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.
This news seems to have been welcomed on the US stock exchange where the company is now a “buy” rating.
Analysts believe new CEO Jochen Zeitz can kickstart a turnaround after being successful at Puma.
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 global KTM Group, which includes Husqvarna and Gas Gas, has reported 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.
Australian motorcycle, scooter and ATV/UTV sales figures for the second quarter are up 2.45% on the same time last year to 52,838.
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.