H-D discontinues Buell, to sell MV Agusta

In a major bombshell, Harley-Davidson has announced it will discontinue production of Buell, as well as immediately initiating proceedings to sell Italian brand MV Agusta, which it took control of just over a year ago.

The decisions by the company's board reflect a new long-term strategy which will focus on strengthening its core business – the Harley-Davidson brand.

To that end, Buell production will cease, resulting in the loss of about 100 salaried positions. Buell motorcycles, accessories and apparel will continue to be sold through authorised dealerships until stocks last. Warranty coverage will also continue as normal for Buell motorcycles, and there will be replacement parts and service through dealerships.

As for MV Agusta, which H-D courted and eventually bought in 2008 for around $140m, it's already had enough.

"Buell and MV Agusta are great companies, with proud brands, high-quality exciting products and passionate enthusiasm for the motorcycle business," said H-D chief executive officer Keith Wandell.

"Buell has introduced many innovative advancements in motorcycle design and technology over the years and MV Agusta is known in Europe for its premium, high-performance sport motorcycles.

"However, our strategy to focus on the Harley-Davidson brand reflects the fact that we believe our investments in that brand are a better utilisation of overall company resources," added Wandell.

So the message is emphatic: it's been a hoot, but the company will now extend the H-D brand, with global expansion a key plank of the new strategy.

"We are refocusing our business with the expectation that we can provide growth that is both profitable and sustainable over the long term," said Wandell.  "We believe we can create a bright long-term future for our stakeholders through a single-minded focus on the Harley-Davidson brand."

Worldwide retail sales of new Harley-Davidson motorcycles declined 21.3 percent in the third quarter compared to last year's third quarter, but still an improvement from the 30.1 percent decline in this year's second quarter. 

Net income for the company in the third quarter was $26.5m ($A28.7m), compared to $166.5m ($A180.8m) in the third quarter of 2008, on revenue of $1.12b ($A1.21b), compared to $1.42b ($A1.54b) in 2008.

Here's Erik Buell talking about the news: