Giovanni Castiglioni on the MV Agusta F3, Harley-Davidson and two secret new models

Dailies, Galleries -

By

We’ve been trying to make it happen since the deal was announced in August. This morning, it finally did. A frank and open discussion about the future of MV Agusta with its new 30-year-old CEO, Giovanni Castiglioni. This is the first English-language interview a Castiglioni has given since Harley paid the family to take MV back, just two years after  The Motor Company bought it from them. What’s he tell us? Well, that the three-cylinder, 675cc MV Agusta F3 should make 140bhp, for starters.

Giovanni with his dad, Claudio.

On getting MV back

“It was quite a difficult job, even more difficult than I think anyone knows, but after nine months of dealing, we managed to acquire the company from Harley and I think it’s great both for the company and for our personnel. And, I think, the image of an Italian brand, even though Harley did a very good job in those two years.”

“It is very exciting. My wife thinks that I am completely crazy to do something like this. Sometimes passion comes before rational thinking.”

“Unfortunately, over the two years with Harley-Davidson, the company got used to spending lots of money because there was a big company behind it supplying lot of money to the company every month. We have had to lay off a bit of personnel, we have reduced the costs of things that are not compulsory to the company. It is tough, not easy.”

On Harley-Davidson

“Harley-Davidson invested a lot of money in the company, over €60 million in capital. All the investment in the four-cylinder line, the F4 and the Brutale 990 and 1090, and last year they invested another €10 million on the three-cylinder platform that we will release next year.”

“The best thing they did in the company was the amount of cash they invested in new products. The negative thing is that Harley-Davidson is a multi-national company and it’s a very heavy company in terms of management which, for a small company like MV, isn’t a great combination.”

On expanding MV’s product line

“We are in supersport and hypersport  at the moment. We are also looking at other segments but we we need to do the best we can in our market, where our brand is recognized. I absolutely agree with you that the market for sportsbikes is shrinking, probably it will shrink more next year, but MV is recognized for being a sport brand. Don’t forget that we also have the Cagiva brand, which was great in the past for bikes like the Elefant and those kinds of bikes. I don’t think today is the right moment for MV to move into sport touring or proper touring bikes, not at the moment.”

On the MV Agusta brand

“Design, heritage, tradition and technology. We emphasize a lot on our logo. It’s one of the only brands that really has an important logo that reconnects to the past, to the airplane company, to the engineering company where MV started. In terms of product, MV is different from our competitors in its uniqueness, its exclusivity. I believe that whenever MV makes a product, we have to make always something faster and more powerful than anyone else. Because, when you buy an MV Agusta, you spend more, so you’re looking for more. That’s what we’re aiming for for the three-cylinder.”

On the F3

“The design of the bike, I have to say, It’s really unique, but it has a family feeling of an MV. The engine is really different from the competitors because it is full ride-by-wire; it’s completely new and has more performance. At the bench, we are now around 137bhp, so we think we can reach 140. This will be the first three-cylinder that is completely electronic, completely ride-by-wire and there are some specs in the engine, that our engineers will need to tell you about, that are different from the others.”

“The F3 will be the smallest bike that’s ever been produced in this category. It’s like a 125.”

“At the moment, we’re finishing our engineering and prototyping. The engine already did 70,000 miles without any problems. We have good results of reliability and good results of performance. Let’s say that we have done 90 percent and now have 10 percent to go. Production will start in October of next year.”

“The pricing is already decided. The price will be €11,500, which is in direct competition with the rivals [the 128bhp Triumph Daytona 675 retails for €11,590 in Italy]. There is a small premium because an MV is a rich bike, but with all the competition between €10,500 and €11,200, we’re not far above. It is a really competitive price for an MV.”

“For the American Market? To be competitive in the US we will have to sell the bike around $12,000 and that makes it difficult because, with the dollar still going down, it is very difficult for us to be profitable in the country. Almost impossible.”

