Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/689331
INTERVIEW MV AGUSTA PRESIDENT AND CEO GIOVANNI CASTIGLIONI: PART 2 P106 reality is that for MV Agusta to run well and follow its business plan, it needed another 50 mil- lion Euro in investment. I took their commitment at face value, which I'll admit was foolish of me, because I should have understood from the start that Mercedes would never address the situation positively. So I had to leverage another 15 million Euro from the banking system, which I did with my own personal guarantees—nothing to do with Mercedes. This was the maximum leverage I could obtain at that time. But meanwhile, what happened to the com- all wrong, the issue was with my receivables. I used to cash in at 60 days, but now I was cashing in at 200 days. Who from? From my dealers. So if I cash in at 200 days you grow 30 million in revenues, but you only cash it in six months on, so you must fund this sum in the meantime, that's what's happened. You come here all the time, so you've seen that in recent months MV has changed, and the new management that came in is not here anymore. We'd started to have disagree- ments because we didn't share same time I began to realize that actually we needed to refine our product, and make fewer bikes, not more. I finally understood that while MV Agusta can make any type of bike, in fact we sell only naked and sport models. We could make the best possible American-style Cruiser, but we'll only sell the Brutale or Dragster or F4. We are perceived as a luxury goods maker of high- performance, cool-looking, refined motorcycles which are literally unique, not even Triumph makes anything like our various three-cylinder models. You get a "IT'S BETTER TO BE ALONE IN A COMPANY THAN TO BE WITH A VERY RICH PARTNER WHO IS SO DISENGAGED FROM THE COMPANY'S DAY-TO-DAY OPERATION THAT IT WON'T INVEST IN IT TO HELP MAINTAIN STABILITY, AND HELP IT GROW FURTHER." pany? In 2015 it grew another 30 percent in turnover, so it went from 75 million to over 100 million Euro in sales in just one year, with 8500 bikes built and sold, and a waiting list for more. Revenues grew much more than units because our product mix changed, and we had a higher average value product. I had new management come in, a bunch of automotive guys with a push strategy for MV. According to them we must push sales to maximize profitability. But that's the same strategy. I was asking the ex-automotive guys, why are we pushing so much for volume that we are not cashing in? We were setting up a company to make 15,000 bikes, eventually even 20,000, and on the one hand I believed the strategy was correct, because we had invested so much in R&D, 80 million Euro all told, that with the product range we had we should make many more bikes in order to maximize the return from that investment. But at the lot for your money buying an MV Agusta. Sure, it's priced higher, but you can't buy anything like it with another badge on the tank. So I started to believe we should go back to our roots, go back to exclusively doing high performance premium bikes, and focus on our core models, because this is what sells the most. When was this? In September last year, when I cleared out the management guys. I said, I don't need any of