KTM Buys Husqvarna

Will KTM’s international marketing power help sell more Huskies? That’s the plan.

BMW and Husqvarna: maybe not the best fit after all?

BMW and Husqvarna: maybe not the best fit after all?

Poor little Husqvarna. Six years after acquiring the brand from Cagiva MV Agusta, BMW has decided there’s no place for dirtbikes in its future and sold Husky to Pierer Industrie AG, a holding company of Austrian investor Stefan Pierer, who owns 51 percent of KTM (Bajaj of India is the other major stakeholder, with 47 percent). Terms of the sale were not disclosed.

BMW and KTM each sold around 100,000 motorcycles in 2012, while Husqvarna moved almost 11,000 units. That 15.7-percent growth for Husky apparently was not good enough for BMW. From BMW’s press release: “In the context of changing motorcycle markets, demographic trends and increasing environmental demands, BMW Motorrad will expand its product offering to exploit future growth potential. The focus of the realignment will be on urban mobility and e-mobility.” Translation: Maybe the company was wrong to think it could get yuppies to like dirtbikes?

Some see Pierer Industrie AG’s acquisition as good for Husqvarna. The Economic Times, a business paper in India, reports: “The acquisition will strengthen KTM's presence in Europe and will help the Austrian brand maintain its leadership position. KTM recently overtook BMW, and the acquisition will help KTM create a second brand in the region.” The story continues: “KTM is expected to gain synergies on technology, distribution and the economies of scale from this acquisition. Husqvarna and KTM compete in the European market on price, but these brands have different attributes. KTM may utilize its own aggregates like the engines and vehicle platform to develop new Husqvarna motorcycles in the future, said people close to the development.”

In a Bloomberg report, Pierer said Husqvarna didn't fit in with BMW's long-term strategy, and that he aims to end losses at the brand by 2014. The report goes on to say that Pierer plans to retain Husqvarna's focus on off-road bikes while using KTM's international marketing experience to facilitate expansion. Bloomberg says KTM sales rose 32 percent in 2012, to 107,142 vehicles, with strong growth in India.

Meanwhile, Bruno DePrato, our man on the ground in Varese, Italy, reports: "As you may expect, there is a lot of concern among the workers at Husqvarna, who have been kept in the dark until today . In spite of the fact that BMW poured great energy and money into the Varese factory's revitalization since 2007, some Husqvarna insiders privately told me that in any event things can only improve."

Husqvarna North America National Marketing Manager Corey Eastman is headed to meetings this afternoon to find out what the future holds. At this point, all he can say is that he's excited about the future and hoping for the best. And perhaps wondering how soon he can get his hands on an 1190 Adventure?

“I love KTM, I’ve owned lots of KTMs, and I think there’s plenty of room for our Husqvarna brand’s “Ride More” and KTM’s “Ready to Race” taglines. I’ll let you know more when I can,” said Eastman.

Good luck, Husqvarna.