The Official Stefan Pierer Husqvarna Business Strategy Thread...

Alright, all you FF's here in Thumpers seem to think you know how to handle Husky better than Pierer. Well, instead of cluttering up all the other threads, here is the place to bring the banter.

We think the Nuda is gone.

But the TR650 is the best dual-sport out there under $8k, so it has to stay, right?

But what about that BMW engine? He can't keep that, we've seen the contract! Oh wait, we haven't seen it!

Let's all get together and speculate!

I'll bite.
First off, kudos to Husky for breathing some excitement into the Rotax lump.
Bmw must be a little embarrassed,they had it 20yrs and missed it.
If SP can't make money by buying engines from BMW then he will surely
build his own and it will not be the 690 {too expensive}. To keep the price in line my bet is on a yet again larger KTM390 Duke engine of 600cc made by Bajaj in India.
A new engine means new frame so it will be all new.
Early reports on the 390 Duke are very positive, performs at the same level as the new cb500 twins. Honda 54hp and 430lb wet - 390 Duke 44hp and 330lb wet {yes 100lbs lighter} and its only 375cc
I predict 6spd 50-55hp at the wheel and 360-380lb wet and 9" suspension. Price $7000-$8000USD
The engine needs to be all day smooth at highway speeds because it will be compared to the TR650 which is the current standard.

Interesting theory. Thats is the first mention of the 390 that iI have heard. I could get excited about that. My only complaint about the TR is that it is 400lbs. It surely doesnt feel like it, but I would still like to see it 40lbs lighter.

The 390 engine could lead to a lighter bike at the same price point. I think keeping the price low is crucial to selling the Terra, so that could be a winning idea.

Sent from the voices in my head and transcribed by their drinking buddy...

I tried to look at Husqvarna on how I would take the company where it would be profitable and not compete with KTM as I have 51% interest in the company. First I would want my line of bike to be sellable worldwide, that is models that are priced equal to or less if possible then the Japanese models that they would compete with. I would want a line of bikes that are endure models and no street legal bike that I would call ROAD bikes. I would keep the TE models and the TR models for both types of riders, that is street/off road and dirt only models. Motocross models are out, there is no way Husky can compete with the big five, Honda, Suzuki, Yamaha, Kawasaki, and KTM. Now it comes down to the Strada and the Terra, both bikes have put Husky back on the map, but what we don't know is what is their deal with BMW and Rotax, I would think that BMW holds the say so here with Rotax, so what will BMW let Husky have in the future. I got the impression that BMW just wanted out and wash their hands of the whole thing, so where does that leave the Terra and Strada. I personally think it's a big factor if the 650 survives with the Rotax engine or not, redesign will cost a lot of money and the buying public may not want to pay for it. I would think that the company needs to down size their line of bikes, price their bikes inline with the other manufactures, hope the 650's can survive, and get a dealer network better then they have. We all know that sales is were it's at, sell bike that are sellable and dump the non-selling stuff, I would.

John

Building bikes in Europe is expensive business. Unions, strikes, taxes, and an unfavorable exchange rate make it difficult to be competitive. The European car manufacturers figured this out over a decade ago, and started setting up shop in the USA. Profit margins are slim enough on motorcycles that I think you would have to bypass the US altogether and go straight to Asia for production.

So presuming they did that, they could still stay competitive with the Japanese bikes as far as price goes. But could they maintain the quality?

Profit margins are slim on motorcycles? What is slim? Any facts to back this up?

Yeah, just look up any of the major manufacturers' profit margins. Most are public companies and publish these things. Bajaj normally rules the roost, and they top out at 20%

http://www.moneycontrol.com/news/business/bajaj-auto-leads-industry206-q4-profit-margin_705710.html

Harley normally does better, but they sell more merch than motorbike, which naturally leads to higher margins as a company.

From what I've read the road bikes are being ditched completely and one direction SP is looking at going is using a platform sharing system (like VAG cars do) across all 3 brands. While I think that could work, I don't think there would be enough difference between them all to justify any price differences but then again if one brands bikes just don't work then they won't sell at all.

