MV Agusta, What’s Next?

Rumor has it that MV Agusta might be drawn into the orbit of the mighty Polaris Group. And the rumor is gaining momentum on this side of the pond. After MV Agusta applied for Chapter 11 bankruptcy, not much leaked outside of the Varese factory. Suppliers with large exposures are holding their breath hoping for an acceptable settlement that will bring them some of the money they are owed, but legal procedures are taking time, and that weakens hope.

What worries them is the possibility that one of them might reject the settlement established by the Courts, and that would kill all possibilities of recovery. So the number of them hoping for the Polaris Group to throw them a safety raft keeps growing, and the rumor with it.

Now, the realistic question is, where did this rumor originate from? Are they from MV Agusta trying to refurbish its image? From media conjecture, based on the fact that Harley-Davidson was there before and that an American relationship sounds exciting. Rumors reiterated enough times gain consistency, but in this case I am very cautious.

Today’s MV Agusta could be a huge problem for potential buyers and might require massive investment to be pulled out of the doldrums. Harley's Matt Levatich went through that before. MV Agusta is deep in the red, losing money on every bike sold. This led to cuts in quality control, an old and always wrong solution to cut production costs—because the natural consequence is the growth of warranty costs. The basic package of the 675/800cc three-cylinder engine and related bikes are good, investing in quality control is a must and would produce very positive results, but it takes an adequate financial reserve for the rebirth. And also a very sharp product policy not to lose money on each bike sold.