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Tuesday 13 December 2022

PIERER Mobility

PIERER Mobility Takes 25.1% Ownership Stake in MV Agusta

Three months ago, PIERER Mobility (KTM, Husqvarna, GasGas etc.) announced a strategic partnership with Italy's Varese based MV Agusta to distribute the Italian manufacturer's motorcycles through its own dealer network in the United States.

MV Agusta has often struggled to be able to manage a viable dealer network in USA and, these days, with the Russian owned Italian marque (Timur Sardarov is CEO), to have a more stable production program stepping up its American availability made sense.

However, at the time of the announcement, there weren't many in the motorcycle industry in Europe whose immediate response to the news was that it was likely to be a first stage in a strategic alliance that would likely go deeper, and quickly.

Well, so it has proved. Very quickly. Stefan Pierer does very little without it being associated with a bigger picture, and in early November 2022 more of that picture started to emerge. This second stage strategic announcement has three elements to it.

First, KTM AG, the PIERER Mobility subsidiary that owns the KTM motorcycle manufacturing operation, will provide MV Agusta with supply chain support and take over purchasing. 

Second, MV Agusta will partly distribute its product range via PIERER Mobility’s worldwide distribution network. While the announcements from both MV and Pierer are not specific, this strongly suggests joint venture distribution of MV models by KTM way beyond just in the United States, if not yet fully integrating MV availability through the KTM distribution network.

Third, and most tellingly, effective November 2022, KTM AG (as opposed to Pierer AG) "will acquire a 25.1% stake in MV Agusta Motor S.p.A. by way of a capital increase." The structure of the deal suggests that MV Agusta CEO Timur Sardarov's primary driver in seeking to ally MV to KTM so closely is capital requirements and availability.

The extent to which that itself is driven by financial issues at MV, or by financing needed to fund Sardarov's ambitious plans for electrification of the MV range and other previously alluded to new model plans, will no doubt become clear in the months and years ahead - though don't expect a 25.1% stake to be the high watermark of Stefan Pierer's own ambitions for the strategic alignment. 

Although we here at AMD have no evidence to suggest this to be the case, it is pure speculation on our part, but one would have thought it likely that capital resources at Sardarov's family owned ComSar Invest/Black Ocean Group set-up must be under pressure as a result of sanctions. It was the Sardarovs' capital that rescued MV from its loveless marriage with Mercedes-AMG and MV who sold Husqvarna to BMW, who then 'flipped' it onto Stefan Pierer.

It is interesting that it has been Pierer who has stepped in, rather than Loncin in China, with whom MV has had a partnership agreement to produce models, including small displacement MV badged bikes, since 2019. In China, KTM is partnered with CFMoto. We'll see!

In other news, PIERER Mobility has announced that it is to distribute its Chinese partner CFMoto's motorcycles and scooters in select European markets from 1st January, 2023 - Austria, Germany, Switzerland and the UK.