On expanding production

“Harley wanted to invest in the company to make it a 40,000 units-a-year company, sort of Ducati-style. That’s not the plan now. Our vision is that we will increase our capacity and production within five years, with three new models, to a maximum of 10 to 12,000 units. I think that level is the maximum because with more, we start to dilute the brand like some of our competitors are doing.

We are doing now, 4,000 units. I think with the three-cylinder line, we can double the production to 8,000, going to 10,000. Nothing more.”

On Cagiva

“Harley-Davidson had the plan to re-launch Cagiva, then they stopped because of the economic distress there. Concerning right now? We will invest only in MV Agusta, the company needs to focus on only one objective at the moment.”

On racing

“If you go and look at the sales of the Yamaha R1, Valentino Rossi won a couple championships with Yamaha, but the sales of that bike did not increase. Ducati is racing and spending tens of millions per year on racing, but you see that to increase their volume they’re focussing on non-sport models.”

“I fully believe that racing is not linked to an increase in production of the existing models we have. I think that racing is really necessary and great for the health of the company in terms of being recognized by a larger group of people. Even my grandmother knows Ducati now, because of racing. But that’s the good part of racing, concerning sales? I don’t believe there is a connection.”

“For the amount of bikes that we want to do, I don’t think that we need to race. For two reasons: First, because it doesn’t increase sales. Second, because racing is expensive and MV needs to develop its product, not go racing. There is another reason. Racing in the Italian Superbike Championship, that we won, we saw that our engineers, they don’t care any more about the production, they just want to race. We need to focus on our product.”

On the EICMA motorcycle show

“We haven’t decided yet if we are going to EICMA or not. The main reason is that I don’t really believe that EICMA is so important for MV and, especially at the moment, I would like to concentrate on the economic efforts of the new company into the new products. So spending $1 million for five days? It is better to spend it on the product.”

“But, maybe we will just go with the F3. Just a big white cube, sort of trendy architectural stuff with just the F3 inside so that people see that MV is there, that we’re investing in new product and that the F3 is designed and ready to go. I think this is a good message to go to everyone, but without having a very big spend. We may go just to show our clients that the F3 is there and that they should wait another 10 months before buying something.”

On what he wished MV would have done differently, pre-Harley

“I wouldn’t do anything differently because the story of the company, it has been affected by different factors that are not connected to the MV Agusta brand or product. We suffered in a financial point of view, so the company was financially . . . weak. But, I think we did the best we could in that situation. So if you say, ‘If you think back, what would we change?’ No. I think we did the best for the company.”

“You’re my age. If you think back 10 years ago, you didn’t even know what MV Agusta was, so to build a brand that, in 10 years, that was forgotten by everybody, I think we did a good job. If the company would have been financially stronger, we would have been in a better position now.”

On future products

“We are investing now into a new product that will be launching March, 2011, which is a four-cylinder entry-level Brutale. Today we sell Brutale’s at €15,000 for the 990 and €18,500 for the big one, the 1090. We are entering the market with an €11,990 bike which is sort of a Ducati-style “Dark” version of the Brutale. That’s the first step we are taking into the new history of MV.”

“We are investing €10 million over the next 10 months to industrialize the new three-cylinder F3.”

“So that’s the first two products that we are doing, then we are also working on the Brutale 675, a small Brutale that will be priced below €9,000.”

On hiring Massimo Bordi, the engineer that designed the Desmoquattro cylinder head and engineered the Ducati 851 and 916

“He is like a military guy, that’s what MV needs now. He will be the manager of the R&D department.”

“He is a very good manager. In the last three years he managed Same Deutz-Fahr, which is a €3 billion company that makes tractors sort of like a small John Deere. He launched that company very well.”

“He did 22 years at Ducati. He did a very good job both in our time, when we used to own Ducati, and in the times when Ducati was under TPG.”

On where he goes from here

“Today we start from zero. The company has no debt, we are financially strong, we have a good amount of cash and we are investing in new product. I think that is a good start.”

