled to the general public, where it also got a positive response, but the bike remains to be vaporware, with the occasional sighting here and there. While the world waited for the Due to be released, it kept itself busy by nose diving into the recession.

The current economic struggle has hit Benelli hard, and seemingly consumers do not have the extra cash laying around to buy an expensive motorcycle that has a parts problem worse than Aprilia’s (and that’s really saying something). To combat this affect, Qiang Jiang invested another $26 million into the Italian company, hoping the cash infusion would push the brand back above water. Water Wings would have been a better investment it seems.

Talking about the current state of Benelli, Gianluca Galasso, the former World Supersport racer who works as Benelli’s PR chief, said the following:

“The recent plan was to produce 5000 bikes this year, but we couldn’t achieve it. The Chinese owners understand the problems and there will be meetings soon to decide Benelli’s future. Scooters will be built in China and motorcycles in Italy, apart from some low tech parts such as mirrors. At the moment Qiang Jiang doesn’t have the same quality and technical levels in China. What we can do is help them improve their quality and design to produce a better product.”

Times are tough indeed. When was the last time you saw a Benelli on the road? A quick look at a local Benelli dealer here in San Francisco, and we see that they have two bikes left out of the 5 or so its been trying to sell for the last 2 years…with $5,000 taken off MSRP. Ouch!

Source: Visordown