Harley-Davidson and the Piaggio Group of motorcycle and scooter companies have announced massive loans to get back on their feet after the pandemic.
In June, Harley-Davidson announced it had access to a loan of up to $US350 million (about $A500 million) over the next year.
While it has not committed to the entire amount of the loan, it is committed to draw at least $US150m (about $A215m).
The company believes the loan is consistent with its intentions regarding liquidity.
Piaggio Group loans
Now the Italian Piaggio Group which produces Aprilia, Moto Guzzi and Vespa has secured a loan for €60 million (about $A97m, $US67m).
That’s 20% more than their annual net income.
The money will be put towards restarting after the COVID lockdown, as well as research and development.
Piaggio says they will focus their R&D efforts on reducing fuel consumption and emissions and increasing the number of new models.
Comment on loans
The world seems to be going into debt over the pandemic crisis and motorcycle companies are not immune.
It’s good news when they direct loans into R&D.
However, it’s a concern when businesses go into debt to help them survive a crisis.
In the wake of the COVID lockdown, many motorcycle companies are now reporting a huge bounce in sales in June.
In fact, the KTM Group, which includes Husqvarna and Gas Gas, has reports its biggest June in history.
KTM Group Australia/New Zealand MD Brad Hagi says there is “still a long way to go before this crisis is over”.
“This recent sales spike has not only seen existing and former riders return to riding, it has also seen new riders enter our sport, to experience the unique freedom it offers, and that is a real positive for the industry long term,” he says.
Australia is yet to announce official motorcycle sales figures for the second quarter, but they are expected to be flat or slightly up.
The Federal Chamber of Automotive Industries has reported that the dive in car sales has now slowed thanks to the easing of restrictions.
FCAI chief executive Tony Weber attributes the slight recovery to the easing of COVID-19 restrictions, end-of-financial-year sales and government incentives.
In fact, some dealers tell us buyers have been accessing their superannuation to buy their dream bike!
Similar incentives exist in other countries around the world which are reporting similar strong sales results.
Source: MotorbikeWriter.com