BMW to Sell Husqvarna Brand Ending Off-Road Motorbike Effort

Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury vehicles, agreed to sell its struggling Husqvarna off-road motorcycle unit to focus its two- wheeler efforts on its namesake brand.

Pierer Industrie AG, the holding company of Austrian investor Stefan Pierer, which also owns a 51 percent stake of motorcycle maker KTM AG, signed an agreement to buy the brand for an undisclosed sum, the Munich-based manufacturer said today in a statement.

“Husqvarna didn’t fit to BMW’s long-term strategy,” Pierer said today in a telephone interview. He aims to end losses at the brand, which will remain independent, by 2014.

BMW, seeking to defend its lead in luxury-car sales from Volkswagen AG (VOW)’s Audi and Daimler AG’s Mercedes-Benz, is parting ways with Husqvarna after buying the brand in 2007 to appeal to younger riders. The manufacturer plans to scale back ambitions in the off-road motorcycle segment with the sale.

“In the context of changing motorcycle markets, demographic trends and increasing environmental demands, BMW Motorrad will expand its product offering to exploit future growth potential,” the company said in the statement. “The focus of the realignment will be on urban mobility and e- mobility.”

Pierer plans to retain Husqvarna’s focus on off-road bikes and will use KTM’s international marketing experience to facilitate expansion, he said.

Limited Synergies

KTM, originally an off-road brand, has successfully expanded its model lineup to street bikes over the past decade. The Mattighofen, Austria-based company’s motorbike sales rose 32 percent to 107,142 vehicles last year with strong growth in India, the home country of KTM’s partner Bajaj, which holds 47 percent of the manufacturer.

Husqvarna sold 10,751 motorcycles last year, an increase of 16 percent. Deliveries of BMW-brand motorbikes increased 2 percent in 2012 to 106,358 vehicles globally, marking a record for the 90-year-old marque.

“The synergies between BMW and Husqvarna motorcycles were probably limited,” said Frank Biller, an analyst with LBBW in Stuttgart. “The brands address two very distinct customer groups and completely different motorcycle segments.”

Husqvarna, which started making motorbikes in Sweden 110 years ago, was previously owned by Italy’s Cagiva MV Agusta group. The vehicles are now developed and produced in Cassinetta di Biandronno, Italy.

BMW started rolling out two scooter models in July to attract urban commuters. The company plans to introduce an electric scooter next year.

To contact the reporter on this story: Dorothee Tschampa in Frankfurt at dtschampa@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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