  • Core

    Very interesting interview. Especially interesting was the fact he mentioned the dollar and its loss in value.

  • http://www.footshifted.com Footshifted

    Nice interview – sounds like the company is back in good hands

  • brandnreal

    The new MV Agusta F3 or the new Ducati EVO 848 ?…. I think Ducati has a new competition.

    • http://hellforleathermagazine.com Wes Siler

      It’s easy. Do you want an R1 that melted in the sun or the smallest, lightest 600-ish bike ever made, with a 140bhp triple from a brand that none of your friends will have? The answer’s obvious to me.

  • MikeD

    Im just glad to hear for once a STRAIGTH and CLEAR interview with “a YOUNG PERSON with some authority at some fat bike building company and not some WRINKLY OLD FART Executive or Suit that can barely speak his mind and does not have a clue about the times we live on and what the market wants(or thinks it wants,lol) and never gives u danm straigth answer about their plans”.

    He went so far as to said specifically what their future products were going to be, price targets, time frames, u mention it.
    Sounded like going a little after Triumphs and Ducatis Neck.

    I would like to see Cagiva being back in bussiness too with some form of Super10, MultiStrada, GS1200A Competitor…or w/e they choose to bring out first.

    I thougt the F3 was ready (as in Summer of next year on Showrooms ready) but seems it won’t be around until Winter 2k11.SIGH…

    I wish them the BEST of luck and can’t wait to see them grow and bring new options out there.

  • JimSmiffy

    Man I really want to see them succeed but I think their business plan is flawed. I think it’s difficult to be a boutique manufacturer these days. We forget that Ducati was seriously on the ropes several times over the last decade. It wasn’t until a new business plan came with the 1098. Remember that? The 1098 was cheaper and WAY better than the 999 it replaced, and they made a bunch and they sold a bunch, they diversified to other non-race bikes with a focus not seen before. Ducati is basking in the success that MV won’t find. Unfortunately I give MV 5 years before they run out of money and are sold again.

  • http://twowheelsplus.blogspot.com/ andehans

    Funny how both MV and Triumph have new CEO’s that are sons of the original investors and are both competing with similar sized 675 bikes. Will be interesting to follow..
    I think it sounds like Castiglioni has a sustainable plan and a strong focus. If they can make a healthy profit with the production volume and sales prize they’re predicting, then they’re onto something. A MV 675 at €11,500 sounds extremely tempting.

  • http://pics.zenerves.net/index.php?gallery=vehicules tropical ice cube

    Agree with andehans; if Mr C. doesn’t plan a Cagiva Mito, Planet and other Elephants, he risks a rude awakening. I can’t find another ‘niche’ manufacturer (of any product) with a real history of success with this strategy.
    But it’s actually a depressing picture.
    At current Paris Auto Show, Lotus just showcased they’re leaning that way too, going away from hand-crafted 1500lbs, 120hp supercars to 2 tonnes 350hp 4-doors… expensive mass-produced tinboxes.
    So indeed, it’s a pity, which drives me to say that we all should buy MV Agusta in order to support the sole remaining maniacs of the bike industry.
    But if they’re half good, they know that, and the interview we enjoyed today may not be revealing everything.
    Expansion sucks. Being, like i.e. Ferrari, part of a much larger group was probably a nicer, cleaner way to make it Boutique.
    How long would Brough Superior survive today?

  • http://bigassmessage.com/39b51 vic

    i am starting to like this guy for not being the sock-puppet that everyone said ,he seems to be the exact opposite to his father in regards to money although he underestimates the effect racing has in regards to brand recognition
    CC would have the biggest baddest stand at EICMA even though he was the smallest manufacturer.meanwhile wages went unpaid

    i disagree with him in regards to cagiva.it could be their ducati monster in regards to money instead they are diluting the mv brand with brutalina’s and the like(excluding the f3)
    imagine a new cagiva elephant .the sport touring market is very big right now(even ducati came up with one) and they are missing out on some big money.

    young people pushing the buttons are what is needed in the motorcycle world,just looks how that McQueen look-a-like did for triumph

  • http://www.facebook.com/#!/group.php?gid=144806219688 sam1078

    It seems the brand is in a good direction…at least they have a clear idea where to go.

