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Pierer Mobility, KTM AG Takes Over MV Agusta

Pierer Mobility, KTM AG Takes Over MV Agusta

Pierer Mobility, the parent company of Europe’s leading motorcycle manufacturers, including KTM, Husqvarna, and GASGAS, has announced an early takeover of MV Agusta, a high-end Italian motorcycle manufacturer. Pierer Mobility and its subsidiary, KTM  AG, acquired 50.1% stakes in MV Agusta Motor S.p.A. this year on March 22, 2024.

Initially, this takeover was scheduled for 2025; however, by utilizing the right accorded by the call option contract, Pierer Mobility has purchased the majority shares before the option’s expiration date. Consequently, KTM will take charge of the industrial unit, aiming to expand MV Agusta’s manufacturing capacity in Varese, Italy. 

A Quick Background

Photo Credit: MV Agusta 

In November 2022, Pierer Mobility AG’s subsidiary, KTM, purchased around 25.1% stakes in MV Agusta, based in Varese, to raise more capital for the company and give it an investment boost. Through this contract, in October 2023, KTM also assumed responsibility for the Italian motorcycle manufacturer’s supply chain and procurement operations. Within the framework of this contract, a part of MV Agusta’s motorcycle range was then distributed globally through Pierer Mobility’s international retail system and sales network. 

Photo Credit: MV Agusta

Additionally, based on the terms of the contract and call option, KTM could acquire another 25% stake in MV Agusta according to the yearly financial report for 2025; however, this has been changed to 2024. The purchase price of the 25% stakes, which was previously agreed upon by the parties, was calculated according to the EBITDA valuation method. According to KTM, this acquisition will help MV Agusta increase its production capacity to over 10,000 motorcycles after assuming responsibility for industrial and production management and expanding MV Agusta’s manufacturing facility in Varese. 

The New Leadership

The new leadership of MV Agusta, chairman and CEO Hubert Trunkenpolz, who is also a member of the board of Pierer Mobility AG, has taken charge of his office. Under Pierer Mobility AG, Dr. Luca Martin is MV Agusta’s new managing director and deputy CEO, while Filippo Bassoli has taken charge as the new chief marketing director of the Italian motorcycle manufacturing company. From the previous leadership, Pierer Mobility AG has retained Timur Sardarov, former CEO of MV Agusta, as the company’s new vice chairman. He has also been assigned the roles of brand ambassador and consultant. The remaining 49.9% stakes, authority, and ownership of the company will be retained by Saradov.

Positive about the bright future of MV Agusta, Sardarov highlighted that the successful conclusion of this five-year plan will imbue MV Agusta with new life and vitality. After stepping down as the CEO of MV Agusta, Sardarov declared his confidence in Pierer Mobility’s leadership, stating that under their guidance the company will thrive and achieve its financial goals after long-standing losses. 

“MV Agusta embodies the passion and a unique sense of romance that captivated me from day one. As I continue to serve as a dedicated vice-chairman, I am committed to supporting the company and its ongoing success.”

(Timur Saradov, Former CEO and new vice-chairman of MV Agusta)

This premature exercise of the call option to acquire major stakes in MV Agusta by KTM is bound to take the European motorcycle industry by storm. After the announcement of the new leadership and plans for MV Agusta, it is expected that the merger will prove to be highly profitable because both parties effortlessly complement each other. MV Agusta brings Italian flair for motorcycle engineering, design, and performance to the table. Despite its excellence, the company was suffering losses due to inexperienced leadership.

This lacuna has been filled by the adept management of KTM AG, known for its methodical and meticulous marketing strategy. Under Pierer Mobility, KTM AG has emerged as a well-managed brand that has never missed out on any financial opportunity for years. Currently, KTM AG under Pierer Mobility is considered a leading European motorcycle manufacturing company in terms of high production capacity, sales, and profits.

When it comes to GP championships, no other motorcycle company has managed to come close to MV Agusta in terms of racing prowess. This undefeated motorcycle brand has a legendary presence on the tracks. But despite its compelling magnetism and stunning production motorcycles, its influence over the global motorcycle market has been short-lived, leading to decades of losses. 

Reasons of Failure

Photo Credit: MV Agusta 

It seems mind-boggling that a motorcycle brand that has multiple racing championships to its name and has a strong engineering unit has failed to make sales for years. MV Agusta was founded by Count Domenic, an aviation industrialist with a passion for motorcycle racing. Domenic injected capital into MV Agusta’s racing department to give rise to a racing team that was undefeatable on the tracks. With Domenic’s investment focused on racing motorcycles, the production motorcycle wing was immensely neglected.

Additionally, the lack of a sound marketing strategy and sales management further exacerbated the financial situation of the company, hindering it from achieving the heights it was meant to. In terms of performance, the production models could not compete with MV Agusta’s racing models and were easily overshadowed. When Claudio Castiglioni took on the company’s revival, he too focused on bringing back the glory and heritage of the company’s racing years, neglecting the main cause of losses yet again: the lack of a sales management strategy. He believed that the brand’s return to the racing world would give the company the investment boost it needed. 

Photo Credit: MV Agusta 

Unfortunately, the company’s sales declined more rapidly after the production of the F4 750 model, designed by Maestro Massimo Tamburini. The bike had immense charm and allure; however, it also came with many mechanical flaws. Claudio has collaborated with Ferrari Engineering to glorify the return of MV Agusta superbikes. Unfortunately, this contract was very expensive for the company, yet the products of this contract were very cheap, leading to huge losses as sales plunged dramatically. 

New Hope for the Company

Photo Credit: MV Agusta

Finally, in 2022, Pierer Mobility acquired stakes in the company and appointed Dr. Martin, an accomplished mechanical engineer with over 16 years of experience with Ducati and BMW , as a member of the board. Under Martin’s guidance, the company identified the need to improve its production motorcycles in terms of engineering, design, and technology. It was also realized that through well-focused policies, the company could reach its full potential. 

Photo Credit: MV Agusta

By terminating dealer contracts in 2023, Martin took the risk of a decline in sales yet again, only to create an efficient dealer network that will follow the Pierer Mobility sales policies and business model. More energy has been focused on improving R&D and cutting-edge technologies, and for this, technology transfers from KTM to MV Agusta are expected. The new leadership is also working on improving the CRC research and development center in the San Marino Republic. Additionally, this center will house a distinct customer care department.

Martin has also confirmed that MV Agusta will rise to return to the top class of motorcycle racing. Through the support, guidance, and expertise, MV Agusta has already made a strong comeback, equipped with all the resources required to succeed in the ruthlessly competitive global motorcycle industry. 

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