Varese factory shut, Husqvarna facing upheaval under KTM ownership

Reports from Europe say that just two months after Stefan  Pierer's Pierer Industries picked up Husqvarna from BMW Motorrad, it has shut the factory in Varese, near Milan, laid off the 211 workers and kept only the 30-odd people who run the sales and marketing functions on the rolls of the company. The big surprise is that just weeks ago Pierer Industries had confirmed that Husqvarna production is to continue.

But first, a bit of background. As you know, Husqvarna is a Swedish company famous for its off-road motorcycles that was brought to Varese in Italy when it was acquired in 1987 by Claudio Castigilioni brothers (think Cagiva and MV Agusta). But ever since the move, the hardy little off-road motorcycle brand has struggled.

Then, in 2007, BMW Motorrad purchased the company. The idea appeared to be sound. BMW has been trying to reach a wider audience with its motorcycles. That has led to more normal motorcycles. But still, the market perception was of a wider audience now interested in BMWs, but there were people still outside the fold, and it was not just the off-road enthusiasts. Husqvarna was expected to be remoulded into a brand that allowed the BMW Motorrad to access these parts of the market.

The obvious targets were the off-roaders but the Nuda 900 was a street motorcycle but far more informal, much more oriented towards a supermotard sort of fun angle. A kind of motorcycle that could not blossom under the BMW umbrella. And then came the Terra and Strada 650, smaller displacement reinforcement of Husqvarna's new push into street bikes, again based off BMW engines like the Nuda 900.

However, the current situations, the losses over the past three years and all say that the gambit has not really worked. The European reports, which spoke to the workers who have been laid off suggest that the problem was more serious than just products. It seems Husqvarna is not only sitting on more than a year's worth of ready to sell motorcycles, but there were other issues. Suppliers were moved from Italy to other places, notably Germany and Austria which, allege the reports, led to parts cost escalations that seem unnecessary in hindsight. To cut a long story short, it appears that the Husqvarna operation did not gain balance and focus from BMW's ownership.

Pierer's people, on the other hand, took stock of the situation and that has led, alarmingly quickly to the full stopping of production over the past few days. The sales and marketing activities, it appears, will continue.

More recent reports say production will be moved to KTM plants in Austria. This makes sense - KTM is a specialised maker of small volume motorcycles with flexible assembly lines which means integrating a new motorcycle into the production schedule should be a relatively smooth process if it were to happen.

What we think is going to happen is that Pierer Industries will rework the product mix. This is evident from Stefan Pierer's statement at the time of acquisition which spoke of how he thought that the brand had drifted from its origins and the solution to Husqvarna's issues lay in finding again the easy, rugged, cheerful nature of the original Swedish motorcycle that made the motorcycles famous.

The easy solution for KTM would be to quickly repurpose their current off-road platforms and reinvigorate the brand with fresh, new products. And we believe some models might end up adopting this practice.

There is also talk of Stefan Pierer considering using the Bajaj-KTM synergies to allow Husqvarna to enjoy fresh, smaller displacement platforms which lead to affordable, fun motorcycles, an approach that has already led KTM to being the largest European motorcycle manufacturer last year, beating out BMW Motorrad.

What we mean is for example, that there is an Enduro model that is to come from the Duke platform. This can be adapted to a new Husqvarna motorcycle. Some deft engineering is required to ensure the experience is different enough while costs are kept in check, but Bajaj are masters at managing the cost-experience balance in engineering terms.

The big question for us is how will these three brands work together in a market like India, for instance. Will Bajaj think ProBiking can host one more brand? Will the Husqvarna motorcycle be positioned above Bajaj and below KTM? That makes sense on the face of it but it is something that will have to be worked out.

It is early days but this much is clear, Stefan Pierer has plans for Husqvarna and in his typically energetic fashion, he isn't hanging about.

Here is our first ride and walkaround video of the Husqvarna Nuda 900R