Giovanni Castiglioni welcomed me into the smartly refurbished headquarters of MV Agusta. Since I last saw him at EICMA 2015 he has grown a long beard and hair. Lean and tall, he now looked like a modern John the Baptist in jeans. Here we discuss the immediate future of MV Agusta.
Giovanni Castiglioni: “All the rumors about the tight times MV Agusta is going through after closing the deal with AMG, have made all negotiations with potential new partners bumpier than they already were. But certainly MV Agusta is sailing a rough sea. Yet the situation is pretty contradictory. In 2015, we built 8,500 bikes and our gross income exceeded 100 million euros, which is our high-mark. Still, we are in a deep crisis for liquidity because our costs are excessive. I made an accurate analysis of the market situation around the world and of our product line in relation to it. Our three-cylinder models give us a solid standing in the intermediate displacement class, but in this class the net return per bike is limited, or we would just go out of the market itself. We need a new four-cylinder superbike, and the engine should be based on this very good triple which is rational, compact, and delivers excellent performance.”
Bruno dePrato: But the superbike market is declining fast, Giovanni, would it be worth investing new money on it?
Giovanni Castiglioni: “Look Bruno, without a high-return product we are stuck in a vicious circle because we are a large enough company with well tooled-up premises and a number of workers exceeding our present production numbers. And I am not talking of the workers on the production lines, they are wonderful guys, highly specialized and even more dedicated. I still have to trim the number of white-collars. Sorry about that. We applied for Chapter 11, by October we shall have the final verdict from the court, so now I have to freeze the situation and get the best out what we have. Indeed the superbike market is shrinking, but a top-of-the-class MV Agusta Four still has the potential to conquer that share of market that, by our dimensional standards, will saturate our present production potential, but with the perspective of much higher return per bike than we can ever hope to make on the three-cylinder models. MV Agusta should not grow beyond its present size, but must optimize its product line in relation to this size, which is not an easy to manage one: we are too big to be regarded as a typical, super-high standard Italian artisan, but too small to be competitive against the real industry-sized competitors. There is a Middle-Earth where we can positively handle our image. Maybe I need to prune our present line of three cylinder models, add new ones more strongly related to the MV Agusta tradition. It is all in the plans. But first I need to find the financial support to close the debts and invest into new products: that dream Four I keep talking about. Until then all I can do is hold fast. This is my father’s company, I am not going to give it up so easily, you can bet on that.”
According to Castiglioni, MV Agusta needs no less than 30 million euros to get back on track, but 50 would be allow it to immediately start the new Four-cylinder project. Stay tuned.