Friday, July 8, 2011

Italian Motorcycle Industry Solution to Decline Allow China to Sell High End Motorcycles

So, I know everyone thinks the solution to their problems is selling in Asia. Vespa recently opened a high end showroom in Taiwan again, they are expanding production in Vietnam and it's true most of the growth is in the third world or Asia. The economy in Brazil is booming and their need for motorcycles has doubled, but this latest move by MV left me scratching my head.

Over at Dealer News I just saw an article with this quote:
“Distributing the MV models through a prestigious society like Lifan ensures that we will enter into this very important market with a very strong commercial partner at our side, respecting the Chinese culture, mentality and laws,” said Umberto Uccelli, commercial director of MV Agusta.

Here at MRP we happen to have a ton of Lifan product, parts made by Lifan for several different US importers that have now closed. Lifan scooters, motorcycles they are all based on someone elses design. In the end expanding into China is just setting yourself up to have to share tech and designs like it or now. I also don't think the roads in China are meant for an MV. If you ever drive outside of a main city there's really nowhere to ride a $30,000 motorcycle at any speed about 20 mph without possibly killing yourself. So most of these units will end up in someone's basement or apartment garage. Yes, there are more rich people in China, but is it sustainable for all the Italian firms on betting their futures on China to buy Ferrari and Ducati's. There is no guarantee that the rising middle class there will embrace luxury brands, there could very well be a backlash against the middle class as it rises it up - There's a great article on this in this months Economist magazine.

I just see the trend and instead of focusing on making better products, being more competitive, more companies end up like Benelli or now like Malaguti, giving away all the house secrets to China instead of becoming more competitive.

Don't be surprised if you see a Lifan motorcycle in a few months that looks a lot like an MV Augusta.

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