Recently we informed you about the Mahindra’s plan to pick up stake in Kinetic Motors. Now the Mahindra’s arch rival and India’s largest business group Tata is rumoured to be in talks with Italian manufacturer MV Agusta (Meccanica Verghera). After the purchase of prestigious Jaguar and Land Rover, Tata may end up with yet another finest brand. MV Agusta is known for its high-end, high-performance superbikes which are some of the best in the world (‘Brutale’ and ‘Tamburini’). Internationally only two manufacturers have ruled both two and four wheeler market. Recently Volkswagen is said to be interested in buying Ducati. Some of the auto enthusiast feels that keeping two wheeler and four wheeler in the same basket will benefit the maker. Coming back to the Agusta – Tata story, similar to Harley’s agusta has large fanfare across Europe but the italian maker is struggling with a difficult debt situation that has slowed the arrival on the market for new models. The debt condition also hampered Agusta’s dezire for racing in the World Superbikes series. All Agusta needs is the healthy injection of cash, Tata’s can do that and keep the brand alive. It is important to see whether if the deal goes through whether Tata will buy the Agusta through Tata Motors or through a separate brand. It is important to recall MV Agusta announced its intention to sell bikes in India and said that it is currently looking out for an importer.
MV Agusta – Finance
Mv Agusta terminated the balance sheet at 31 March 2007 with a turnover of 141.3 million (including Husqvarna), but margins all in negative terrain: operational management in the red for 7.1 million and a net loss of 34.4 million. To reduce the level of net financial debt was agreed the sale of Husqvarna to BMW, but the sale did not solve the many problems. The 92 million paid by the house of Bavaria Monaco went to repay bank debts and part of those to the Taxes.
About MV Agusta:
Started in 1923 by Vincenzo Agusta and Domenico MV Agusta produced smaller displacement motorcycles til 1960’s. Later it started producing powerful motorcycles and when Domenico Agusta died in 1971 the sales of the MV Agusta motorcycles declind and the production was stopped in 1980. Later Cagiva (another Italian manufacturer) bought MV Agust restructured the business comprising Agusta, Cagiva and Husqvarna. In 2004, controlling stake (57.57%) of Agusta was bought by malayasian automaker Proton for 70 million euro. Proton’s acquistion had been questioned right from the beginning and MV Agusta’s debts and accumulated losses had significantly affected Proton’s finances. Hence Proton decided to sell the stake to GEVI SpA a financing company and sold it for just one euro. In July 2007 MV Agusta sold the Husqvarna motorcycle brand to BMW to concentrate all of the company’s resources in order to expand MV Agusta and Cagiva presence in the international markets.