MV Agusta, Mercedes-AMG alliance to end?
Italian motorcycle maker MV Agusta entered into a partnership with Mercedes-AMG in 2014 in order to infuse some financial stability into the company. However recently, the CEO of MV Agusta, Giovanni Castiglioni said that he is negotiating a buyback of shares from the brand. This means that this would be an end to the partnership of MV Agusta and Mercedes-AMG.
The company currently has a debt of 40-50 million Euros and so as to keep things afloat and running Giovanni has opted for this decision to end this contract. In 2014 Mercedes-AMG had acquired a 25% stake in MV Agusta but things haven’t worked out as planned, and the Varese based motorcycle maker if now finding it difficult to keep the company from sinking. MV Agusta had sold 9000 bikes in 2015 which was an overall increase of almost 30% but all this also hasn’t helped to earn profits for the company.
In the present scenario with a huge debt and dearth of funds, the company is willing to reduce its operations in several countries. Reports suggest that the company`s workforce will be reduced by 200 people, and they are also planning to reduce the overall production from 9,000 to just 6000 vehicles this year. MV Agusta sells its bikes in India through a partnership with the Kinetic Group. Whether these new developments will have any impact on MV Agusta`s Indian operations is yet to be seen.
(Source – NDTV Auto)