Pierer has recognised it is a world market. BMW and KTM have partnered with companies like Loncin and Bajaj not only to get cheaper production, but use as a foot in the door for sales. Loncin has introduced a 650 bike based on the old Rotax engine. KTM has a couple small bikes and just intro'd the 390 in India. After the Husqvaran sale, BMW partnered with TVS, India's 4th largest bike manufacture. These emerging markets have great growth potential.

Compare that with what Pierer has said about Europe and the US. Husqvarna lost 34mil Euro's in 2012. He predicts a 14% reduction in sales for Europe in 2013/2014. The US has positive sales, but no where what they used to be.

He has stated his business plan many times. Basically it will be high end bikes for Europe and the US, involvement in racing for name recognition and more involvement in the emerging markets which is predominately Japanese.

He has stated his plan for Husqvarna. He has slammed the direction BMW took the company describing as too road orientated and wants to take it back to its roots.

It is not just sales that generate profits, it involves cutting cost too. One way doing that is using common parts over a range bikes and models. BMW based engines don't fit. You don't have the control necessary to keep costs down.

I think the profit margin on Terra's/Strada is very low. It is a much more modern and complex bike, assembled in in a country heavily unionized and yet it sells for $500 more than an old tech bike manufactured in Thailand.

Last year the emerging markets were down also, yet Bajaj sold 900,000 bikes and Loncin 2,000,000. Cheap bikes for the masses maybe, but a much greater future possibility.

I agree things cost more to build in Europe, but I thought we were on the World Market program these days. Maybe you have to adjust your production cost, may it be labor or county of production, but you either want to be in business or not. I personally don't want to pay more for products just to support other counties ways of doing business, life styles, whatever. Let's face it, Husqvarna is not the end all bike out there today, I just have to go down the street and I will fine another manufacture that is equal, or better at a lower price. I agree with itsatdm post, it pretty much says it all, modernize your bikes and production methods, or be gone.

John

Me too and if I were Stefan I'd throw some red/white plastic on a few KTM's and get even richer.

Husqvarna is dead.

Husqvarna is Dead, maybe true, don't discard the idea that Pierer bought the company to dissolve it, wouldn't that put KTM pretty much the only company out there with bike of that class. It's done everyday folks, but time will tell.
Why do you think the 650 Terra and Strada are discounted, they are using up their inventory of parts.

John

I absolutely think the TR650 is dead. That's why I bought one when I could.

However, I don't think Husky is dead. Stefan Pierer has publicly stated that he intends to follow in the footsteps of VW and their business model.

VW: Low end.
Audi: High end.
Common parts and engineering: PLENTIFUL


I think you'll see the same relationship with Husky and KTM, with KTM being the higher end line.

Was thinking about this after hearing something about Saab and spares, I heard that a manufacturer has to produce parts for 10 years once a model is changed/discontinued. Thinking this would be impossible for a defunct manufacturer (despite someone taking on Saab parts) I looked into it and they don't have to do anything at all! So a cheap Husky now might seem a good cheap prospect but there's going to be a lot of unique parts with questionable parts backup.

I think this would be a good move but I think it would harder to make the models unique (and you forgot Skoda > Seat > VW > Audi )

I guess my bet is right!

http://www.indiancarsbikes.in/motor...ual-purpose-enduro-motorcycle-in-india-70199/

Like slapping blue plastic on a KTM and calling it a Husaberg?

I sure hope KTM does the right thing by the brand.

I didn't forget them, he failed to mention them in his interviews. I loved my old Seat Leon. I only had it 6 months, but it was a fun and economical car.

Yup, he has a proven track record of closing a brand...I think he'll do the same with Husqvarna.


The future for people who don't ride KTM is Beta.

Since we are speculating... I predict a new TR690 using the pumpkin motor/tranny and lower spec suspension. It will be tuned more for grunt than top end power with a larger tank capacity than a KTM690. Top gear will be a true overdrive like the TR650. Pricing will creep up to around $8k.
The smaller thumpers will be KTM or Kymco or Bajaj powered with unique frames and priced less than the orange bikes.
Husky<KTM<Husaberg