Stefan Pierer’s acquisition of Husqvarna continues to baffle me. You will note I say Pierer, and not KTM, bought Husqvarna, since the Austrian CEO used Pierer Industrie AG in the transaction as a means to help side-step European antitrust issues. After all, we can’t have Europe’s largest dirt bike manufacturer, nay largest total motorcycle manufacturer, gobbling up even more brands in the two-wheeled world. But, I digress.
For as big of an issue as it might be that KTM, by proxy, has swallowed another dirt bike brand, I still do not understand the thinking behind this madness. Dropping to four-digit yearly sales, it wasn’t until BMW started taking the off-road brand into the on-road market did signs of growth appear again at Husky.
Developing three road bikes (Husqvarna Nuda 900, Husqvarna Strada 650, & Husqvarna Terra 650), with three more concepts waiting in the wings (Husqvarna Moab, Husqvarna Baja, & Husqvarna E-G0), it is with even more confusion that we learn that Pierer & Co. intend to kill the Husqvarna Nuda project and its other street siblings.
The news is perhaps not that shocking to hear, after all the new Husqvarna street models used repurposed BMW engines, and KTM can understandably be resistant to relying on a rival manufacturer for the such a critical component. Though to be fair, they wouldn’t be the first motorcycle OEM to rely on another manufacturer for its engines, and certainly wouldn’t be the last.
The real issue though might rather have to do with the value of the Husqvarna brand and how it fits (or doesn’t fit) into KTM’s existing operations. Depending on whom you talk to, the “Plan A” school of thought is a quite popular opine, and would see Husqvarna acting as an excellent turn-key solution for KTM to add more sales to the Austrian company’s balance sheet, with Husky bikes selling alongside KTM machines, much in the same way Husaberg operates now (in its own awkward way).
There would certainly be cannibalization of sales between the brands, but since the customer dollars ultimately find their way into the same honey pot, KTM would be unfazed by this prospect and would certainly welcome the 10,000 or so extra units that Husky brings to the table.
The big challenge with Plan A though is the cost associated with running Husqvarna (something BMW knows all too well, to the tune of a reported €200 million), and its ultimate success resides in finding cross-brand efficiencies, i.e. consolidating operations.
If the numbers don’t crunch right, then Plan B is seen as a more likely outcome, and involves KTM buying Husqvarna, and shutting it down to remove competition from KTM and Husaberg. After all, the customer overlap in the high-end off-road market falls almost completely to these three brands alone, and a lost Husqvarna sale almost certainly means a KTM or Husaberg sale instead. The EU antitrust officials might wake up from such a move though, but you never know.
If those were the two options on the table, Husqvarna’s fate could very well reside with the accountants, who have so far signaled their intention to bring Husqvarna operations up to Mattighofen, and layoff almost all of the staff in Varese.
Although the Italians seem resistant to the change, there seems to be little to stop KTM from leaving only a small design and marketing squad behind in Varese, while production moves to Austria. That would leave a nice asset, read: factory, for KTM to sell, but that is a completely different rumor and animal to explore later.
Back on task, now that KTM is beginning to realize that things on the ground in Italy are far worse than what BMW Motorrad lead them to believe, one has to wonder if Pierer is rethinking his plans for Husqvarna. While the CEO has made every overture for a Plan A integration, it might be just as easy for KTM to abort Husqvarna and go with Plan B.
No matter which outcome works its way to the top, the Husqvarna brand seems destined for some work in developing markets, which loyal Husky enthusiasts will likely understand to mean complete dilution of the Husqvarna brand as we know it — Benelli owners know what I mean here.
However, KTM has shown itself to be astute at making premium motorbikes in countries like India, so much so that we are still hopping, wanting, wishing, praying for the Bajaj-built KTM 390 Duke to come to American soil.
The only option left undiscussed on the table? Plan C, which is could also be called “the last-ditch effort by BMW” plan. Building out Husqvarna into a stout off-round and on-road brand, KTM would have to make a major investment of time, resources, and money in Husqvarna as both of these major segments are in dire need of reworking.
With KTM AG already struggling with this same process in its core asset, the KTM brand, Plan C is an unlikely option, but still an appealing one for consumers. Who wouldn’t like to see the Husqvarna Moab come to reality? For the Nuda though, it’s so long, and thanks for all the fish. We hardly knew thee.
Photos of the Husqvarna Nuda 900 R:
Source: Cycle News & Cycle World
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