    Nevertheless, they have have a lot to room for improvment (distribution, dealerships, post sales management….and competition….)

    As owner of a F41078 I love this bike but I feel very bad attend by the brand, there is no loyalty programs, customer focus activities, good merchandising line..etc.

    They have everything to beat other brands (design, technology, performance, sex appeal and heritage).

    Why the did nothing about?

    I hope this guy will.

  • http://www.urbanrider.co.uk UrbanRider

    Great work on getting the interview.

    I think the smaller capacity Brutale will be a hit in Europe. I never got the best out of my 750 Brutale here in London let alone the more recent large capacity models.

    They have clearly taken note of the popularity of the Street Triple. Practical but fun.

    I meet plenty of people who aren’t fans of the new Monster shape, so perhaps they can plug the gap as THE Italian middleweight street bike option.

    I still want more manufacturers to produce fun machines for where I do the majority of my riding, the city. 300-500cc that isn’t a supermoto (because they are so liable to theft).

  • Viceroy_Fizzlebottom

    “For the American Market? To be competitive in the US we will have to sell the bike around $12,000 and that makes it difficult because, with the dollar still going down, it is very difficult for us to be profitable in the country. Almost impossible.”

    I really hope they don’t change their mind about bringing the F3 to the states.

  • DougD

    His views on racing strike me as odd. Without its racing heritage, MV Agusta is largely forgettable, isn’t it? How could he not aspire to carry on that legacy?

    I think he’s trying to gloss over the fact the company has been mismanaged for so many years that it pissed its racing prowess down its leg. How many times does he mention Ducati in the interview? He clearly envies that brand.

  • http://www.postpixel.com.au mugget

    Phwooooaarrr!!

    140 horsies, eh?!!
    My K6 Gixxer has what – maybe 160? Maybe My next bike doesn’t have to be a litre bike…

    Sweet interview, nice work!

  • http://www.muthalovin.com the_doctor

    Excellent interview.

    Its reassuring that the new management is more concerned about survival of the company rather than racing and expanding. I think the F3 will be a success. I would seriously be looking at one if I was in the market.

  • http://www.thisblueheaven.com Mark D

    “…a small Brutale that will be priced below €9,000.” – Yes please.

  • slowtire

    “we managed to acquire the company from Harley and I think it’s great both for the company and for our personnel. And, I think, the image of an Italian brand, even though Harley did a very good job in those two years.”

    ““Harley-Davidson invested a lot of money in the company, over €60 million in capital. All the investment in the four-cylinder line, the F4 and the Brutale 990 and 1090, and last year they invested another €10 million on the three-cylinder platform that we will release next year.”

    “The best thing they did in the company was the amount of cash they invested in new products.

    Those bastards.

    • pauljones

      I couldn’t help but notice that as well.

      It may offer a good deal of insight into the death of Buell, as well as serving as an indicator of the fact that we can expect to see nothing really new out of Harley Davidson for a while as they spend the next couple of years eating that cost.

  • odiewan

    140hp in a 125 sized bike (maybe not literally)…Yeehaw!

  • ElDiablo

    I would let them sort out the bugs for a decade and then look at one. It took them almost that long to get the F4 sorted. The dealers that I have spoken with about MV have always complained about the reliability and technical support.

  • Darth Lefty

    “Racing in the Italian Superbike Championship, that we won, we saw that our engineers, they don’t care any more about the production, they just want to race. We need to focus on our product.”

    That’s fairly profound actually… you need a different mindset to make thousands of good things than to make four excellent ones.