Tag

finance

Browsing

More doom and gloom for the motorcycle industry, as Ducati Motor Holdings sales are slumping for the 2018 model year. Selling 32,250 motorcycles so far this year, the Italian brand is short 7.4% the volume it sold this time last year. To translate unit sales into fiat currency, the 32,250 motorcycles sold equals €448 million in revenue going into Audi’s coffers. Of note, Ducati’s revenue contribution to Audi AG accounts for 1.4% of the automaker’s total revenue. For the second quarter of this year, Ducati sales were down 8.9% compared to Q2 2017. This means that 20,319 Ducati motorcycles were sold in Q2 2018, compared to the 22,300 sold in Q2 2017. All segments for Ducati are down, except for its “Sport” category (SuperSport and Superbike models), which is up 29%.

After a dismal 2017, there was some hope at the start of 2018 that the US motorcycle industry would begin an upward climb. The industry seemed enthused and optimistic, though no one could pinpoint why they felt that way during our talks with executives and insiders. Now, it seems that positive energy was simply that…nothing tangible, as the first results from Q1 2018 are beginning to trickle out of OEM headquarters. First up, Harley-Davidson. Releasing its Q1 2018 report, Harley-Davidson is reporting a global decrease in sales to the tune of a 7.2% drop compared to its 2017 figures, which breaks down into a 12% drop for the US market, with the international market flat at 0.2% in positive growth.

The Motorsport Aftermarket Group (MAG) announced that it has successfully concluded its Chapter 11 proceedings, after the bankruptcy court accepted the company’s plan for reorganization and debt recapitalization.

As a result of the bankruptcy process, MAG is under new ownership, with creditors Monomoy Capital Partners, BlueMountain Capital, and Contrarian Partners now in control of the massive motorcycle parts, apparel, and commerce conglomerate.

For those who don’t recall, MAG entered Chapter 11 back in November 2017, with the debts of the company spreading out through the group’s many owned brands.

Harley-Davidson has announced its strategic investment in Alta Motors, which will see the two American companies co-developing two new electric motorcycle models. As one can imagine, the news has big ramifications for both brands. For Harley-Davidson, it means having access to cutting-edge electric vehicle technology, and a technical partner that can help them navigate the coming shift to electric drivetrains. And for Alta Motors the news is perhaps even more impactful, as Harley-Davidson brings not only a key monetary investment into the San Francisco startup, but the deal likely provides access to a variety of assets for Alta, namely purchasing power with parts supplier, access to a worldwide dealer network, and instant credibility with other future investors.

A bit of a housekeeping item, but today it was announced that MV Holding has completed the acquisition of the shares that were previously held by Mercedes AMG, thus effectively removing the German brand from the Italian motorcycle company’s business operations. This means that MV Agusta is now solely controlled by Giovanni Castiglioni and the Sardarov family, though today’s news is likely due to investments by the latter, into the struggling motorcycle brand. For fans of the MV Agusta brand, this surely is the start of a new chapter for this mercurial motorcycle marque. In case you haven’t been keeping track, the ownership structure for MV Agusta is very complex, and it involves several layers of ownership.

The Yamaha Corporation announced today that it will be selling 8 million shares of its holdings in Yamaha Motor Co., a movement of shares that will see roughly 2.3% of the voting power in the powersports company changing hands. This deal is expected to close on December 4th, and the Yamaha Corporation says that it will be selling its position to various unnamed securities companies, presumably to then be sold on the open market. At the current market price for Yamaha Motor stock, this deal should be worth close to ¥26 billion, and ¥18 billion after tax expenses have been factored. The news means that while the Yamaha Corporation will remain the single largest shareholder in Yamaha Motor Co., its ownership position as a shareholder will drop from 12.22% to 9.93%, as a result of the divestiture.

The Motorsport Aftermarket Group (MAG) is not a name that motorcycle enthusiasts are usually familiar with, but the family of brands that the company owns certainly is: Performance Machine wheels, Roland Sands Design, Renthal handlebars, Vance & Hines exhausts, Tucker Rocky, J&P Cycles, etc. The network of brands has been struggling over the recent years though, and today we learn that many of them will be filing for Chapter 11 bankruptcy, while the overarching MAG Group business restructures its debt and finds new ownership. While this is not the sexiest news story to happen in the motorcycle industry this year, it is certainly one of the most important and complicated. As such, we will try to break it down in a digestible way for you.

The hits keep on coming, in terms of Volkswagen’s plans (or non-plans) to sell its Italian motorcycle manufacturer, Ducati Motor Holding. According to the latest report from Reuters, the votes are lacking on supervisory board for Volkswagen, when it comes to selling Ducati and transmission-maker Renk. The lack of votes at the Volkswagen board isn’t a new problem, of course, with the German company’s labor unions accounting for half of the board seats, and reportedly very unenthusiastic about selling either brand. “The employee representatives on Volkswagen’s supervisory board will neither approve a sale of Ducati, nor one of Renk or MAN Diesel & Turbo,” a spokesman for VW group’s works council told Reuters this past weekend.

MV Agusta has finally closed a very important funding round, getting equity investment from ComSar Invest, which is backed by the Black Ocean Group, which in turn is owned by Russian billionaire Timur Sardarov. The move sees MV Agusta able also to repurchase its stock from Mercedes AMG, which previously owned a 25% stake in the Italian motorcycle manufacturer. The details of the ComSar deal however have not been disclosed, though we do know that the deal includes enough cash to finish MV Agusta’s recapitalization plan with its creditors and to begin its new, more focused, business plan for new models and motorcycle production. According to MV Agusta’s press release, the newly financed recapitalization plan has already been approved by a quorum of the creditors.

Any hopes of the US motorcycle market making gains in 2017 appear to be going out the window, as Harley-Davidson reports that its Q2 2017 sales are down a whopping 9.3% – prompting the Bar & Shield brand to readjust its delivery numbers to dealers in the United States. Sales worldwide were equally bleak for the American company, with international figures down 2.3% for the same time period. This means Harley-Davidson’s combined worldwide sales numbers are down 6.7% for Q2 2017. As a result, Harley-Davidson CEO Matt Levatich said that Harley-Davidson would see a reduction in its workforce, though he would not offer specifics on what that could look like for its mostly union workforce.

The Circuit of Wales, the track which was to be built near Ebbw Vale in South Wales, has been dealt what will likely be a fatal blow. Today, the Welsh Government rejected the request of the Heads of the Valleys Development Company to underwrite the debts incurred for the construction of the circuit.

The HOTDVC, the company that had been set up to build and run the project, had originally requested that the Welsh Government underwrite the full £280 million cost the project had been expected to cost.

After years of negotiation, the estimated costs had risen to £433 million, and the Welsh Government refused the HOTVDC proposal to underwrite half that debt.

The Welsh Government had demanded that the HOTVDC find external investors, and the firm had brought in outside money from UK investment firm Aviva, but Aviva had only agreed to become involved if the Welsh Government had promised to underwrite the project.

With the Welsh Government refusing to underwrite the debt, Aviva’s commitment now looks to be at an end.