Friday March 12, 5:38 pm Eastern Time
INTERVIEW - Moto Guzzi tries to revive biker image
By Amy Collins
NEW YORK, March 12 (Reuters) - Italian luxury motorcycle maker Moto Guzzi Corp. (OTC BB:GUZIA - news) is mapping out a return to its heyday as the manufacturer of one of the world's most prestigious big touring bikes.
A week ago, the company finalized a partnership agreement with North Atlantic Acquisition Co. that provided it with $8.9 million in cash equity and $15 million in warrants.
With the new partnership and investment in technology, Moto Guzzi plans to take on the luxury-bike leaders, Harley-Davidson (NYSE:HDI - news) and BMW (quote from Yahoo! UK & Ireland: BMWG.F), by lowering its $11,000 average price for its new model, and targeting a younger, and possibly female, rider.
The company expects to see nearly 400 percent sales growth in four years, the company's top official said in an interview with Reuters on Thursday.
Moto Guzzi's current models are the California, Nevada Club, V10 Centauro and 1100 Sport Corsa. Two new bikes will roll out this year, the VII Sport, and another as-yet-unnamed bike dubbed the California ''naked sport bike.''
''The U.S. market is ripe. Harley has dominated the market for so long and they make a nice bike, but people want a change,'' said Moto Guzzi Executive Chairman Mark Hauser.
The motorcycle industry has seen 8 percent to 10 percent growth for the past seven years, and the biggest motorcycles, the heavy bike market, has seen growth of 18 percent to 23 percent during that time.
Heavyweight bikes make up a $5 billion annual market worldwide.
Founded after World War One by friends from an Italian Air Force unit, Moto Guzzi was a dominant luxury bike maker until the 1970s. It was the bike of choice by police officers around the world and dominated international racing events.
The company hit the skids more than 20 years ago when its parent company focused its energies on its sleek Maserati car line. U.S.-based Harley-Davidson Inc. and Germany's BMW AG have dominated the luxury market since then.
Moto Guzzi hopes the sheer prevalence of the competitors' bikes will be a selling point for its bike rich with Italian styling and heritage.
''Motorcycle riders tend to be individualists,'' Hauser said.
With so many Harleys and BMWs on the road, the high-end rider might be looking for something distinguishing.
Moto Guzzi makes 6,000 bikes a year and this year is planning for 7,000, which would let it break even on a net basis, Hauser said. Within four years, the company plans to make 20,000 to 25,000 bikes annually.
In its prime, the company's Italian plant had a capacity to build 50,000 bikes a year.
''We bought the company two years ago and we're looking to rebuild it,'' said Hauser, who is also the chief executive officer of New York-based Trident Rowan Group Inc. (Nasdaq:TRGI - news), which in addition to Moto Guzzi, makes metal furniture and steel tubing for vehicles.
Moto Guzzi had been a subsidiary of Trident, but on March 5, started trading under its own Bulletin Board symbol after North Atlantic Acquisition Corp. bought into the company. Moto Guzzi has applied to be traded on Nasdaq. On Friday, it closed 31 cents higher at $8.50 on the Bulletin Board, and has a 52-week high of 12-14 and 52-week low of 8.
Hauser, who admits he did not know much about motorcycles before he bought the company, said he now spends one week every month at the factory.
And does he ride? ''Now I do,'' he said.
The management and engineering teams were replaced at the company's sole manufacturing plant in Mandello del Lario, about an hour north of Milan. Between $6 million and $7 million was spent on new technology on the plant, with further costs required in about two years when production reaches 10,000 to 12,000 annually.
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