Monday, May 16, 2011

One Engine Maker to Rule them all!

If this is any indication of where the Powersports Industry is headed I keep seeing the real "behind the scenes" of the brands.

The real money is not in the brand itself, but in production.

The most important part of the vehicle is always the engine. The costs, the design, the technology. TGB of Taiwan might be a small name in the USA or globally in terms of units, but check your Piaggio or Vespa and you'll realize that 80% of the CVT systems are made by them.

Even the new BMW C1 has a Kymco designed engine and CVT by TGB both leaders in Taiwanese production. One of the ways Piaggio used to make money was to sell engines to Malaguti, Italjet, and other makers. Lately that tech is licensed or sold in China to other makers or JV partners like Zongshen ZMD. Honda has has a string of success in Asia from former JVs with (Daelim, SYM, Kymco) and by selling / licensing engine tech for years ( most of it is now copied in China for free, but that's another story ) Just reading the news today I saw that the new Husqvarna is buying from Kymco. This is a big deal since Huskys are one of the finest products in the world and most people consider them the best of the best.

Husqvarnas have been assembled in Varese, Italy, since the brand was bought by an Italian cycle maker, Cagiva, which then sold it to BMW Motorrad of Germany. Which has outsourced the engine production to Kymco in Taiwan.

One engine to rule them all, One engine maker to to find them, One engine to bring them all and in these outsourced times bind them. He who controls the engines controls the future just goes to show where the real money in the scooter industry is.

Engine manufacturing.

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